SG Market (17 Jun 13)

The US market closed lower Friday, with the S&P 500 sliding 0.6% and ending down 1% for the week, after the International Monetary Fund cut its forecast for US economic growth in 2014 from 3% to 2.7%. It also warned that tapering of the Fed stimulus may be risky if not handled properly. Market participants are likely to assume a more cautious posturing early this week, ahead of the all-important FOMC meeting to be held over 18-20 Jun, in which Fed Chairman Ben Bernanke is expected to provide more clarity on the Fed’s commitment to interest rates. In Asia, the Nikkei is down 1% in early morning trade, indicating that regional equities including Singapore may extend last week’s decline. Singapore banks may lead the way down, after the Monetary Authority of Singapore censured 20 banks (including DBS, UOB and OCBC) for trying to manipulate Singapore benchmark interest rates, and ordered them to post reserves ranging from $100m to $1.2b for a year at zero interest. The STI will likely continue to see volatile intraday trading. Given the current macro concerns, any upside may be capped at 3,190 (the 200 day moving average). Watch for a break of the key 3,113 technical level, which could portend further downside ahead. Stocks to watch: * Yoma: Extends the long-stop date for the proposed acquisition relating to the Landmark development from 30 Jun 2013 to 31 Dec 2013. Separately, the group intends to obtain specific approval from shareholders, for the previously proposed rights issue in an EGM to be held in Jul 2013. * AusGroup: Secured a c.A$34.5m scaffolding contract with CB&I and Kentz Joint Venture on the Gorgon Project. This brings AusGroup’s order book to an estimated A$270m. * Overseas Education: Wholly-owned subsidiary Overseas Family School (OFSL) will purchase a plot of state land at Pasir Ris Drive 3 for $28m. The land has an area of c.49,865 sqm and has a term of 30 years. * C&G Environmental: Obtained formal approval from the Jinjiang municipal authority for a 40% increase in waste handling fee for its operating waste-to-energy (WTE) plant in Jinjiang, Fujian Province, wef 28 Jun 2013. This is expected to have a positive impact on C&G’s operating WTE revenue. * Advance SCT: Will engage its lawyers to recover various expenses incurred in connection with the bulk sale of goods and used equipment by one of its subsidiaries. The potential litigation may have an impact on FY13 EPS and NTA. The financial impact can only be determined upon completion of all due processes. * Teledata: Top shareholder Meritus Resources has been buying shares from the open market over the month of Jun. Its latest stakes stand at 18.3%, up from 12.0% at end May. The share price of the communications network specialist has been creeping up since May on rising volume. * Renewable Energy Group: Responding to SGX’s query, the Board and Sponsor believes the company can continue to operate as a going concern and retain its listing status. * First Ship Lease Trust: Has demanded redelivery of its two crude oil tankers, which lessees have defaulted on their lease payments.