SG Market (24 Jun 13)

SG Market: S’pore shares are likely to remain on edge following the modest rebound on Wall Street in a volatile trading, marked by quadruple-witching expiration of index/stock futures and options. US stocks has initially swooned over the mid-week remarks by Fed Chairman Ben Bernanke, suggesting that the central bank may wind down its monetary stimulus by mid 2014 but later recovered after a Wall Street Journal analysis said that the market may be misreading the Fed and that a reduction in bond purchases may not come as soon as some expect. In any case, yields on the 10-year Treasury note climbed 12 bps to break past the 2.5% mark for the first time in 22 months to 2.53%, a technically significant level, which may extend to 2.75%. The market is in a price discovery process to find a floor to adjust to the new reality of higher interest rates The STI may follow the 1.2% rise in the Nikkei in early trades after the index covered the opening gap down last Fri but expect the gains to be capped by stiff overhead resistance is at 3,195, as represented by the 200-day moving average. Downside risk is at last week’s low of 3,065. Stocks to watch for: *Cosco Corp: Secured contracts from a S’pore customer for the conversion of two semi-completed hulls to high-end floating accommodation units, valued at US$170m each. The units are scheduled for delivery in 24 months. *Guthrie GTS: United SM Holdings, jointly owned by substantial shareholders Putra Masagung and Anthony Salim, has made a voluntary unconditional cash offer of $0.88 per share with intention to delist and take the company private. The offer price represents a 21.4% premium above the last close and is the second takeover attempt by the same parties, who collectively control 69.2% of Guthries. Including shareholders who have undertaken to accept the offer, the figure rises to 70.64%. *Oxley Holdings: Subsidiary Oxley Star entered a joint venture agreement with Beverly Heights Sdn Bhd (BHP) to develop a 1.29m sf freehold site in Penang, Malaysia into a residential development. Oxley Star will be entitled to 70% of total sales of the project, while BHP will get 30% subject to a floor of RM500m and cap of RM900m. *Marco Polo Marine: 49.6% owned PT Pelayaran Nasional Buana Binan Raya (BBR IJ) acquired a mid-sized anchor handling tug supply vessel from a distressed yard for US$18m. The AHTS vessel will be chartered to a leading oil company for deployment in Indonesian waters. *Golden Agri: Indonesia has named eight companies, including PT Sinar Mas Agro Resources and Technology (SMART), parent of Golden Agri, as being responsible for the raging forest fires in Sumatra that have caused the choking haze in Singapore over the past week. A top forestry official was quoted as telling Reuters yesterday that the majority of the hotspots in the province of Riau are inside SMART concessions. Separately, Golden Agri has disclaimed knowledge of any hotspots on its concessions. *Straits Trading: Following the disposal of 5m shares in the open market by substantial shareholder Third Avenue Management (on behalf of numerous portfolios), the company’s free float now stands at 10.4% and has accordingly met the minimum 10% public float requirement to maintain its listing status. *Willas Array: Made an application to to dual list on the main board of the Stock Exchange of Hong Kong. The proposed HK listing is expected to give the group greater exposure to potential investors in China and HK. In addition, the dual listing in both Singapore and HK will enable the grouo to attract different investor profiles and have ready access to two different equity markets. *Pacific Healthcare: Proposed a renounceable non-underwritten 1-for-4 rights issue at $0.048 per rights share to raise $5.5m, which will be used to finance the group's expansion and general working capital. *China Fishery/Pacific Andes: Requests trading halt *Mirach Energy: Requests trading halt