SG Market (25 Jun 13)

SG Market: S’pore shares are expected to open lower, tracking overnight weakness in Wall Street and overseas bourses in the absence of positive leads. US stocks sank in heavy volume amid concerns over a stimulus cutback from the Fed and worries that a credit crunch would threaten China’s growth outlook. But the market pared earlier losses in late session after some Fed officials downplayed talk of an eventual end to the central bank’s bond purchases. Still the market volatility index or VIX jumped above 21 to its highest level this year, before easing back slightly. The STI may continue to face selling pressure in property and commodity stocks as bond yields spike up and commodity prices extended their slump. Investors also fret that a tightening of liquidity in China could further slow the global economy. The SGD has also weakened to a 12-month low of $1.28 against the greenback, signaling a capital flight out of Asia. The STI is pinned below its 200-day moving average, suggesting that a mid-term correction is well underway. Downside supports are found at 3,065, followed by 2,980 with overhead resistance at 3,195. Stocks to watch for: *China Fishery: Launched a new cash offer for Peruvian fishmeal company Copeinca at NOK68.17 per share, which is 14.1% above its previous revised bid of NOK59.70. Together with its existing 8.22% stake, a call option for another 8.97% from Vermar Azul and pre-acceptances representing 57.04% holdings, the group has gained effective control of 74.23% of the total outstanding shares of Copeinca, elevating China Fishery to become Peru’s largest fishmeal and fish oil producer. *Lian Beng: Secured a $115m contract from Tripartite Developers (JV between Hong Leong Holdings, City Dev and TID) to design and build a 396-unit condominium development, comprising nine residential blocks, a clubhouse, basement car park and other auxillary facilities at Flora Drive. The project is expected to commence in Jul and be completed in 28 months. Separately, the group has also clinched a $85m contract to construct a 12-storey office block. The two projects take total contracts secured year-to-date to $950m, boosting its order book to a record $1.4b. *Keong Hong: Won a $161.9m contract from MCL Land to build the 738-unit J Gateway condominium development, comprising two 38 and 20-storey tower blocks. Construction for the project will commence in Jun with completion in 39 months. The latest contract takes its order book to $690m, with projects stretching till 2016. *OKP: Awarded $15m contract from national water agency PUB to improve drainage in in residential areas such as Parbury Avenue, Sennett Avenue, Lucky Gardens and Upper East Coast Road. Works will commence this month and be completed in Jun 15. This addition brings its gross order book to $408.5m. *Oxley Holdings: Pushing its way into Malaysia after subsidiary Oxley Zest successfully tendered for a 99-year leasehold land in Johore for RM92.8m. The 186,000 sf site is zoned for commercial and hotel development, subject to approvals from relevant authorities. The acquisition will be funded by internal resources and bank borrowings. *Logistics Holdings: Acquired all the strata lots and the common property in Minton Court for $13.4m, marking the group’s foray in the property development business. Located at Paya Lebar Crescent, Minton Court is a freehold site with a land area of 13,271 sf, which the group plans to redevelop the property into a high-end cluster housing, comprising 6-8 units. The estimated cost of acquisition works out to be ~$1,010 psf of land area. *Amplefield: Entered into framework agreement with Sing Viet City to undertake joint venture projects in the 363.8-ha township development in Binh Chanh district in Ho Chi Minh City Vietnam. Both Amplefield and Regionaland, which owns 94.3% of Sing Viet City share similar major shareholder and directors. *Artivision Technologies: 40% owned Artimedia HK has sealed a deal with China consumer internet platform Xunlei to enable the latter to broadcast advertisements over its online video streaming website Xunlei Kankan using the group’s Advision platform. According to iResearch, Xunlei Kankan has 27.2m unique views per day with a 9.3% reach in China. *Serial System: Seeing renewed interest from long time investor Sam Goi Seng Hui, who bought 1.6m shares @ $0.128 on 21 Jun, raising his stake to 11.02% from 10.84%. Last week, the group agreed to subscribe for new shares in Jubilee at $0.1543 apiece, representing a 7.7% stake. Upon completion this will bring Serial’s shareholding in Jubilee to 13.6%.