SG Market (02 Jul 13)

SG Market: S’pore shares are likely to remain in a pensive mood despite the advance on Wall Street as investors weighed positive economic reports from Japan, Europe and US against weak China manufacturing data. An early rally was bolstered by an ISM index that showed US manufacturing activity rebounded in Jun and construction spending neared a four-month high in May. But the key indices closed well off session highs as investors took profits. While fears of an early monetary exit by the Fed has somewhat eased for now, the adjustment process for an eventual transition to a normalized interest rate environment is expected to lad to more market volatility. This week brings a number of key economic readings including Fri’s all-important monthly jobs report for Jun. US markets will be closed on Thu for Independence Day. There is no clear direction for the S’pore market until the start of the corporate reporting season in mid-Jul and stock-picking will be key. Property and banks stocks could remain under pressure following last week’s MAS move to limit loan exposure. If the STI manages to break above 3,164 (20-day moving average), the next upside resistance is likely to be at 3,200. Underlying support is seen at 3,090. Stocks to watch for: *OKP: Awarded $6.7m contract by PUB to carry out improvement works to Stamford Canal (from Napier Road to Marina Reservoir). Works will commence this month with completion expected by Oct 2014. With the inclusion of this contract, the group’s order book now amounts to $415.2m. *Triyards: Secured first ship repair job on an offshore supply vessel for its newly commissioned 10,000 dwt floating dock, Lewek Hercules. *CapitaLand: Acquired BSG Holdings for $91.8m, which owns the Big Orange brand which has four self-storage facilities in S’pore. Along with its StorHub’s seven facilities, the group is now Spore's largest self storage company. *Sembcorp Industries: Investing NOK30m ($6.4m) for 28.8% stake in Biowater Technology, a Norwegian company that provides engineering and technological solutions for the treatment of municipal and industrial wastewater. SCI will collaborate with Biowater, to gain preferential and early access to its technologies, while Biowater will use SCI's global facilities to accelerate the development and commercialisation of its technologies. *Geo Energy: Granted an additional work block of ~149.5 ha as part of its coal mining cooperation area with PT Bumi Jaya Prima Etam (BJPE) , which is guaranteed to hold 1m tonnes of high thermal coal. The group has been given an exclusive right to purchase the coal produced at US$53 per tonne and will make an upfront payment of US$7.7m to BJPE for the latest concession. *CNA: Inks MOU with its Thai partner West East Int’l and Japan’s Tama Home to design and build homes for the Japanese community in Thailand. Project spans 3.7 ha site in Sriracha, south of Bangkok; first phase will comprise premier service apartments and residences with a saleable area of 20,000 sqm and entire project will be developed over four phases within 3-5 years. *China Jishan: Successfully acquired three plots of re-zoned land in Binhai Industrial Zone, Shaoxing City, Zhejiang province in China totaling 14.5 ha to relocate its existing production facilities and factory buildings. The total consideration of Rmb43.5m for the acquisition is less than the estimated Rmb50m approved by shareholders and funded by internal funds.