SG Market (04 Jul 13)

SG Market: S’pore shares are likely to be weighed by a revival of European woes amid a slowing Chinese economy and lack of fresh leads from Wall Street. US stocks saw modest gains in a shortened session as improving private sector jobs data overshadowed political turmoil in Portugal and Egypt. Oil rallied above US$100 per barrel as declining US stockpiles and the ouster of the Egyptian President stoked concerns of supply disruptions. Meanwhile, Portugal yields surge on fears of a government collapse follwing a spate of cabinet resignations, while the IMF gave Greece three days to meet its bailout terms in order to receive the next tranche of aid. Greece, which has EUR2.2b of bonds to redeem next month, has missed a June deadline to put 12,500 state workers on a 12-month outprocessing scheme In the absence of any market moving news, the STI is expected to drift sideways with a downward bias with upside resistance pegged at 3,200 and underpinned by support at 3,090. Stocks to watch for: *Keppel Corp: Secured a US$210m rig order from PV Drilling Overseas for a KFELS B Class jack-up rig, scheduled for early delivery in 1Q15. This is the 9th rig contract won by the group in 2013, taking its total order wins so far this year to $3.4b. In a related news, Keppel has acquired a 35% stake in PVDO from Falcon Energy Group. *Midas: Subsidiary Jilin Midas Aluminium has won a Rmb44.3m contract from CNR Changchun to supply extrusion profiles for 44 train sets (264 train cars) for Changchun Metro Lines 1 and 2, with delivery expected from 2013 to 2015. *Parkway Life: Acquires two nursing homes in Japan for $23.1m. Providing a net property yield of 7.1% and average occupancy of 85%, the properties will be funded via a five-year JPY term loan at an effective cost of 1.55% per annum. The REIT is also retiring 65% of its loan facilities due in FY14 and refinancing them with a JPY9.43b five-year term loan. With 33 healthcare assets in Japan, PLife is well-positioned to tap into the growth of the elderly care market as the population in Japan rapidly ages. TEE Land: Associate Chewathai is acquiring a 10,893 sf freehold land in the middle class district of Bang Pho, Bangkok for Bt67m ($2.8m). The site can be developed into an eight-storey residential development and would be funded by its recent IPO proceeds and bank borrowings. *Sim Lian: Launching 184 units of its KL Trillion luxury serviced residences along Jalan Tun Razak at the heart of Kuala Lumpur city centre on 5 Jul. KL Trillion is a freehold integrated development comprising a 33-storey Grade A office block and two 39-storey blocks of 368 serviced apartments atop a five-level retail and office podium. Prices start at RM965 psf and completion is due end 2015. *SGX: Jun average daily traded value jumped 59% y/y to $1.6b, while 2Q trade value surged 42% y/y but down 3% q/q to $99.9b. Jun total futures and options trading volume rose 64% to 10.7m contracts or 557,000 contracts per day. *FJ Benjamin: Renewed franchise rights with Victoria Secrets for La Senza products in S’pore, Malaysia and Indonesia till 2023 with option for a further 10-year extension. Meanwhile, its house brand RAOUL has inked a five-year franchise deal with White Lotus Fashions in Sri Lanka, with option to renew for another three years. *SingHaiyi: US partner American Pacific International Capital (APIC) is in final negotiations to purchase an existing office building and a residential development site in US. In addition, the group has entered into a MOU with ChinaSF and APIC to participate in the financing, development, planning and design, marketing and management of the proposed San Francisco China Centre on a 100,000 site located at the Port of San Francisco. The pier project will have office, retail, exhibition and convention space. *Lafe Corp: Warns of a net loss for both 2Q13 and 1H13, citing the slow sales in its Emerald Hill project due to recent property cooling measures. *Superior Multi-Packaging: Discloses that following the cash offer Crown Speciality Packaging, the free float of the company has dropped to 9.5%, below the minimum 10% listing threshold. Crown had previously declared its intention to exercise its right of compulsory acquisition and delist the company. *KXD Digital: Granted a further extension of time till 31 Jul to submit resumption of trading proposal with regards to a proposed scheme of arrangement involving Astra Resources. The final extension is subject to several milestones imposed by SGX, including the appointment of a financial advisor by 31 Jul, that the financial advisor finds Astra suitable and meets the listing requirements on SGX by 31 Aug and submission of the resumption application by 30 Sep, failing which, the company has to commence delisting procedures immediately. *China Essence: Joint auditors BDP LLP and BDO have issued their report with a disclaimer of opinion for the company’s financial statements for FYMar13, highlighting that current conditions indicate the existence of a material uncertainty which may cast significant doubt on the group’s ability to continue as a going concern.