SG Market (15 Jul 13)

SG Market: S’pore shares are likely to open on a cautious note off even as Wall Street nudged higher last Fri on robust banking earnings as investors await key 2Q China GDP data due this morning. Market watchers are forecasting China’s economic growth to come in at 7.5% but a weaker-than-expected reading could raise hopes that the government would ease its tight credit policy. Having cleared the 200-day moving average at 3,200 (now turned support), the STI is approaching the next resistance level at 3,270 with momentum indicators crossing into overbought territory. With the REITs kicking off the 2Q corporate results season this week, focus will be on whether organic growth can be sustained. Penny stocks may also take centrestage with the unexplained collapse in Mirach Energy share price in the last 10 minutes of trading on Fri as well as Innopac calling off its Merlin Diamonds takeover deal. Stocks to watch for: *Kingsmen: Awarded contracts valued at $75.4m, of which $31m are for Formula 1 S’pore Grand Prix to fabricate and construct grandstand seats over three years, as well as interior fit-out works at Paddock Club and works at the corporate hospitality suites over five years. Another $44.4m are to design, fabricate and install show sets, props, lighting and audio-visual fittings for a US theme park operator in China, to be completed by end 2015. *Tiong Seng: Signs 30/55/15 joint venture with Myanmar’s Shwe Tang and Sin Mian Development to set up a 55,000 m3 precast plant in Yangon. The group will invest $10m for 30% stake High Tech Precast, which will 1st supply precast components to a potential public housing project. First phase of construction expected to begin in 4Q13, with production targeted for 2Q14. *Innopac: Announced that it had received 72.7% acceptances of its takeover of Merlin Diamonds and Merlin convertible notes remain unconverted at the close of the offer on 12 July. As the minimum offer conditions have not been satisfied and Merlin will remain listed on ASX, the group has decided not to proceed with the takeover and all accepted shares will be returned. Innopac no longer has any interest in Merlin. *Stamford Land: Acquired the freehold reversionary interest in 93-97 Macquarie Street, Sydney for A$16.9m. The group currently operates the Sir Stamford at Circular Quay hotel on the property under a long-term lease expiring 2089.