SG Market (3 Jul 13)

SG Market: The S’pore market is likely to take a cautious stance after US stocks reversed early gains and ended lower on revived concerns about the eurozone and political crisis in Egypt. Investors were also wary of taking big positions ahead of the key nonfarm payrolls report due this Fri with US markets closing early on Wed and shutting down on Thu for Independence Day holiday. The market had traded higher till early afternoon on solid car sales and factory orders but moved into negative territory after protests in Cairo turned violent sending oil prices to a nine-month high on fears of supply disruptions. The broad-based S&P 500 met resistance at its 50-day moving average near 1,624, a technical level that the benchmark index has not been able to close above for the past two weeks. In Europe, a new round of worries emerged after Portugal’s finance minister resigned and France’s environment minister was sacked over disagreements with austerity budgets imposed by the IMF and EU. 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. With corporate news running dry, there are very few catalysts to drive stocks either way as investors wait for the upcoming US jobs data and start of the corporate earnings season next week. Rigbuilders and oil-related stocks may get a little boost from gains in crude oil prices. After breaching its 20-day moving average at 3,164 yesterday, the index is now headed towards the next major resistance at 3,200. Downside support remains at 3,090. Stocks to watch for: *Global Logistics Properties: Leasing over 23,000 sqm of space leading Chinese cosmetics e-commerce company, which will use 18,000 sqm in GLP Park Beijing as its national distribution centre for apparel, and 5,000 sqm in GLP Park Chengdu Hi-Tech for a regional distribution centre for central and south-western China. *AsiaMedic: Entered into a 25/75 JV with Cryoviva Int’l to set up a cord blood stem cell bank in Singapore, China, Indonesia, Malaysia and Myanmar with oprion to raise its stake to 49% within two years. The JV will leverage on Cryoviva’s track record of establishing such facilities in India and Thailand, technical know-how and US-based technology from Lifeforce Cyrobanks, ranked as a global top 10 cord blood bank in 2013. Cryoviva S’pore will finalise a location for its lab by end-2013, and will start operations in 2014. *Sinjia Land (formerly HLN Technologies): Entered into Letter of Intent to participate in the first phase of a mixed development project in Medini Iskandar Malaysia, estimated to have a gross development value of RM500m. The estimated gross development value of the entire project is ~RM2.5b. *ST Engineering: Subsidiary ST Aerospace has signed a long term agreement with UTC Aerospace Systems to provide maintenance, repair and overhaul services on the Boeing 787 Dreamliner nacelle systems for both the Rolls-Royce Trent 1000 and General Electric GEnx engines, for customers worldwide. *Intraco/Dynamic Colours: Intraco’s mandatory conditional cash offer of $0.185 per share for its listed associate Dynamic Colours has lapsed as it did not receive enough acceptances to meet the 50% ownership level and turn its offer unconditional. All acceptances will be returned. *Surface Mount Technology: Discloses that 6.3% of its shares are held in public hands, below the 10% free float requirement by SGX and cautions that 1) SGX may suspend trading of the shares, and 2) SGX may allow the company a period of three months or such longer period as SGX may agree, to meet its listing requirements. The company may be delisted if it fails to restore the free float to at least 10% after the period. Meantime, the counter will continue trading until further notice.