SG Market (20 Aug 13)

SG Market: S’pore shares could face fresh bouts of weakness after US stocks lost ground for a fourth straight session as Treasury yields climb 6 bps to 2.88%, the highest level since 2011 ahead of an expected shift in Fed monetary policy. The broad-based S&P 500 closed below its 50-day moving average, a technical support level, which could point to further declines. Emerging markets in India, Indonesia and Thailand slumped amid a funds outflow on poor economic news and industrial metals slid. At home, the key STI has also penetrated beneath both its 50 and 200-day moving averages with deteriorating Stochastics and MACD momentum indicators suggesting further downside to next support at 3,160. Topside resistance is seen at 3,200. Stocks to watch for: *SGX: Plans to reduce the trading board lot size from 1,000 shares to 100 and eventually to one unit to align with global practices and improve market liquidity. The proposed move will increase the affordability of blue chips for many retail investors, who will be able to diversify their portfolios. Currently, about 40% of STI stocks are priced at $5 a share or higher. SGX aims to introduce the board lot size change by 1Q14. *Yoma: Updated that while the master lease issue for its Yangon downtown landmark project is still pending, preliminary development has commenced to ensure that there will be no delay to the completion of the project. Yoma will fund its share of 80% of the preliminary costs of up to $7m, which will subsequently be converted into a shareholders’ loan. Parent SPA and Chairman Serge Pun have undertaken to reimburse Yoma the pro rata development costs if the proposed acquisition is not completed by Dec 13. Management is sending a strong signal of confidence that the project will proceed and be completed on time. *Albedo: Signed an exclusive MOU with Temasya Cergas for a potential RTO, which would see Albedo buying five parcels of land totaling 762 acres in Iskandar, Malaysia, via the issue of new Albedo shares to Temasya. The land plots are located in Gelang Patah, near Setia Eco Gardens in Flagship B (Nusajaya) and are slated as an integrated business park and mixed use (commercial and residential) development. Both parties shall endeavor to reach a definitive agreement by 30 Aug 2013. *China Mining Int’l: Subject of a reverse takeover by China Geological Exploration (CGE), to transform it to a pure mining company. CGE has identified five brownfield and late stage mines to inject into the deal - a tantalum-niobium mine in Nigeria, tin-copper mine in Tajikistan and three iron ore mine in Australia and Xinjiang, China. CGE has access to a strong pipeline of global mining assets from its controlling shareholder, Henan’s Geo-exploration and Mineral Development Bureau, which holds ~200 licences to mining concessions in China and 96 licences in >20 other countries. *KrisEnergy: Agreed with its joint venture partner to go ahead with the Nong Yao oil development in the G11/48 contract area in the Gulf of Thailand. First oil is anticipated to flow in 1H15. The group acquired a 25% working interest in G11/48, which covers 6,791 sq km in the southern Pattani Basin and northern Malay Basin in 2009. *FJ Benjamin: Renewed its retail and distribution franchise for Guess and Guess accessory stores in S’pore, Malaysia and Indonesia till Dec 2019, with options for an additional five years. *Fischer Tech: Facing a writ of summons issued by a supplier for claims, including losses and damages arising from the alleged breach of contract relating to the supply of automation equipment. No mention of the amount being sued has been disclosed.