SG Market (21 Aug 13)

SG Market: S’pore shares could get scant relief from the broad but modest rebound on Wall Street after US retailers posted better-than-estimated earnings, 10-year Treasury yields retreated from the highest levels since 2011 and USD weakened. Traders will be looking for clues on how quickly the Fed will roll back its US$85b in monthly bond purchases when the last policy meeting minutes are released this Wed. More heads up may also come from the annual central bank conference at Jackson Hole later this week. Meantime, storm clouds are swirling over Asia as liquidity tightens and China’s slowdown, coupled with economic woes in India, Indonesia and Thailand are fuelling a sell-off in regional stocks, reversing a flow of money into the region. About US$8.4b have been withdrawn from emerging market ETFs this year, sending the rupee, rupiah and baht reeling. In contrast, investors poured US$156b into the developed markets, including US, Europe and Japan. With momentum indicators showing no signs of reversal, the STI is in for a choppy ride with topside resistance at 3,186 and downside risk at 3,100 Stocks to watch for: *Keppel Corp: Awarded a US$280m contract by Floatel Int’l to build its fifth accommodation semi-submersible for delivery in 4Q15. Group is currently building two more accommodation semis – Floatel Victory (costing US$260m) and Floatel Endurance (US$315m) for the same customer, which are scheduled to be delivered in 4Q13 and early 2015 respectively. With this order win, total value of contracts secured ytd year has surpassed $4m. *Sembcorp Marine: Signed MOU with Saudi Aramco and National Shipping Company of Saudi Arabia to undertake a feasibility study on the setting up of a world-class maritime yard in the oil-rich kingdom. The intended yard will provide engineering, construction and repair services for rigs, platforms, commercial vessels and offshore service vessels. Analysts expect strong demand for accommodation semi-submersible units as more exploration and production activity occurs in deep waters. *United Envirotech: Awarded a Rmb100m contract from the Yantai City local government for a 25-year build-operate-transfer municipal wastewater treatment plant in Shandong, China. The underground plant will have a capacity of 30,000 m3/day under Phase 1 (to be completed by 3Q14), reaching 80,000 m3/day upon completion of Phase 2. Under the terms of the BOT contract, the minimum off-take is 70% of the design capacity in the 1st year with a step-up to 100% by the 4th year. This adds to its 100,000 m3/day drinking water plant secured in Yantai last year. *Rowsley: Received consent by the Johor State Authority with respect to its land acquisition for its proposed Iskandar development. Group will hold EGM on 5 Sep to seek shareholder approval for 1) the proposed acquisition of RSP via issue of 1.25b consideration shares; 2) land acquisition of 92,310 sqm sites in JB, Malaysia for $358m via issue of 2.39b new shares at $0.15 each and 3) bonus issue of 2 free warrants with exercise price of $0.18 for every share held. *Ryobi Kiso: Issued a profit guidance to warn of a net loss for 4QFY13, which is mainly attributable to rising operating costs and start-up expenses. *Jason Parquet: Announced change of company name to Jason Holdings with the change in trading counter name on Catalist board to take effect on 22 Aug. *Broadway: Granted a three-week option to Ji Nan to purchase a property unit at The Central, Eu Tong Sen Street, for consideration of $2.6m.