Thursday, August 22, 2013

SG Market (22 Aug 13)

SG Market: Another down day for S’pore shares is on the cards as US bonds and commodities fell and US stocks whipsawed before ending near session lows after minutes from the latest FOMC meeting offered no clarity on when the Fed will scale back its monetrary easing. While policy makers were “broadly comfortable” with Chairman Bernanke’s plan to start reducing bond buying later this year if the economy improves, they also agreed that “a change in the purchase program was not yet appropriate”. This doublespeak left traders both confused and clueless and the uncertainty sparked volatility in the markets. The Dow dropped for the 6th straight day, the longest streak in more than a year, breaking below the psychological 15,000 level. 10-year Treasury yields jumped 6 bps to 2.89, a two-year high. The S&P index of 24 commodities dropped 0.5%, while the USD advanced 0.6%. The MSCI Emerging Markets Index tumbled 1.1%, extending its five-day slump to 4.8%. Both Nikkei and ASX opened weak, down 1.4%. Investors will now look for direction from the HSBC/Markit flash manufacturing index this morning for signs whether the Chinese economy is stabilizing. Manufacturing PMI indexes for the US and Europe are also due today along with US weekly jobless claims data. Immediate downside risk for the STI is at the 3,100 level. If that breaks, then the next support will be at 3,065. Upside resistance is capped at 3,186. Stocks to watch for: *Parkson Retail Asia: FY13 results were sub par with net profit of $37.9m (-17%) vs market estimate of $47.4m and revenue of $446.2m (+3%). 4Q earnings tumbled 62% to $3.4m, while revenue was flat at $102.9m amid tough trading environment, especially for its Malaysian operations, which registered same store sales growth of only 0.6% vs 1.1% for Vietnam and 8.5% for Indonesia. Bottom-line was also hit by lower gross margins in Malaysia due to increased promotions, losses at a Hanoi store and expenses incurred for e-commere start-up, acquisitions, brand building, opening of new markets and higher rentals. DPS shaved to 2.7¢ from 3¢ in FY12. *PEC: 4QFY13 net profit rose 13% to $4.9m, while revenue climbed 4% to $146.4m. This brought FY13 earnings to $12m (-1%) with record revenue of $544.8m (+12%) driven by both higher project works ($397.9m) and maintenance activites ($146.2m) particularly from S’pore. Lower gross margin of 16% (FY12: 19%) was offset by gains from the disposal of fabrication facilities and increase in sundry income. To mitigate against rising costs, group will be consolidating its operations and has recently acquired a large site in Benoi Lane to set up an integrated facility to achieve greater efficiency and control rising costs. Order book stood at $160.5m as at end Jun. Final DPS of 2.5¢ maintained. *Vard: Secured a NOK800m contract for the design and construction of an offshore subsea construction vessel (OSCV) for Farstad Shipping, scheduled for delivery in 3Q15. The latest order lifts Vard’s order book to ~NOK21b, underpinning revenue visibility over the next three years. *Sembcorp Industries: 60% JV Sembcorp Salalah Power & Water Company, which owns and operates the US$1b Salalah Independent Water and Power Plant (IWPP) under a 15-year agreement in Oman, will be launching its IPO on the Muscat Securities Market on 28 Aug. Sembcorp Salalah will be offering 33.4m existing shares, representing 35% of the issued share base at OMR1.59 ($5.17) each to raise $172.2m in proceeds. Post-listing, the group will retain a 40% stake in Sembcorp Salalah. The Salalah IWPP, which consists of a 445MW gas-fired power plant and a 39,000 m3/day desalination plant, has been in full commercial operation since May 12. *Blumont: Proposing to change its company name to Blumont Phoenix Corp to reflect the inclusion of mineral and energy resources as a core business activity. Since late 2012, the group has made several investments in the mineral and energy resource sector, spanning iron ore (Hudson Minerals), thermal and coking coal (11.5% interest in Celsius Coal), coking coal (12.75% stake in ASX-listed Coking Coal), gold (43.47% stake in ASX-listed Prospect Resources), uranium (Powerlite Ventures) and copper (10.7% stake in ASX-listed Kidman Resources). *Neo Group: Inked a 5-year licence agreement with Indonesian company PT Umi Sushi Indonesia to launch three umisushi food retail stores in Jakarta. The first of these outlets opened at the Kota Kasablanka Mall in Jul, while the other two stores will be rolled out withi the next two years. Neo Group will receive mthly licence fees based on salesThis is the group’s maiden overseas expansion since listing. It is also on track to expand its retail network from existing 19 to 30 by 2016 with plans to open five additional outlets from 3Q13 to 1Q14. *Tuan Sing: Received writ of summons by Kara Investments, a unit of Morgan Stanley and GSS III Rutgers BV, requesting that an independent 3rd party be nominated to conduct a joint sale of Grand Hotel Group (GHG), which owns Grand Hyatt Melbourne and Hyatt Regency Perth in Australia. Tuan Sing is a 50% JV partner in GHG but is of view that Morgan Stanley is not entitled to initiate the joint sale as conditions in the agreement allowing Morgan Stanley to commence the joint sale have not been met. *Pan Pacific Hotels: Reminder by parent UOL that its exit offer of $2.55 will close on 23 Aug and having acquired or acceptances for over 90% of the shares, it intends to exercise its right of compulsory acquisition for the remaining shares of Pan Pac after 21 Sep. *Roxy-Pacific: Proposed 1-for-4 bonus issue

No comments:

Post a Comment