Singapore market (02 Aug 13)

Higher Nikkei and US futures may pave the way for gains in the Singapore market this morning. Fuelled by positive July manufacturing data from the US to China and Europe, as well as US jobless claims falling to a five-year low, US stocks jumped to new all-time highs, taking the S&P 500 past 1,700 for the first time. The benchmark index climbed 1.3% to close at 1,706.87. Expect much trading interest in the Singapore market today, after heavyweight companies such as UOB, OCBC, and SembMarine released their quarterly earnings. There could be some disappointment with OCBC, which missed estimates, contrasting with the higher quarterly profits reported by peers, DBS and UOB. Near term, the STI looks to be supported at around the 3,214 level, marked by the convergence of various key moving averages. On a rebound, the recent high of 3,278 offers a first target objective. Stocks to watch for: *UOB: Reported 2Q13 net profit of $783m, (+10% y/y, +8% q/q) ahead of consensus estimates by ~13%. Bottom-line was boosted by one-offs from associates, baring which results would have been largely in-line. Operationally, the bank posted steady loan growth, and strong fee income. *OCBC: 2Q13 net income missed estimates, down 8% y/y, 14% q/q to $597m, versus consensus of $640m. Management notes strong results in core business were offset by significantly reduced profit contribution from Great Eastern, due to unrealized mark-to-market losses as interest rates rose. *SembMarine: 2Q13 earnings of $125m (-12.7% y/y) came in below street estimates, mainly due to lower revenue recognition of existing projects, and fewer number of projects achieving initial recognition. 1H13 operating margin declined to 13.0% from 13.7% q/q, despite SMM having benefitted from a one-time gain on disposal. Otherwise, underlying operating margin would have been lower at ~11.8%. SMM has secured year to date orders worth ~$3.5b, with net orderbook at $14.4b. *Sembcorp Industries: Will invest $250m to build, own and operate a steam production facility on Jurong island, with capacity of 140 tonnes per hour of steam using industrial and commercial waste collected by Sembcorp’s solid waste management operations. The project will be funded with bank borrowings and internal sources, and is expected to be completed in early 2016. *Cosco: May continue its slump, after announcing another weak set of results, which was largely in-line with bearish estimates. Net profit of $12m (-56% y/y, +24% q/q), as the group faced lower turnover from its shipyard and dry bulk business segments. Separately, the group announced a US$170m contract to build a jack-up rig for a European customer and a Rmb590m contract to build two deep water platform supply vessels for a Chinese company. *Hi-P: Raked in a strong set of results which was largely in-line, as net profit came in at $10.9m versus a net loss of $2.1m y/y, while revenue at $285m (+13%). Strong top-line was largely on back of increased orders by existing customers, while gross margins improved to 10% versus 6% y/y due to a positive shift in product mix. Going forward, Hi-P expects to record higher revenue and profit FY13 versus FY12. *Keppel Corp: Secured a contract from Uruguay-based Parden, to build a jackup rig for US$206m. Scheduled for delivery in 4Q15, the jackup rig is intended for operations in offshore Mexico. This marks the 12th KFELS B Class jackup rigs ordered for the Mexican market since 2012. Keppel has achieved year to date order wins of ~$4.0b, on track to meet the street’s estimate of $5.5–6.5b for the full year. *CNA Group: Has teamed up with Chinese state-owned enterprise, SPACE-ONE (China) Aerospace Science and Technology Group, to form a 49/51 JVCo with start up capital of Rmb80m. The JVCo plans to tap into China’s growing Smart Connected City (SSC) business, in areas such as Sichuan, Chongqing, Guangzhou, Jiangsu, Tianjin, and Jilin. The JVCo will initially offer Internet Service Provider (ISP) and Utilities Data Centre (UDC) services, and eventually develop a full suite of integrated SCC services including Cloud Services, Smart Equipment and Sensor Network, and Integrated Operation Centre. The market in 2012 for ISP and UDC services in China was estimated to be RMB 1.1 t. *Asiatravel: Signed an agreement with Senscape Technologies to provide its travel content, booking engine and payment gateway to power Senscape’s travel mobile application, Senscape Tour. *VizBranz: Pluto Rising raises its offer price to $0.815 from $0.78. The Offeror has received acceptances of 63.6% thus far. The offer will close on 16 Aug. *MoneyMax: The Catalist-IPO invitation was 24.7 times subscribed. Trading debuts at 9am today.