S’pore Market (01 Aug 13)

S’pore shares may rise today, taking cue from slight gains in the US and Nikkei futures this morning, after the Fed pledged to maintain its US$85b in monthly bond purchases, noting that while economic growth is picking up, persistently low inflation may hamper the recovery. The FOMC statement however, continues to leave open the prospect for Fed tapering to take place once the economy improves sufficiently. Expect intraday volatility, with a slew of economic releases, namely PMI data, due from China and the EU countries later in the day. 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, any gains may be capped at the recent high of 3,278. Stocks to watch for: *DBS: Has walked away from US$6.5b deal to buy PT Bank Danamon Indonesia, after allowing the agreement to lapse. We do not think this is a surprise, given the numerous regulatory hurdles that DBS has faced along the way. Some market watchers expect the market to be relieved, given concerns about potential earnings dilution had the acquisition taken place. Separately, DBS reported 2Q13 net profit that rose 10% y/y to $887m, in line with street estimates. *ParkwayLife Reit: Reported 2Q13 DPU of 2.63¢, +6.1% y/y, aided by its Japan net income hedges. Net property income dipped 2.9% to $21.1m, due to the depreciation of the yen, but was partially offset by the full quarter contribution from the Malaysian properties acquired Aug ’12 and higher rent from Singapore properties. Gearing stands at 31.2%, with an effective all-in cost of debt of 1.52%. ParkwayLife trades at an annualized yield of 4.2%, 1.6x P/B. *Civmec: Has been awarded a number of new contracts, with combined value in excess of $100m. As at the end Jul ’13, the company’s order book stood at ~$190m. *Genting HongKong: Plans to divest up to a 5.6% stake in its Nasdaq-listed Norwegian Cruise Line for as much as US$352m. The maximum sale price is set at US$30.65 a share, which compares with the US$29.76 at the last close. Post sale, Genting HongKong will see its stake in NCL fall to 37.7% from 43.4%. *Hiap Hoe: Has acquired 88.3m shares (14.9%) in Ley Choon for $14.5m through a placement issue at $0.1642 per share. This represents a 11.2% discount from the Ley Choon’s last closing price of $0.185. Hiap Hoe intends to enlarge and diversify its revenue streams over the next few years, and seeks synergies in Ley Choon's underground utilities infrastructure and construction materials business. *Ley Choon: Bags an aggregate $63.9m of contracts from LTA for the maintenance of roads and expressways. The two contracts will span two years and commence Jul 13. This brings Ley Choon’s order book to $219.7m. *Europtronic: Plans to acquire a 100% stake in China's Gold Impact, a gold miner and explorer, for $160m in a reverse takeover deal. *Cacola: Proposed acquisition of Guizhou goldmine has lapsed as the company remains in ongoing discussion with Gold Tycoon Limited on the terms of the agreement. *Advance SCT: Entered into framework agreement with several individuals for the disposal of assets worth an aggregate $9.2m, with the intention to ease its tight cashflow situation to repay short term loans, as well as to focus on trading in higher value scrap metals. Net proceeds will be used to repay debts ($4.4m), general working capital ($3m), investment in wastewater treatment plant ($1.5m) and acquisition of remaining shares in NTY ($0.3m).