SG Market (04 Sept 13)

SG Market: S’pore shares are likely to be side-lined after Wall Street pared early gaines amid renewed concerns that US is moving closer to a military strike against Syria. US stocks had opened higher on stronger than forecast growth in manufacturing and construction spending but cooled in the later session after top Reublicans voiced support for US action in Syria. Crude oil neared a two-year high and gold advanced, while 10-year Tresaury yields added 6 bps to 2.85%. Immediate resistance for STI remains at 3,065 with downside support at 2,990. Stocks to watch for: *Global Logistic Properties: GLP J-Reit (14.8% interest) is aquiring nine properties from GLP Japan Income Partners I and GLP. GLP Japan Income Partners I (33.3% owned by GLP) will sell seven properties with total GFA of 2m sf and 100% leased for ¥27.5b or sgd354m, while GLP will sell two properties with 1.4m sf GFA for ¥28.5bn. *Sound Global: Disclosed that controlling shareholder Wen Yibo has charged 50m SGL shares, representing 3.9% stake to Far Eastern Int’l Bank in connection with a financing arrangement and may charge a further 43m shares or 3.3% stake depending on the extent of his drawdown. Wen currently owns 56.2% of the water treatment company. *CH Offshore: Entered into two AHTS bareboat charters with a third party for a period of three years with option for the charterer to purchase the vessels upon expiry of the contracts. *Interra Resources: Acquiring PT Benakat Barat Petroleum (BBP) for US$78.5m, which would boost its reserves by 80%. BBP holds all the rights to explore and develop the Benakat Barat field in South Sumatra, which holds proven and probable (2P) reserves of 19.9m barrels vs group’s current reserves of 25m barrels. Purchase consideration will be 80% in cash and balance 20% via issue of new shares @ $0.4591 (8.9% of enlarged share base). *Acma: Buying 30% stake in Russian private engineering company, Avanguard 500, for US$3m via issue of 123.1m new shares @ 0.0311 each. Deal involves a guarantee of at least US$10m in total pretax profit to Acma for next three years. Avanguard's chairman Igor Alexandrovich Putin is the first cousin to Russian President Vladimir Putin. *Cordlife: Acquiring 19.9% stake in KLSE-listed cord blood banking service provider, Stemlife Bhd for RM29.6m via RM2.85m cash payment and issue of 8m new shares @ $1.30 (8.5% discount to last close). This is in line with group’s strategy to enlarge its geographical footprint in Asia and extend its product range to achieve economies of scale. *LionGold: Signs MOU with CBMI Construction, a unit Chinese state-owned engineering contractor Sinoma Group, to fast-track its gold minin projects. Company will appoint CBMI as its primary contractor for its gold projects worldwide and intends to produce 200,000 oz of gold annually by end 2014 through acquisitions and organic growth. *FDS Networks: Terminated proposed acquisition of Delta Advanced Materials. The group has since identified, and is now considering a new potential acquisition of a target company. However, due to confidentiality obligation, no further details can be provided. FDS is currently on the SGX Watchlist, and has to meet the requirements for removal from the Watchlist by 4 Sep 2013 or face delisting. The group has applied to SGX for a second extension of review date in respect of the proposed new acquisition. *SGX: Securities daily average value for Aug declined 4% y/y to $1.4b, despite Catalist turnover surging nearly 5-fold to $1.4b. Growth continued to be driven by derivatives trades with total futures and options volume up 32% to 8.6m contracts, boosted by China A50 Index futures (doubled to 1.8m contracts), Nifty Index futures (volume +34% to 1.6m contracts). Volume of OTC commodities cleared increased 29% to 49,667 contracts and iron ore swaps cleared jumped 53% to 45,610 contracts.