SG Market (20 Sep 13)

SG Market: S’pore shares are likely to take a breather as US stocks retreated after rallying to record highs on the surprise Fed decision to keep its monetary stimulus intact. Bond prices fell with the yield on 10-year Treasury rose 6 bps to 2.75%, while oil dropped 1.6% to US$106.39 a barrel after Iran’s new president said his country is not seeking war with any other nation. Economic data on Thu today showed sales of existing homes unexpectedly rose in Aug to the highest level in more than 6 years as buyers rushed to lock in interest rates before they rise further. Factory activity in the US mid-Atlantic region expanded in Sep at the fastest pace since Mar 2011, a sign factories are picking up momentum, while the Conference Board’s index of leading economic indicators increased 0.7% in Aug and jobless claims rose 15,000 last week to 309,000, less than the estimate of 340,000. Having rallied almost 8% since the start of the month, the STI is appearing overstrectched with technical indicators in the overbought territory. As such, we do not rule out an imminent pullback for the market to consolidate its gains. Topside resistance for index is seen 3,275 (Jul high) with underlying support at 3,200. Stocks to watch for: *SIA: Plans to set up a full service carrier in India with Tata Sons, subject to regulatory approval from Foreign Investment Promotion Board. The initial investment is US$100m, with Tata owning 51% and SIA 49%. To be based in New Delhi, the new carrier will start with domestic flights in India. Details on its branding, management and service offering will be announced in due course. *Albedo: Finalised a RTO deal with a company owned by Malaysian tycoon, Tan Sri Dato Danny Tan and his family, which will see the group transformed into a major property developer in Iskandar. Albedo will buy Reflections Oasis, which is in the process of acquiring 7 parcels of land in Gelang Patah, Johor, totaling 662.7 acres for $774.1m via the issue of 34.55b new Albedo shares (~95% of enlarged share base) at 2.24¢ apiece and is negotiating for another 2 land parcels of 233 acres. Post-deal, Albedo intends to undertake a 17-into-1 share consolidation and sell off its core steel trading business to current CEO Tai Kok Chuan. *Hiap Seng: Awarded two contracts worth $57m to provide piping and installation works, and mechanical, equipment erection and structural works in S’pore. Both contracts will commence in Sep 13 and are scheduled for completion in Mar 15. *Hiap Tong: Proposed acquisition of an industrial property at 22 Soon Lee Road in Jurong for $18m. The property sits on a land area of 26,131 sqm with remaining tenure of 15 years. Meantime, it managed to extend the current tenure on a leasehold property at 180 Pandan Loop by another year to Jul 2014. *CNMC Goldmine: Commenced production at its second leach yard with a leaching capacity of 140,000 tonnes at the Sokor Gold Project. This brings CNMC’s total leaching capacity to 210,000 tonnes. The construction of a third leach yard and newly ordered gold de-absorption equipment, to be completed by 4Q13, will lift the group’s estimated annual leaching capacity to 1m tpa. *Sing Holdings: Potential buyers can begin registering their interest in its upcoming Waterwoods project at Punggol from 27 Sep – 6 Oct. Industry players expect firm demand for the project, which will be the second last EC project to be launched for sale this year, and no new ECs will be launched for the first 8 months of 2014. Sing Holdings has yet to price the units but based on recent transacted prices at EC projects around the area, the estimated the selling price could range between $780 and $880 psf. *China Environment: Entered JV with College of Engineering of Peking University (COE-PKU) to engage in R&D, industrialisation and commercialisation of technologies mainly in environmental protection and industrial waste gas. *China Minzhong: In a dealing disclosure, PT Indofood Sukses Makmur now owns 62.6% of the company.