SG Market (19 Nov 13)

Morning Bites The Dow Jones Industrial Average climbed above 16,000 for the first time yesterday, but failed to hold on to that level at the close. The other two major US indices, the S&P500 and Nasdaq Composite are also trading near milestone levels of 1,800 and 4,000 respectively. While market watchers note the market “likes to stall around round numbers”, a positive bullish breakout cannot be ruled out given the recent strong momentum backed by the Fed’s continued backing of easy-money policy. Although China and Hong Kong stocks closed sharply higher yesterday, reacting to the China reform details out late Friday, the S’pore market however, remained on the sidelines yesterday, closing almost flat at 3,203 after losing its early gains. Our market could play some catch up today after the positive surprise in the Oct exports data, which may lead the government to adjust its 2013 GDP growth forecast upward. The STI continues to exhibit signs of a technical rebound with the index poised for a recovery after a two-month consolidation. As long as the index stays above 3,200, there remains a higher probability of an upward move toward the next resistance at 3,235 (200 day moving average). Underlying support lies at 3,180. Stocks to watch: *Civmec: Announced a series of contracts worth $65m in aggregate, comprising: a Nammuldi Below Water Table (NBWT) project for Rio Tinto, a civil contract for the construction of a state of the art air gas liquefaction plant for BOC, the supply of precast sleepers for the NBWT project for Crushing Services International; and the supply and erection of structural steel for the upgrade of concrete plants in the Perth region for Holcim (Australia). *Soilbuild Construction: Secured its maiden aerospace-related project from aerospace MRO operator, Vector Aerospace, to build a $13m facility at the Seletar Aerospace Hub, involving a part single-storey and part two-storey factory building with ancillary office. Work is expected to commence by Dec ‘13 and completed by 3Q14. This lifts the group’s orderbook to $435.0m, with a substantial portion to be completed in the next 12 to 24 months. *Q&M Dental: Entered into a MOU to acquire a 51% stake in a specialized dental materials manufacturer named Qinhuangdao Aidite High Technical Ceramic Co, for total consideration of RMB76.5m. This will crystallize the group’s plan to integrate and provide synergy across its range of dental operations from supplies manufacturing to supply distribution and dental clinics and centres. *ARA Asset Management: Has raised US$240m in capital commitments for a new fund platform named Morningside Investment Partners (MIP), within its private real estate funds division. MIP, which counts a US-based, public pension fund as an investing member, has a term of eight years, and will target income-producing properties in the office and retail sectors in S’pore, Hong Kong and M’sia. ARA’s assets under management (AUM) as at 30 Sep 2013 was $23.4b. *Hotel Grand Central: To sell its Hotel Grand Continental Penang for RM44m. The property contributed a loss of RM1.1m to FY12 pretax profit. Upon conclusion of this transaction, the group would make a loss of RM0.74m (0.12RM ¢ per share) over its book value of RM41.35m, net of tax and commissions. *Pacific Radiance: Updates that its 49% owned PT Logindo plans to issue up to 193.3m new shares before end 2013 through an IPO in Jakarta, which will be value accretive for the group. The funds will be used to expand and upgrade PT Logindo’s fleet, enabling it to seize a larger share of Indonesia’s high-growth and “protected” market. *Falcon Energy: May raise up to $35.5m via a proposed 1-for-10 bonus warrant issue with exercise price of $0.43 per share. The warrants, which have a two-year lifespan, will be exercisable after six months from the date of listing. *Superbowl / Hiap Hoe: Held the grand opening of their joint venture integrated development, Zhongshan Park yesterday. Management notes the high occupancies achieved at its two hotels, retail mall (over 90% leased) and office tower (fully leased). *CNMC: Commenced operation of its second gold de-absorption plant at the Sokor Gold Project, Kelantan, doubling the total processing capacity of the group. The plant achieved a record production output of 2,131oz of gold dore bars for a single pour. With greater economies of scale, the group expects to enjoy lower adjusted operating cost per oz of gold production. CNMC remains on track to achieve its estimated annual gold leaching capacity of 1m tonnes of ore with the completion of its third leach pad by year end.