SG Market (03 Dec 13)

US investors likely took a cautious approach ahead of Friday's jobs report while considering a mixed start to the holiday shopping season and an upbeat PMI figure. The US market fell last night, with most stocks tumbling in the final hour for a second day running, after trading sideways for most of the earlier session. Still, the S&P500 (-0.3%) and Dow (-0.5%) managed to keep just above the psychological 1,800 and 16,000 levels, respectively. The mild gains in the Nikkei (+0.3%) and slight dip in Kospi (-0.4%) this morning paint a mixed picture for the S’pore market today. Intensifying tensions in Thailand between protestors and the government may lead to further sentiment weakness for stocks like Thai Bev, with significant Thai consumer exposure. Travelers to Thailand are also starting to make alternative arrangements, just as the peak travel season has arrived, which may some impact on airline operators Tigerair, SIA, and hospitality providers like Banyan Tree. Minister Khaw Boon Wan’s comments that “the massive construction of HDB flats will start to taper off from next year as balance is restored between demand and supply” may also take the shine out of property and construction-related counters. From a technical perspective, the STI may continue to trade in a tight 3,158 – 3,235 range in the near term. Upside is capped by the 200-day moving average, as the Stochastics and RSI indicators flat line. Stocks to watch: *Yoma: Is part of a consortium comprising Digicel Group and First Myanmar Investment that has signed an agreement to develop, construct and lease telco towers in Myanmar to Ooredoo, one of two operators which recently clinched the coveted telco license to operate in Myanmar. The JV, called Digicel Asian Holdings (DAH) will be amongst the first telco tower companies to begin construction in Myanmar and through its multi-tenancy towers will help all telco operating companies achieve their aims of rapidly deploying telco coverage across the country. *Scorpio East: Agreed to acquire KOP Properties for $150m, to be satisfied via an issue of 714.3m shares at $0.21 apiece, that would result in an RTO. The long stop date to satisfy the deal conditions will be 31 Jan ‘14. Post acquisition, KOP Properties will hold 88.6% of Scorpio East’s enlarged share base, and will carry out a compliance share placement to investors, which include Han Seng Juan, Lian Beng director Ong Phang Hoo, Super Group Executive Director Te Kok Chiew, each taking up a 2.6% stake. KOP Properties is a Singapore-based real estate developer that also manages residential properties, and hotels and resorts in Singapore, Indonesia and in the UK. *Sembcorp Industries (SCI): Has commenced operations of its new $154m multi-utilities centre located in Jurong Island’s Banyan district to offer companies like Jurong Aromatics, LANXESS, Evonik Industries, Asahi-Kasei and Zeon, a comprehensive range of energy, water and on-site logistics. *SGX: Signed an MOU with China Futures Association to develop the derivatives markets in China and Singapore. *Hafary/ Sitra: Outdoor furniture distributor Sitra has received JTC approval to sell its Sungei Kadut property for $8.65m. The buyer is World Furnishing Hub, a special purpose vehicle jointly owned by tile supplier Hafary (40%), two of its substantial shareholders Low See Ching (25%) and Ching Chiat Kwong (25%) and Sitra (10%). Sitra stands to book a net disposal gain of $6.15m. *LionGold/ ISR Capital: LionGold, ISR Capital, Suzhou Power (an 80/20 JV between private enterprise Shanghai Power Capital Investment Management and reformed state-owned enterprise Jiangsu Eastern China Non-ferrous Metals Investment Holding) and IPR Fund, will team up to start a new natural resources and energy-focused private equity fund called IPR LP. Each partner will provide advisory services in relation to the Fund’s investment activities, and receive fees in the form of carried interest. *Golden Agri: Has incorporated a wholly-owned subsidiary, Golden Assets International Investment, to provide treasury management, and business and management consultancy services.