SG Market (13 Dec 13)

Market Roundup: US stocks finished lower for a third day in a row as investors took profit to lock in handsome gains from this year’s rally and improving economic data spurred speculation that the Fed will cut its monetary stimulus as early as next week. Data showed retail sales grew 0.7% in Nov for its biggest gain in five months although weekly jobless claims jumped 68,000 to 368,000 from almost a three-month low. The market has been digesting good economic news lately and a lot of it might be in anticipation of the FOMC meeting next week and whether policy makers are satisfied that the improving economy is robust enough for the Fed to start its tapering process. Many market participants had expected the central bank to scale back its bond buying in Mar next year but the timeline may have been shortened after Fri’s better-than-expected Nov payrolls report and Tue’s budget deal. The S’pore market is likely to open flat, in line with most regional bourses as traders take to the sidelines ahead of any key decisions coming out of the Fed on Dec 17-18. Immediate support lies at the 2,990 base, set in Aug, while upside resistance is around 3,100. Momentum indicators are deeply oversold but there are no clear reversal signals at this point. Stocks to watch: *KSH Holdings: Awarded a $42.5m contract by United World College South East Asia (UWCSEA) to construct an additional five-storey block and other ancillary works to the existing UWCSEA campus. Construction is expected to commence in Dec 13 with completion due within 20 months. This will take its existing construction order book to $430m. *Sheng Siong: Granted an option to purchase the commercial premises at Kallang Bahru for $13.5m. The group intends to operate the 779 sqm property, located within a two-storey shopping complex with remaining 60-year lease, as a supermarket once the existing tenancy expires in Oct 14. *Keppel Reit: Fully committed both office and retail space at Ocean Financial Centre, which brings all its five S’pore properties to 100% occupancy, up from 99.5% as at end Sep and higher than the average S’pore CBD occupancy of 93.5% for 3Q13. *JES: Commences steel cutting for its first two platform support vessels (PSV), due to be delivered in 4Q14 and 1Q15. This is the group’s maiden offshore project, which will kickstart its move to expand in the offshore and marine sector. *Changtian Plastic & Chemical: Commenced construction of its nylon-6 chip factory in Fujian, China with completion delayed by seven months to end 2014. As at 30 Nov, the group has incurred capex of Rmb20.6m for the acquisition of land premises and another Rmb18.2m for the purchase of machinery, which are funded by internal resources. *TTJ Holdings: 1QFY14 net profit soared 45% y/y to $4.6m despite a 26% slump in revenue to $32.1m arising from lower sales recorded in the structural steel business, which was partially offset by increase in the dormitory business. Gross margin expanded to 25.3% from 14.4% and coupled with a general decrease in expenses, helped lift the bottomline. Current order book of $126m is expected to be substantially completed between FY14 and FY15. *ITE Electric: Warns of wider losses and asset impairment for its FY13 results arising from trading losses and decline in the value of its financial assets.