SG Market (20 Dec 13)

Market Roundup: US stocks paused a day after a record-setting surge spurred by the Fed’s modest cutback of its monetary stimulus amid mixed economic signals. Markets ended little changed as existing home sales fell for a third consecutive month in Nov to its lowest level since Dec ’12 and jobless claims unexpectedly climbed by 10,000 to a nine-month high of 379,000. Separately, the Philadelphia Fed index of factory activity edged up in Dec, while the Conference Board of leading economic indicators rose 0.8% last month. The greenback gained against other global currencies and the 10-year Treasury yield touched a three-month high of 2.92%. Gold fell 3.3% to a three-year low of US$1,193.60/oz, while crude oil was up 1% to US$98.77/barrel. Asian markets saw a mixed reaction to the Fed’s taper decision with Tokyo’s Nikkei (+1.7) and Sydney (+2.1%) both soaring but Hong Kong (-1.1%) and Shanghai (-1%) losing ground as most investors have already priced in the cut in bond purchases since May. The marginal STI move (+0.3%) was probably weighed by the 2% drop in SingTel, which went ex-dividend from its 6.8¢ payout. Expect the benchmark index to range trade between 3,100 and 2,990 till end of year with a slight upside bais given the market’s oversold situation. Stocks to watch: *Sembcorp Industries: Setting up a 80/20 JV with the local authorities to build, own and operate an industrial wastewater treatment (WWT) plant in the Caofeidian Chemical Park in Hebei, China. Targeted to begin operations in late 2015 with an initial capacity of 10,000 m3/ day, the WWT facility has secured a 30-year exclusive concession to service customers within the 32 sq km chemical industrial park. Total investment of the project is Rmb108.3m ($22.4m), of which Sembcorp’s equity share is Rmb35m. *euNetworks: Renewed multi-year contract with HUK-COBURG, Germany’s leading insurance provider, to provide hgh bandwidth Ethernet services to connect 47 branches across Germany with HUK’s HQ. The group owns and operates 13 fibre-based metropolitan networks across Europe connected with a high capacity backbone covering 38 cities across nine countries. *SBS Transit: Submitted an application to the Public Transport Council seeking bus and rail fare hikes, citing significant cost pressures despite efforts to lower costs and raise productivity, with any fare adjustments to be announced in 1Q14. *Mirach Energy: Spudded another new well (KM-604) at its Kampung Minyak oil field, the second of the batch of three new wells to be drilled this quarter. Completion of the drilling and logging analysis is expected to be out between end of Dec '13 and Jan '14. *OKH Global: Revised the intended use of proceeds from recent placement in Oct '13. 80% of the net proceeds of $39.5m, originally earmarked for potential acquisitions/investments, will now be used to fund its working capital requirements, of which a substantial $16.5m will be used for the repayment of advances to a director. The remaining $7m will be set aside for acquisitions. *Transcu: Issued a $1m 1.0% equity linked redeemable structured convertible notes due 2016, the first sub-tranche of its note programme. Concurrently, $0.2m worth of notes have been converted into 125m shares @ 0.16¢ each. *Hiap Hoe: Announced EGM schedule on 6 Jan 2014 to get approval from shareholders for its proposed acquisition of the entire share capital of Superbowl Holdings @ $0.75 apiece. *SP AusNet: Australian authorities have conditionally approved the foreign investment application by State Grid Corp of China to acquire a 19.9% stake in SP AusNet from S’pore Power Int’l.