Thursday, December 26, 2013

SG Market (26 Dec 13)

Market Roundup: US stocks closed for Christmas at record highs backed by solid reports on durable goods orders and new home sales. Investors cheered data showing orders for durable goods surged 3.5% in Nov after a 0.7% drop the prior month, while purchases of new home topped forecasts despite declining 2.1% to 464,000 annual pace, following a revised 474,000 rate in Oct that was the highest since Jul 2008. The market was in celebratory mood as general economic conditions are showing a sustainable recovery pattern. The braod-based S&P 500 has climbed 28.5% this year, on course for its biggest annual rally since 1997 and sustained by the Fed’s loose monetary policy and better economic data. The market latest run-up came despite last week’s decision by the central bank to scale back stimulus because of the better-than-expected economy. With Hong Kong, Jakarta and Sydney all closed today for the festive season, the S’pore market is expected to grind higher, taking cue from Wall Strret and positive openings in North Asian markets in Tokyo (+0.9%) and Seoul (+0.3%). Short term momentum remains encouraging but upside may be limited in the absence of any real trading catalysts. Near term objective for the STI is seen at 3,160 with bottomside support at 3,100. Stocks to watch: *S’pore Medical Group: Proposed 1-for-2 renounceable non-underwritten rights issue @ $0.105 to raise up to $7.4m to cater for possible redemption of its 25.5m redeemable convertible preference shares, strengthen its balance sheet and enhance financial flexibility to capitalize on growth opportunities. *Rex Int’l: Updated that Masirah Oil, a 64%-owned subsidiary of its JV Lime Petroleum, has suspended its first exploration well, Masirah North North #1 in Block 50 Oman, for safethy reasons and data analysis indicated the presence of non-commercial hydrocarbons. A second exploration well has been identified in the Oman Block 50 project and drilling will commence in the next two weeks. *WE Holdings: Extended its MOU with Nay Win Tun relating to its proposed collaboration to undertake petroleum onshore projects in Myanmar by an additional three months till Mar 2014. *Singapore Post: Entered into an agreement to acquire Axis Plaza for RM34m ($13.1m) vs its latest valuation of RM37m. The property is located in the Temasya Industrial Park in Shah Alam, Selangor, Malaysia. *City Dev: 59% owned listed hotel arm Millennium & Copthorne is acquiring a luxury hotel, comprising 154 suites and four penthouses, located within the Chelsea Harbour mixed development in London for £65m. *Internet Technology Group: Granted approval-in-principle for its proposed delisting from SGX following the exit offer of $0.138/share by controlling shareholder Ossia Holdings.

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