SG Market (04 Dec 13)

The overnight weakness in the US markets and in Japan this morning paves the way for a poor showing for the S’pore market today. The S&P500 (-0.3%) and Dow (-0.6%) fell for a third day. The indices closed below their psychologically key 1,800 and 16,000 levels, respectively, on rekindled concerns that an improving economy may lead the Fed to reduce monetary stimulus. Eyes are on the US employment numbers due Friday, which could impact the Fed committee’s decisions when they next meet 17-18 Dec. Dec is traditionally a lull month for S’pore corporate newsflow, hence expect the local market to take cue from the macro sentiment changes. 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: *SGX: Nov operating stats. Value of securities fell 30% y/y to $19.5b. Derivatives volume however gained 23% y/y to 8.9m contracts. Open interest jumped 54% y/y to a record 4m contracts. A total of $4.1b notional of new OTC financial derivatives transactions were cleared, rising 52% y/y. *GLP: Leased 30,000 sqm of space at GLP Park Langfang, Northern China to Womai, the B2C e-commerce platform of COFCO, which will use the facility to establish a regional distribution center. In total, COFCO, China’s largest food processing, manufacturing and trading company, now has leases for GLP facilities across three cities in China. *Tiong Seng: Secured a $204.5m HDB contract involving 11 blocks of residential buildings, two blocks of multi-storey carpark, and community facilities, at Woodlands Crescent and Woodlands Rise. This brings the group's order book to $1.28b, with progressive delivery till FY16. *Genting HK: Has proposed to offer 11m NCL shares (plus up to 1.65m additional shares) at US$33.25 a piece, in a secondary public offering. GENHK expects to receive sales proceeds of between US$353.9m and US$406.9m, which will be used as general working capital and to fund new investments should suitable opportunities arise. GENHK anticipates to book a disposal gain of between US$222.4m and US$255.8m. *CDLH Trust: Has entered into an agreement to acquire Jumeirah Dhevanafushi in the Maldives for a total of US$61m, on par with its market valuation. The acquisition will be initially debt funded, and lift CDLH Trust’s gearing from 28.1% to 30.6%. The acquisition is anticipated to be accretive, with pro forma annualized net property income yield of 6.2% for 9M13, and result in DPS accretion of 2.2% with potential upside as the resort is currently still undergoing gestation. The property caters to the very top end of the Maldives resort sector and comprises 19 beachfront villas and 16 over-water villas; two additional beachfront villas are expected to be completed by the vendor in 2014. *Ezra: Shares jumped 9% yesterday. Responds to SGX’s query on its trading activity that it is currently evaluating and is engaged in discussions in relation to certain proposals, which it does from time to time, and there is no certainty that any transaction will arise from these discussions. *WE Holdings: Proposed to acquire Everbest Industrial Limited for US$7.4m, which will be funded entirely via a share issue of 287.6m shares @ US$0.0257 ($0.0318) apiece, a 6.5% discount to the last closing price. This translates to an acquisition multiple of 4.1x NTA and 5.6x FYMar15e P/E. The vendors have provided a profit guarantee of at least US$1m for each of the next three years from FYMar15-17. Everbest is a Hong Kong based company that distributes electronic components in China. *SBI Offshore: Pheim Asset Management has agreed to subscribe for 22m new shares, or 12.4% of the enlarged share base, at $0.125 a piece by way of private placement. *Dynamic Colours: Entered into an agreement to sell its entire stakes in Suzhou Huiye Chemical & Light Industry Co and Suzhou Huiye Plastic Industry Co to AEI Compounds for ~US$15m. The purchaser has an exclusivity period until the end of Dec ’13. *Amplefield / Transcu: Included on the SGX Watchlist wef 4 Dec 2013. The counters have two years to meet the requirements for removal from the Watchlist or face delisting.