SG Market (02 Jan 2014)

Market Roundup: US stocks powered to a fresh all-time highs on the last day of 2013 on more positive economic data with consumer confidence bouncing back from a lull and home prices continued to rise. The blue-chip Dow notched 52 new records during 2013 and closed out the year with a 26.5% gain, its best in more than 15 years, while the broader-based S&P 500 advanced 29.6%, its largest annual gain since 1997. The vast majority or 457 of the 500 S&P companies closed higher, reflecting the broad character of the bull run. There is confidence among market players that the rally will continue into 2014, though many are skeptical that the quantum of gains can be repeated. Key questions concern the pace of the US recovery, especially jobs growth and how the market will absorb the hit from the Fed’s stimulus cutbacks. Another big unknown is whether companies can maintain their growth after the record profits in 2013, mainly on cost-cutting. Having broken the 3,160 reistance mark, the STI is poised to march towards the next objective at 3,226 with underlying support now shifted to 3,160. Attention will be focused on HanKore’s transformational transaction, which will see the China-based wastewater treatment firm turned into a pure water unit of HK-listed and state-owned China Everbright Group, the largest environment play in China. Stocks to watch: *Sembcorp Marine: Secured repeat order to build third Pacific Class 400 jack-up rig worth US$211.5m from Perisai Petroleum, secheduled for delivery in 3Q16. This is its 8th rig contract in 2013, bringing the full year order wins to $3.6b. *GSH Corp: Co-investing RM510m (RM250m equity, RM260m in new cumulative redeemable preference shares) with Executive Chairman Sam Goi (RM190m CRPS) in a 77.5% stake in Sutera Harbour Resort and two residential land parcels totally 25.21 acres within the 384-acre Sutera Harbour property in Kota Kinabalu, Sabah, Malaysia. The resort comprises two five-star hotels – the 500-room Pacific Sutera and 456-room The Magellan Sutera, a 104-berth marina cum country club and award-winning 27-hole championship golf course. *Hong Leong Asia: China Yuchai (35% owned, NYSE-listed) updated that its 2013 engine sales is expected to exceed 500,000 units compared to 431,350 in 2012, surpassing the average growth of the engine industry in China. *Ramba Energy: SIC has granted an extension of the long-stop date of the 51% cash partial offer by PT Sugih Energy till 31 Mar 2014 to fulfill certain pre-conditions of the offer, including shareholder and regulatory approvals. *Abterra: Terminated the revised sale and purchase agreement pertaining to its proposed acquisition of a 54.42% stake in Zuoquan Xinrui Metallurgy Mine Co due to the unfulfilment of certain pre-conditons of the deal, including the non-delivery of a valuation report and expiry of a safety production permint of Xinrui’s iron ore mine. *Keppel Reit: Obtained an increase in commitment of a term loan facility to $180m and another term loan facility of $127m. In the event that Keppel Reit is required to prepay the outstanding loans, the aggregate level of facilities that may be affected is $3.4b as at 30 Dec 2013 *CapitaRetail China Trust: Has completed the acquisition of Grand Canyon Mall, Beijing, for a purchase consideration of Rmb1.8b. This is CRCT’s 10th mall in China and 5th mall in Beijing. Currently, popular brands within the mall include Carrefour, Poly Cinema, H&M, Gap, Sephora and Watsons. *Allied Tech: Surrendered its properties, including land, building and ancillary assets to Changqiao Township office in Suzhou, China in relation to a compulsory land acquisition for land development purposes. A balance of compensation of Rmb29.6m will be paid to Allied Tech by Changqiao Township Office, of which Rmb20m has already been received. The group has since relocated to its new premises in Huangdai Town in Suzhou.