SG Market (09 Jan 14)

Market Roundup: US stocks ended mostly mixed as the latest FOMC minutes and upbeat private sector jobs report strengthened the case for accelerating the pace of Fed tapering. But the reaction was muted as markets have shifted their focus from monetary cutbacks to the economy and earnings. Blue chips had a bad day, with Microsoft and Disney pulling the Dow 0.4% lower; the S&P finished fractionally higher, and the Nasdaq added 0.3%. The minutes of the Fed’s Dec 17 policy meeting showed that a majority of Fed officials saw waning benefits from the central bank's monthly bond purchases and most thought that the US economy could withstand further cuts in monetary stimulus. Separately, the private sector created 238,000 jobs in Dec, exceeding estimates. The market will get more clarity on the labour situation when the government releases its broader nonfarm payrolls data this Fri. While the penny stocks in S’pore took a breather yesterday, blue chips gained ground but we do not see the STI breaking out of its 3,100-3,160 trading range until the earnings season kicks off in earnest in two weeks’ time. Stocks to watch: *Global Logistic Properties: Will develop two large-scale logistics facilities in Greater Tokyo. To be completed in Dec ’15 and May ’16 respectively at a development cost of US$179m, GLP Sayama Hidaka I and II will provide 127,000 sqm of modern logistics space to the strategic submarket of Saitama. The projects are the 7th and 8th developments under the US$2.2b GLP Japan Development Venture, a 50/50 JV between GLP and the Canada Pension Plan Investment Board. *Blumont: Terminated its $48m proposed acquisition of Hudson Minerals Holdings, last announced in Dec 2012, without citing any reasons. *Armarda: Proposed private placement of 577m shares @ 1.145¢ (5% discount to last close) to seven individuals in S’pore, China and Hong Kong. Notably, one of the investors, Lam Cho Ying Terence Joe, was an ex-director of HK-listed Value Convergence and former President of Yuanta Securities in HK. Another individual Pek Seck Wei, is the general manager of Industrial Engineering Systems, a subsidiary of Annica Holdings. Net proceeds of $6.3m will be used to finance business opportunities including acquisitions (52%) and working capital (48%). *CCM: Made a series of corporate announcements relating to 1) profit warning of a significant loss in FY13, due to cost overruns of its construction projects, 2) resignation of three directors and revamp of board and senior management, 3) proposed acquisition of Singapore Construction to be led by new management team, 4) review of existing construction projects, and 5) iincorporation of a new subsidiary in Australia to explore property development opportunities in Western Australia as part of the group’s strategic diversification from construction to real estate development. *Loyz Energy/Rex International: Loyz will acquire the remaining 49% of Loyz Rex Drilling Services from JV partner Rex Int’l for US$4.5m via US$1m in cash and US$3.5m in new Loyz shares @ $0.3597 each. The target company is a provider of drilling and completion services for the oil and gas industry. Its drilling operations commenced May ’13. Based on 3Q13 numbers, net loss of Loyz Rex was US$1.5m and the NTA was –US$1.2m. *Devotion Energy: Exit offer @ $0.19 has been declared unconditional in all respects after obtaining shareholder approval at EGM. As at 7 Jan, the offeror and its concert parties control 66.71% of the total issued shares of the company. Closing date of the exit offer is 5.30pm on 22 Jan. *RH Energy: Subsidiary Langfang Ruihua Petrochemical (Ruihua) has entered an exchange of land rights arrangement with the Langfang Investment & Cooperation Bureau as a result of rezoning the current 24,400 sqm site into non-industrial use by the local authority. The bureau will compensate Ruihua the land use rights for a 28,875 sqm piece of land in Langfang plus cash of Rmb34.8m, mainly for rebuilding a new manufacturing facility, and Rmb5.3m for estimated loss during the relocation process. *NOL: Realigned its current geographically-organized structure to a functional one, to improve the speed of decision-making, market responsiveness and cost management. The functions will be in the areas of Trade, Commercial, Operations, Procurement and Planning & Strategy.