SG Market (05 Feb 14)

Market Roundup: US stocks rebounded in active trading from its worst Feb start since 1933 on bargain hunting and some encouraging corporate results. The broad-based S&P 500 recovered 0.8% after diving 2.3% on Mon, while the blue-chip Dow clawed back 0.5% coming off a 326-point slide. Investors shrugged off the steep 4.2% plunge in Tokyo and saw relief in a smaller-than-expected 1.5% drop in factory orders in Dec, which rose for a third straight month when the volatile transportation sector was excluded. Sterling results from luxury goods maker Michael Kors (+17.3%) and restaurant chain Yum Brands (+8.9%) gave occasion for investors to buy after the recent market rout. The economic calendar will get busier with the ISM services index and ADP jobs data due on Wed coming ahead of the closely watched nonfarm payrolls report this Fri. In other news, Fed Bank of Richmond President Jeffrey Lacker commented that the decline in global equities is unlikely to deter the Fed from trimming its monthly bond purchases. S’pore market may see a slight bounce in today’s session after coorecting less than Tokyo and Hong Kong yesterday and may track early gains on the Nikkei (+1.5%) this morning. However, upside is likely to be capped by resistance at 2,990 with support remaining at the 2,920 level. Stocks to watch: *Yongnam: The Yongnam/Changi Airport Planners & Engineers/JGC Corp consortium has been invited by Myanmar Department of Civil Aviation to enter into negotiation on the design, construction, operation and maintenance of Hanthawaddy Int’l Airport. The tender for the 30-year airport concession had earlier been won by Incheon Int’l Airport Corp with the Yongnam consortium named as back-up but the Koreans apparently failed to put a down-payment for the project. *Lian Beng: Secured a $117m contract to construct a multi-storey building within 32 months starting Feb. The contract will bring its order book to $1.17b as at 4 Feb. *Wee Hur: Secured a $103.6m HDB building works project for four blocks of flats at Sengkang Neighobood 4, comprising 727 units and a multi-storey car park. The contract will strengthen its order book to $358.5m. This project will commence in Feb ’14 and expected to be completed by 2017. *Logistics Holdings: Awarded a $31.7m HDB upgrading contract for the design and build electrical substations and switch rooms for 26 blocks of flats in Potong Pasir, Bishan and Serangoon. The project will take its order book to $245.9m. Work has commenced in late Jan and will be completed in phases by Jul ’15. *Tritech: Awarded an $8.3m LTA contract for the instrumentation and monitoring of the Thomson Line between the Stevens and Napier stations. Work has commenced this month with completion expected in Dec 2020. *Europtronic/WE Holdings: Europtronic has terminated the proposed $6.8m sale of Europtronic S’pore Pte Ltd (ESPL) to WE Holdings (WEH), citing uncertainty over whether the terms of its S&P agreement can be met. Meanwhile ESPL has entered into a service agreement to supply ccomponents to WEH and its customers in S’pore and Thailand. *WE Holdings: Entered into a non-exclusive distributor agreement with Samsung Electro-Mechanics (Singapore) to purchase and distribute high-tech components of electronics and mechanical products for electrical devices in the SE Asia region. Samsung will also assign a few key customers to the group. *SunMoon: Acquiring Nevada-based True Drinks, which sells kids beverages via a distribution network of 22,000 stores in the USA, for US$0.3m. Group intends to explore areas of collaboration with True Drinks, for the latter’s AquaBall vitamin-enhanced water product, as well as to launch its own processed fruit products into the US market.