SG Market (12 Mar 14)

US shares ended lower with the S&P500 shedding 0.5% to close at 1,868 on profit taking following record highs, and as investors remained on the side-line following Tuesday’s dearth of economic news. Volume was tepid, albeit higher than that of Monday, with Financials, Materials, Energy counters, and small Caps leading the decline. General Motors tumbled 5.2% after a congressional committee called the automaker for a hearing due to its slow recall of 1.6m cars on back of an ignition problem. Over in Europe, stock markets struggled for direction in a choppy session, with major banks declining after the ECB revealed details on how it will carry out its stress tests on the region’s biggest lenders. Regional markets are lower this morning, led by disappointing trade data from China over the weekend, concerns of a decline in India’s Industrial output and consumer price growth by Bloomberg surveys, and as Ukraine bolstered its defences after Russia exhibited no signs of yielding. The ASX is down 0.9%, Kospi down 0.6% and Nikkei down 1.7% as at 8.40 am. Taking cue regionally, the STI is expected to open lower with downside support tipped at 3,092 (50d simple moving average). Stocks to watch *Vard: Entered into a letter of intent with Solstad Offshore for the design and construction of a large Offshore Subsea Construction Vessel (OSCV). The contract will be the largest single vessel order in VARD’s history. Delivery of the vessel is scheduled for 2Q16. *Sembcorp Marine: Secured an agreement worth $25m with RCL Cruises, a member of the Royal Caribbean Cruises group, to perform the extensive revitalisation of Royal Caribbean International’s 137,276-gross tonnage, passenger-ship Voyager of the Seas. The contract is not expected to have any material impact on the consolidated net tangible assets and earnings per share of Sembcorp Marine for FY14. *JES: Secured contract worth an aggregate $120m to construct a 95,000DWT Post-Panamax bulk carrier, including options for three other similar vessels with the same design, from a repeat European customer. The scheduled delivery for the vessel is expected in Sep 2015. *Viking Offshore: Announced plans to invest US$5.4m to take a 30% stake in Quick Booms Investments, a special purpose vehicle controlled by Mr Chan which has a contract with a yard to build the CJ46-X100-D GustoMSC designed for use in water depth up to 375 feet. Mr Chan co-founded Labroy Marine, a then-SGX listed offshore and marine specialist which was sold to Dubai Drydocks World for $2.4b in 2008. *Tiger Airways: Traffic for Tigerair S’pore climbed 13.8% y/y in Feb’14, along with a 27.1% capacity expansion, dragging load factor down by 8.8ppt at 74.6%. Tigerair Mandala carried 158,000 (+53.4%) on an improved load factor of 7.8ppt to 78%, while Tigerair Philippines recorded load factor of 82.4% (+7.6ppt) from 107,000 passengers (+20.2%) *Stamford Tyres: 3QFY14 net profit tumbled 63% to $0.8m taking 9M13 net profit to $6.1m (+0.4%). Revenue inched down 3% to $71.5m, mainly due to weaker export sales of Sumo Firenza tyres and mining tyres. Bottom-line was weighed by other operating expenses which more than doubled to $3.5m, due to allowance for doubtful receivables and FX losses. *SGX: Subjected to approval, SGX will introduce Chinese RMB, Japanese yen, Thai baht futures contracts in 3Q14. In addition, SGX will also launch SGX FTSE China A50 Index options in the same period. *Creative: Launched 10 patent infringement lawsuits against electronics giants, Apple and Samsung, for their use of Creative's technology in the iPhone and Galaxy smartphones, as well as in both firms’ tablet ranges and laptops. *PSL Holdings / Nordi Group: Nordic group has completed the proposed acquisition of 30m shares in PSL Holdings, representing ~ 7.8% of PSL’s issued share capital.