SG Market (17 Mar 14)

US stocks ended modestly lower with the S&P500 dipping 0.3% to close at 1,841, as tensions of an impending collision by the US and Europe with Russia rose, ahead of Crimea’s vote to split from Ukraine on Sunday. Negotiations between US secretary of State John Kerry and Russian Foreign Minister Sergei Lavrow ended in a stalemate, sparking concerns of sanctions against Russia and an economic war between Russia and the West. Technology and Industrial stocks led declines, as recent negative data points from China continued to weigh on sentiment, while Financials were also amongst the biggest losers after a lawsuit over Libor rate manipulation was filed on 15 major banks by the Federal Deposit Insurance Corporation. Regional markets are slightly down this morning after preliminary results showed that more than 95% of voters in Crimea have chosen for the state to leave Ukraine and become part of Russia, in what is deemed by the US and European Union as an illegal referendum. As at 8.20am, Nikkei (-0.2%), ASX (-0.1%) and Kospi (+0.2%) Following the trend, the STI is likely to get off to a weak start today. The STI has fallen back to the 3,027–3,113 trading range, and may trend lower following the recent break below the 50-day moving average. Stocks to watch *Popular Holdings: 3QFY14 net profit tumbled 31% to $8.1m taking 9MFY14 net profit to $13.4m (-33%). Revenue rose 2.2% to $156.2m n, largely due to higher revenue achieved by the Property and Publishing & e-Learning divisions, partially offset by lower revenue achieved by the Retail & Distribution division. Bottom-line was weighed by an 18% rise in admin and distribution and selling expenses. *XMH: 3QFY14 net profit leapt 48% y/y to $3.2m on 71% surge in revenue to $33.1m, mainly due to maiden contribution from recently-acquired Mech-Power Generator and higher gross margin of 27.1% (+2.7ppts) on a change in mix in its distribution and after-sales business segment. *Khong Guan: 1HFY14 net profit crashed 100% to $0.1m on a 10% decline in revenue to $30.5m. The short supply of edible oil sourced locally in the state of Sabah and heightened market competition were the main factors weighing on top-line. The extreme disparity in bottom-line was due to the lack of contributions from other income at $0.3m versus $12.2m in 1HFY13. *Koon Holdings: Has entered into a 50:50 JV agreement with ASL Marine in relation to PT Sindomas Precas, an Indonesian entity that engages in the business of concrete precast operations in Batam, Indonesia. The group believes that the JV has the potential to expand the group's precast manufacturing operations beyond its existing plants in Singapore and Malaysia and thereby provide shareholders with a suitable return on their investment. *Fabchem China: Profit Warning -The group’s profit is expected to be materially lower for its MarFY14 performance as compared to the corresponding period. The materially lower FY14 net profit is mainly attributable to three factors which have been previously announced being the constrained production following the explosive accident that occurred at an unrelated commercial explosives manufacturing plant in Shandong Province; lower demand for explosive‐grade ammonium nitrate in China; and higher raw material input costs. *Wilmar: Granted a US$2.49b revolving loan facility (upsized from US$1.75b) from a syndicate comprising inter alia, BNP Paribas, Maybank, Mizuho, OCBC, Rabobank. *Perennial China Retail Trust (PCRT)/ St James Holdings: St James made a voluntary conditional offer for PCRT at $0.70 per unit (27% premium to last close). The acquisition will amount to $1.56b, to be satisfied via the issue of 0.5954 new shares in St James at $1.1756 each, post a 50-into-1 share consolidation. Upon completion, the proposed acquisition would result in a RTO for St James, with the new shares representing 99.3% of its enlarged share capital. In conjunction, St James has proposed to return all its existing businesses to shareholders via a distribution in specie. *Unionmet: Proposed to dispose loss-making Guangxi Intai Technology (GIT), which manufactures and trades in non-ferrous metals comprising indium ingots, for a consideration of $5.5m. The disposal is in line with Unionmet's recently-approved diversification into property development and oil blending and distribution. *Vard: Secured contracts from Mermaid Marine Australia to design and construct two platform supply vessels, scheduled for delivery from its Vietnam yard in 4Q15 and 1Q 16. *Swiber/ Vallianz: Swiber raised its equity interest in Vallianz from 23.56% to 25.57%, via the exercise of 55m share options. Subsequently, Swiber still holds 209m options at an exercise price of $0.055 per option. *Allied Technologies: Received notification of inclusion into SGX Watch List with effect from 17 Mar 2014.