SG Market (18 Mar 14)

US shares ended strongly Monday, with the S&P500 gaining 1% to 1,859, as investors shrugged off concerns on sanctions imposed by the US and EU against Russia, which sought to deter Russia from annexing Crimea from Ukraine. Instead, investors focused on better-than-expected US economic data, including industrial production which came in ahead of estimates, while ignoring weak manufacturing and homebuilder confidence data. Amongst key stocks in focus, Yahoo jumped 4.0% after its 24% owned Alibaba Group filed for an IPO in the US, while Hertz Global added 4.8% following reports that the company will spin off its equipment rentals unit. Regional markets are up this morning, with the Nikkei (+1.6%), ASX (+0.7% ) and Kospi (+0.6%) as at 8.20am. Expect a positive open for the STI today. The index may test the resistance levels at 3,101 (20 day MA) and 3,147 (200 day MA) in extension. Still expect volatility to remain, as the FOMC meetings take place over 18-19 Mar, and investors watch for new guidance from the Fed. Stocks to watch: *Keppel Corp: Secured contracts worth a total of $140m to fabricate an external turret mooring system for an FPSO vessel for SOFEC (expected completion by 1Q15), as well as to build two ice-class supply vessels and an ice-class multi-purpose duty-rescue vessel for Bumi Armada (expected delivery by 2015). *St James: Proposed a series of transactions that will effectively result in a reverse takeover by property group Perennial Real Estate Holdings, and a spin-off of the original leisure and entertainment business into a separate listing. Will also make a voluntary conditional offer to acquire Perennial China Retail Trust (PCRT) at $0.70, in exchange for 0.5242 new St James shares (post a proposed 50-into-1 consolidation). *DBS: To acquire Societe Generale’s Asian private banking business for US$220m, in a move that will boost DBS’ high net worth AUM by 23% to $85b. *SIA: Feb operating stats. Pax traffic dipped 2.1% y/y, even as the airline cut capacity by 0.4%. Consequently, pax load factor fell 1.4 ppt to 76.8%, with weakness from all route regions due to a combination of the Lunar New Year shifting from Feb to Jan this year, and softer demand to Bangkok. Cargo traffic and capacity was 11.1% and 4.0% lower y/y, respectively. Consequently, cargo load factor fell 4.6 ppt to 58.1%. *Yongnam: Secured two subcontracts worth a combined $54.3m to provide more than 10,000 tonnes of structural steelworks for projects such as Changi International Airport Terminal 4 and redevelopment of UIC Building along Shenton Way. The contracts are expected to have a favorable impact on the group’s FY14 financials. *Int’l Healthway Corp (IHC): To buy two more freehold properties in Australia for a combined A$63.8m - an eight-storey commercial building at St Kilda Road, Melbourne (A$35.8m) and a four-storey medical-use building at Geelong (A$28m). *Hankore: Recently met with fund managers from more than 10 institutions, including Goldman Sachs Asset Management, Fullerton Fund Management (a unit of Temasek), Daiwa Asset Management, Lloyd George Management (a member of the BMO Financial Group), and Mitsubishi UFJ Trust at the Bank of America Merrill Lynch ASEAN Stars Conference. * EuroSports / Cambridge Industrial Trust: Eurosports has completed the sale and leaseback arrangement relating to its premises at 30 Teban Gardens Crescent for consideration of $41m, paving the way for Eurosports to declare a one-time special dividend of between $6m and $8m (2.26¢-3.02¢ a share) for FYMar15. For Cambridge, pro forma FY13 DPU is expected to rise from 4.98¢ to 5.22¢. *China New Town Dev: Auditor issued an emphasis of matter highlighting that the group’s ability to continue as a going concern depends on the subscription of its new shares and its ability to generate sufficient cash to pay off liabilities when they fall due. *Transcu: Auditor issued an emphasis of matter as the group’s current liabilities surpassed current assets.