Wednesday, March 19, 2014
SG Market (19 Mar 14)
US stocks advanced higher as markets reacted positively to Russia President Putin’s comments that he does not want to see a partition of Ukraine, despite signing a treaty to annex Crimea from the latter. The S&P500 rose 0.7% to close at 1,872. Homebuilders outperformed, with the S&P sector index rallying 1.5% after Feb housing starts data indicated that the industry is stabilizing. Separately, the US Consumer Price Index (CPI) was little changed at 0.1%, in line with estimates. Among other stocks in focus, Microsoft jumped 4% to close at its highest level in 14 years on expectations its Office suite of products could appear on Apple devices, while Oracle fell more than 4% after 3QFY14 earnings fell short of estimates. Following the positive overnight performance in the US, regional markets are higher this morning, with the Nikkei (+0.7%) and Kospi (+0.3%), as at 8.27am. The STI may open higher, with the index to test the resistance levels at 3,102 (20-day MA) and 3,146 (200-day MA) in extension. Still some investors may stay on the sidelines, ahead of the two-day FOMC meeting that end tonight. Consensus believes the Fed will cut its bond buying program by another US$10b, and switch to qualitative guidance for signaling when it will raise interest rates. Stocks to watch: *CapitaLand: Has disposed of its remaining 39.1% stake in Australand at A$3.75 per share. The proceeds of ~$970m will be reallocated to CapitaLand’s core businesses in S’pore and China, and for general working purposes including repayment of debt. The group is expected to book a net gain of $35.7m from the sale. *Midas: Secured Rmb71.9m worth of contracts from CNR Changchun, comprising the supply of aluminium alloy extrusion profiles for 38 train sets (228 cars) for the Shenzhen Metro Lines 2and 5 projects, and for 24 train sets (144 cars) for the Wuhan Metro Line 4. The contracts are slated for delivery between 2014 and 2015. *Suntec REIT: Completed a private placement of 218.1 new units (10.5% dilution) at $1.605 each. Net proceeds of $341.4m will be used to repay existing debt and lower aggregate leverage from 39.1% to 35%. *Rickmers Maritime: Will charter two 3,450 TEU panama container vessels to Maersk Line. The vessels will be chartered for a period between 12-24 months. Expected revenue is US$5m for the first year. *FSL Trust: Disposes two dry bulk vessels for US$23.6m to cut debt, as part of its loan restructuring efforts. *China Fishery: Has compulsorily acquired all the remaining shares in Copeinca, and will pursue the delisting of Copeinca from the Osla Bors and the Lima Stock Exchange. *Amtek Engineering: SGX advises to "trade with caution" after the company responded to its query that it is not aware of any reasons to explain the substantial 22% increase in its share price over 13-18 Mar. *UOB: Sets up FX advisory and trading unit small businesses in Southeast Asia. *DBS: Has launched a working capital advisory programme to help companies reduce overall banking costs, and to identify and unlock “trapped cash”.