SG Market (27 Mar 14)

US markets gave up early gains and faded sharply into the afternoon, led by losses in materials and technology sectors. The S&P500 sank 0.7% to close at 1,853, while the Nasdaq and Russell indices also fell, joining the Dow in being negative year-to-date. The highly anticipated IPO of King Digital (better known as the maker of hit mobile game Candy Crush) turned out to be a flop and closed 15% below its IPO price on its listing debut. Accordingly, peer Facebook also fell 6.6%. In the absence of meaningful macro news flow, the Nikkei is down 1.3%, while the Kospi is roughly flat, at 8.33am this morning. Amid the dearth of major S’pore corporate news flow, the STI may follow suit to open on a softer note. From a technical perspective, the STI broke above its long term declining trend line yesterday, hence any pullback may be limited to the 3,113 support level. Watch for a break above the 3,150 psychological resistance, as momentum could propel the index further to test 3,200 next. Stocks to watch: *Boustead: Its energy-related engineering division has in recent weeks secured over $50m in contracts from the oil & gas industries globally to supply process heater systems and waste heat recovery units to energy developments in Africa, Asia and Europe. Group order book backlog lifted to over $450m. *Hyflux: Inked a 50/50 JV agreement with Tolaram Corp to explore opportunities for the development of membrane-based water treatment plants in Nigeria. *Ascendas Hospitality Trust: To acquire Osaka Namba Washington Hotel Plaza for ¥8.9b ($110.8m or $159,000 per key), a 3.3% discount to independent valuation. The freehold, 698-room hotel will continue to be master leased to operator, Washington Hotel K.K. until end 2015, at a fixed rent of ¥653m ($8.1m) p.a. The acquisition is expected to boost pro forma DPU by 2% to 4.15¢. *Mandarin Oriental: Will expand its Munich hotel through the construction of a mixed use complex on an adjacent site. The group’s total investment in the project, which will also include a refurbishment of the existing hotel’s 73 rooms, is estimated at €124m. The project is estimated to be completed by 2021, and generate incremental EBITDA of US$17m in 2023. #Heeton/ Lian Beng/ KSH: A consortium comprising Heeton, Lian Beng (32.7%) and KSH (34.7%), has entered into a 49/51 JV with Cambodian national, Lok Oknha Sear Rithy, to acquire the Imperial Garden Villa & Hotel in Phnom Penh, for consideration of US$64m. *SATS: Extended the long stop date for the the acquisition of Singapore Cruise Centre to 30 Sep ’14; the Competition Commission of Singapore is about to commence phase 2 of its review.