SG Market (28 Mar 14)

The S&P500 ended Thursday 0.2% lower at 1,849, dipping below its key support level of 1,850. Losses were led by the tech and financial sectors. In a case of “good news being bad news”, while the US 4Q GDP figures were revised up, and weekly jobless claims fell by more than expected to the lowest level in four months, investors worried that the improving economic data might lead the Fed to start raising rates earlier than anticipated. Similarly, both the Nikkei and Kospi are down 0.6% and 0.3% at 8.35am this morning. Amid the dry corporate news flow, the S’pore market may take cue from the regional markets and open softer before heading higher later in the day. From a technical perspective, the STI has broken above its long term declining trend line and the 3,150 psychological resistance. An extension of the positive momentum could propel the index further to test 3,200 next. Stocks to watch: *Neo Group: FYJan14 net profit more than doubled to $6.4m, as revenue grew 26% to a record $52.4m, driven by robust growth in the food catering business. Final dividend of 1.51¢ per share brings full year payout to 2.67¢ (FY13: 1.5¢). To support future growth, the group has launched a new product range under the brand name “Best Catering” to cater to the mass market with Tingkat services and economical buffets. Neo will also build a new centralized kitchen that will increase its capacity from 10-15k guests/day to 15-20k guests/day. *CapitaLand: Agreed to subscribe for a 60% stake in two JV companies for total cash consideration of Rmb752m, which will develop two adjacent residential sites in Chengdu. The sties measure a total of ~133,333 sqm and can be developed into 4,600 apartment units with gfa of 479,850 sqm. *Sembcorp Industries: Commenced construction of its largest energy-from-waste facility in Singapore, worth over $250m. The project, to be completed early 2016, will be the first to use industrial and commercial waste to produce steam for supply to companies on Jurong Island. *Osim: Its 55% owned Brookstone, a US retailer, has filed for bankruptcy. Nevertheless, there will be no further financial effects on Osim, which previously made a $77m write-off of Brookstone in 2009. *SGX: Said to be considering gold futures contracts, which includes gold for physical deliveries in and out of S’pore. *Grand Banks Yachts: Has appointed Washington-based NW Explorations (NWE) as a Grand Banks authorized services centre, and endorsed NWE to both sell and charter Grand Banks yachts. *Asiasons Capital: Term sheet in relation to the proposed acquisition of a 20% stake in Black Elk Energy Offshore Operations has lapsed. *Memstar: goes ex today for its distribution-in-specie (75 United Envirotech shares for every 1,000 Memstar shares) and capital reduction (~2.45¢).