SG Market (5 Mar 14)

Morning Bites Global stocks rebounded as markets took a reprieve from the recent slump, after Russian President Vladimir Putin said he is not considering taking control of Crimea and would send troops into Ukraine only in “extreme circumstances”. Sentiment was further buoyed by predictions from the Obama budget that the US economy will grow this year at its fastest pace since 2005, with GDP tipped to expand 3.1% in 2014, and the jobless rate to average 6.9% this year (from 7.4% in 2013). In the US, the S&P hit new record highs on strong volume (1,873.89, +1.5%), and the Nasdaq posted its best gain in four months, and the Russell 2000 index of small caps also closed at a record high. Regional markets opened strongly too this morning, lifting the Nikkei (+1.6%) and Kospi (+1.1%) higher at 8.30am. Propelled by the macro “risk-on” mood, the STI could move to test the 3,159 resistance level (200d moving average) in the near term. Stocks to watch: *Noble: Confirmed that it is currently engaged in discussions in relation to a potential JV around its agri business. A deal, if it materializes, is estimated to be worth potentially US$1b, with China agri giant, COFCO tipped by media as the potential buyer. *Amtek: To buy US-based Interplex Industries for up to US$210m, valuing the precision engineering solutions provider at an estimated 0.6x P/S, 6.4x P/EBITDA. Amtek sees the acquisition as EPS accretive, highly strategic and complementary to its business. The combined group will become one of the world’s largest precision engineering companies with global sales of ~US$1b. The deal is expected to take place in 1HFY15, subject to regulatory and shareholder approvals. *Ezion: Secured a contract worth US$87.6m over a three-year period, to provide a jackup rig to support a South Asian based national oil company. The jackup rig is expected to be deployed in the Arabian Sea by early 2015, after its refurbishment and upgrading. *GLP: Will partner with Jinbei Auto to develop logistics and industrial facilities totalling up to 2m sqm in the Shengyang Economic Development Area, starting with an initial 0.25m sqm of "state-of-the-art facilities". Jinbei is a subsidiary of state-owned Brilliance, which produces BMW branded cars for sale in China. *Metro: Will replace Robinsons as the anchor tenant at Centrepoint shopping mall in Orchard Road, after the latter’s lease expires in May. Metro will take up six floors or 130,000 sf of retail space. *JES: Plans to raise $7.2m from four private investors, via a placement of up to 50m new shares (~4.3% dilution) at $0.14463 each. The proceeds will go toward strengthening the group’s capital base, fund business growth and expansion, and for working capital. *Elektromotive: Secured three contracts worth a combined £2.9m (~$6.1m) to supply rapid charger stations across certain parts of England. These stations will be part of England’s electric vehicle public charging network. Elektromotive UK will install and maintain the chargers. The first contract will begin next month, with 50 stations expected to be installed across South East England by Mar '15, and another 40 stations across the UK in the next 12 to 18 months. *Singapore Windsor: Entered into a non-binding MOU for a 2-year dealership of machine and spare parts in Myanmar. The group also proposed to diversify into new business segments in South East Asia, especially Myanmar, involving i) trading, distribution and retail, ii) infrastructure-related (telco and construction), and iii) limousine services. *Novo: Profit warning. Expects an increased loss in 9MFY14, due to higher costs on the commencement of test run of its tinplate manufacturing plant in Jiangsu and tinplate processing plant in Tianjin, and lower trading profits due to unfavourable market conditions. *Scintronix: Applied for second extension to meet the requirements to exit the SGX Watch-List on account that the group had entered into a MOU to acquire Chongqing-based Bestway Steel Building Co (BSB), which produces and installs steel structures for office buildings, industrial buildings and sports stadiums. *Youyue Int’l: Applied to extend to meet the requirements to exit the SGX Watch-List after the group announced a potential diversification into a new business to improve its profitability.