SG Market (01 Apr 14)

US shares rose higher to end 1Q14 with moderate gains. The S&P500 advanced 0.8% to close at 1,872. Gains were broad-based with nine of the 10 S&P500 sector indexes closing higher. Sentiment was buoyed after Fed Chairman Janet Yellen highlighted that the Fed still has a long way to go in restoring the economy and labor market, alleviating concerns of an earlier than expected rate hike. The materials sector was the best performer, jumping 2.1% as a group, while technology and financial shares whose fortunes are tied to the pace of economic growth also outperformed. However, the Asian bourses are weaker currently, ahead of China manufacturing data due later this morning. The Nikkei and Kospi are down 0.3% and 0.4% respectively. The STI may open slightly softer, when OCBC shares resume trading this morning. The bank intends to make an offer for Wing Hang Bank shares at a price above street expectations. On the daily charts, the STI trend remains positive, with the index having broken above its long term declining trend line and the 3,150 psychological resistance. The key RSI and Stochastic indicators continue to exhibit strong upward momentum, which suggests the index may climb further to test 3,200 followed by ~3,240 (200day moving average peak in Oct ’13) in extension. Stocks to watch: *OCBC: Makes pre-conditional voluntary general cash offer for Wing Hang Bank shares at HK$125 each, coming in above market expectations for a HK$115 per share bid. While OCBC sees the HK$38.4b deal as earnings accretive, the overhang on its shares may continue as investors remain concerned about the deal valuations and dilution risks arising from a potential subsequent equity fund raising. *Mapletree Greater China Commercial Trust (MGCCT): Flooding occurred at certain parts of its Festival Walk mall earlier this week due to the torrential rain in Hong Kong. The damaged rainwater discharge pipes have since been repaired. Management believes this incident to have minimal impact on DPU. *Polaris: To pay up to US$1m for Shopdeca.com, an e-commerce company which started in Indonesia and is expanding into Singapore. *Pacific Radiance: Bagged a contract worth up to US$100m for its latest maintenance work vessel (MWV) - the first of 14 newbuilds scheduled for delivery in FY14. The vessel will be chartered to an international oil major for up to seven years, including extensions, and should contribute earnings from 2QFY14. *GLP: Leased 21,000 sqm at GLP Hiroshima to new customer Sagawa Global Logistics, one of the largest third-party logistics providers in Japan. *Charisma Energy: Secured a sales contract for delivery of a rig. The transaction is expected to be completed in 2Q14 and is expected to contribute a net profit of ~US$7m. Separately, the group has terminated a contract to provide a rig for a SE Asian national oil company based in the Andaman Sea. *Ascendas Hospitality Trust: Completed a $50m private placement of 73.5m new shares at $0.68 each. Proceeds will be used to partially fund the acquisition of Osaka Namba Washington Hotel Plaza. *LionGold: CEO Nicholas Ng Yick Hing has resigned due to a medical condition. Separately, the group has proposed to raise $5m from a new share placement of 37.3m shares at $0.134 each, as well as to raise a total of $35m from the issue of convertible bonds. *HPH Trust: Associated Company Shenzhen Yantian Tugboat Company entered into an equity transfer agreement to acquire 13% equity interest in ShenZhen Unitug for a total cash consideration of Rmb2.27m *ICP: Proposed to spin off 17.2%-owned investment, Mount Adrah Gold (MAG), via an IPO on ASX in 2Q14. MAG has a portfolio of gold projects in New South Wales, Australia, where the JORC code compliant mineral resource estimate is 770,000 oz of gold (440,000 oz Indicated, 330,000 oz Inferred), within a total mineral resource estimate of 20.5Mt at 1.1g/t gold. *SIIC Environment: Disposed entire 52% equity-interest in Kunming Nanfang Water at Rmb14.5m (S$3m), Rmb4.5m ($0.9m) above NAV.