SG Market (02 Apr 14)

US stocks ended on a positive note with the S&P500 advancing 0.7% to close at a new all-time high of 1,886, buoyed by mildly positive manufacturing data and better-than-expected car sales. Trading volumes remain subdued, with gains driven by a rebound in the technically-oversold Nasdaq and technology names, while the auto industry stocks rallied. Amongst other stocks in focus, beaten down high-beta Chinese Internet and solar stocks popped back up along with the tech rally, while US casino companies with exposure in China surged following stronger Macau revenue growth data, with Las Vegas Sands (+2.4%), Melco Crown (+5.7%) and WYNN (+2.3%). Over in Europe, markets were higher, led by a steady PMI data for the euro zone manufacturing which extend the region’s recovery in the manufacturing sector to nine consecutive months. Meanwhile euro-area unemployment rate held at 11.9%, slightly better than the 12% that economists expected. In the region, the Nikkei and Kospi are up 0.9% and 0.3% this morning. The S’pore market may open on a firmer note, likely propped by the commodities traders after Noble received a cash offer from Chinese food giant, COFCO for a stake in its agri business. On the daily charts, the STI trend remains positive, with the key RSI and Stochastic indicators continuing to exhibit strong upward momentum. A breach of the 3,200 level may see the STI make a next move toward ~3,240 (200day moving average peak in Oct ’13). Stocks to watch: *Noble: COFCO will acquire a 51% stake in Noble Agri in an all cash transaction. The deal will be valued at 1.15x FY14 P/B, which translates to an initial payment of US$1.5b to Noble. This is higher than the US$1b deal price that newswires initially touted, and nearly double the street’s estimate of ~US$0.8b for the stake. Expect positive market reaction. *Yangzijiang: Secured 18 effective orders worth US$815m in Mar, comprising two 82,000 dwt bulk carriers, one 208,000 dwt bulk carrier and four 10,000 TEU containerships – converted from existing options), and 11 new orders for 82,000 dwt bulk carriers. Deliveries are scheduled to take place between 2015 and 2017. Year-to-date, the group has secured a total of 26 effective shipbuilding contracts with an aggregate value of US$1.07b. *China Mining Int’l (CMI): Proposes to acquire China Minerals Energy (CME) in $1b reverse takeover (RTO) deal to become a pure mining play. CME is 51% owned by Henan government-backed China Geological Exploration (CGE) and 49% owned by Guide True, the investment vehicle of CMI’s Chairman, and has interests in five mining assets. The acquisition will be satisfied by the transfer of shares in CMI’s existing property business and exploration rights over iron ore mines in Xinjiang and Henan provinces, and the issue of 10.3bn new shares at $0.09 each. *KTL Global: Purchased four commercial units worth RM6.3m at KL Trillion for investment purposes. The units are expected to be completed in 2015. *GKE: Expects a net loss for 9MFY14 due to acquisition-related costs and higher staff and depreciation expenses. *Transview: To be renamed to Transcorp Holdings wef 3 Apr. *Changjiang Fertilizer: Auditor warns that following the recent FY13 financials, the weak demand for the group’s products indicate a material uncertainty which may cast significant doubt on its ability to continue as a going concern.