SG Market (16 Apr 14)

US stocks ended higher in a choppy session marked by upbeat earnings from Dow components Coca-Cola and Johnson & Johnson, disappointing readings on homebuilder sentiment and NY-area manufacturing, and heightened tensions in Ukraine. The dollar edged up on improving inflation data (+1.5% y/y in Mar). Gold dropped 2.1% to US$1,300/oz on worries about weaker demand from China, and oil prices slipped as supplies are expected to remain ample. The broad-based S&P 500 rose 0.6% to 1,843, led by enegery and utilities, while the tech-heavy Nasdaq fell to a five-month low, just off its 200-day moving average, before rebounding. Much of the action was in the tech sector. Facebook ended up 0.3% after plunging more than 5%, while Yahoo lost 2.4% before recovering to a 2.3% gain. Twitter surged 11.4% after announcing its purchase of data analysis firm Gnip. Asian market watchers will be focusing on GDP data out of China with economists forecasting weaker-than-expected 1Q14 growth of 7.3%, below the official 7.5% target. The Nikkei opened 1.7% firmer in early morning trades on hopes for more BoJ support following an economic downgrade, while Kopsi was flat. S’pore shares may trend higher after breaking past the 3,230 hurdle but gains are likely to be capped at the 3,267 resistance as investors await further direction from China’s 1Q14 economic growth due this morning. Support now sits at 3,210, followed by 3,150. Stocks to watch: *Keppel Land: 1Q14 net profit missed expectations, falling 9.2% y/y to $87.7m, weighed by an absence of tax write backs and timing of overseas completions. Revenue however climbed 37.6% to $284.9m, driven largely by contributions from China residential projects. S’pore residential sales was soft, with only 54 units sold in 1Q14 (4Q13: 60) mainly from The Glades in Tanah Merah. NAV stands at $4.58. *Cambridge Industrial Trust: 1Q14 DPU rose 1.4% to 1.251¢. Net property income however, declined 11% y/y to $19.0m, due to the divestment of Defu Lane property during the quarter and absence of line rent adjustment in the prior period, as well as increased utilities costs and facility management expenses. During the quarter, Cambridge completed the acquisitions of two S’pore properties which will start contributing from 2Q14 onwards. Cambridge’s portfolio WALE stands at 3.6 years, aggregate leverage at 29.9%, and NAV per unit at $0.694. *Yanlord: Acquired a 171,200 sqm gfa prime residential development site in Suzhou Gao Xin District for ~Rmb1.35b (Rmb7,885 psm) in a public land auction. The site resides within Zuhou’s focal school district and benefits from its metro links. *Ezion: Secured two 3-yr charter contracts worth an aggregate US$78.7m, comprising i) a US$43.7m contract from a South Asian-based national oil company to provide a service rig for deployment in the Arabian Sea, and ii) a US$35m contract from a Middle Eastern state-linked company to provide a service rig for deployment in the Arabian Gulf. Both projects are expected to commence in 1H15. Separately, the company has requested for a trading halt. *GLP: Signed three new lease agreements totaling 96,000 sqm with existing customers for its facilities in Xi’an, Ningbo, and Qingdao. The customers are Yunda Express, one of China’s largest express delivery companies (46,000 sqm), Gooday Logistics, a JV between Haier and Alibaba (32,000 sqm) and Best Logistics (18,000 sqm). *SIA: Mar operating data. SIA pax carriage declined 5.4% y/y, while seat capacity remained constant. Accordingly, pax load fell 4.3ppts to 75%, with the decline from across all route regions, as Easter demand shifts from Mar last year to Apr this year, and soft demand to Bangkok. Yields are expected to remain under pressure as efforts are made to boost loads in the challenging operating environment. Cargo traffic declined 2% y.y against a 3.1% capacity cut, leading load factor to rise by 0.8ppt to 68%. Separately, SIA will be title sponsor for the S’pore F1 Grand Prix for the next two years. *k1 Ventures: Has completed the sale of its 80.1% effective interest in Long Haul Holding Corp (Helm) for US$152m.k1 has received US$122m cash, net of seller transaction costs (US$9m) and certain post-closing obligations deposited into escrow (US$21m). The escrow funds are scheduled to be released within 18 months. *Charisma Energy: The 980m new shares (10% of expanded share base) issued to various options holders and convertible capital securities holders, will be listed (on or around) today.