Thursday, April 24, 2014
SG Market (24 Apr 14)
US stocks ended lower, snapping a six-day winning streak for the S&P 500 and Nasdaq, dragged by weak new home sales and mixed earnings reports. Sentiment took a hit after new home sales plunged 14.5% in Mar to a 384,000 annual pace - the lowest level since Jul and well below forecast of 450,000. The Markit survey of manufacturing PMI for Apr slipped to 55.4, missing estimates of 56. Boeing (+2.4%), Dow Chemical (+0.9%) and Delta Air Lines (+6.1%) registered strong gains from upbeat results but the impact was offset by poor performances from telecom firm AT&T (-3.8%) and biotech giant Amgen (-5%). Homebuilders lost 1.6% with DR Horton (-2.2%) among the biggest declines. Also weaker were major tech plays Google (-1.5%) and Microsoft (-0.8%). Earnings reports from tech heavyweights Apple and Facebook after the closing bell drew much attention. Facebook (+2.8%) rallied in extended trading after its 1Q profit nearly tripled, while Apple (+7.5%) surged after its quarterly earnings topped estimates and approving a 7-for-1 stock split and US$30b share buyback. S’pore shares finally succumbed to the overbought market situation yesterday, and could see a short term pullback. The STI may look for downside support at 3,230 with possibility of filling the runaway gap at 3,219. Stocks to watch: *MCT: 4QFY14 DPU grew 12.4% y/y to 1.953¢. NPI climbed 12.2% to $50.9m, on the back of positive contributions from VivoCity, PSAB and full quarter contribution from Mapletree Anson (acquired Feb ’13). Portfolio occupancy remained healthy at 98.2%, with a WALE of 2 years. Aggregate leverage improved 2.2% to 38.7%. NAV per unit stood at $1.16. *Cache Logistics Trust: 1Q14 DPU fell 2.4% to 2.14¢, while distributable income fell 5.5% to $16.6m. Revenue and NPI both climbed 8.2% to $20.7m and $19.6m respectively, attributable to additional rental income higher rental and acquisition of an investment property in 2013. Portfolio occupancy was 100%, with WALE of 2.9 years. Aggregate leverage stood at 29.1%. NAV per unit of $0.98. *CRCT: 1Q14 results in line. Distributable income increased 13 y/y to $19.6m, while DPU grew 4%to 2.4¢, driven mainly by CapitaMall Grand Canyon's (Beijing) first full quarter contribution, though partially offset by the absence of contribution from CapitaMall Minzhongleyuan (Hubei) which has been closed for AEI works since Jul '13. Gross revenue jumped 22% to $48.1m and NPI expanded 25% to $32.3m, supported by healthy rental reversion at its multi-tenanted malls (+23%). Overall occupancy rate held steady at 98.4% with WALE of 9.6 years. Aggregate leverage ratio improved 0.8ppts to 31.8%. NAV per unit stood at $1.48. *SGX: 3QFY14 slightly beat bearish street estimates. Net profit fell 22% y/y to $75.8m, while revenue was down 13% to $165.6m, as securities revenue plunged fell 32.4% to $52.3m following a penny stock rout. Derivatives revenue decreased 1.5% to $52.3m, while Issuer Service and Market Data Connectivity revenue recorded slight increases. *Genting HK: Beneficiary of potential recovery of bilateral tourism flows, after HK lifted sanctions against the Philippines. Both governments agreed to resolve the diplomatic dispute over the handling of the 2010 hostage crisis in Manila that involved the deaths of some HK tourists. *Vallianz: Updates that it has participated in bids worth over US$1.2b for projects in Asia, Middle East, Latin America and Africa. To support the potential projects, Vallianz intends to expand its current fleet of five vessels by an additional 24 vessels to be delivered over the next two years. *GLP: Signed five new lease agreements with existing third-party logistics customers, for a total of 155,000 sqm of space in Shanghai and Guangzhou. *Wee Hur: MOU to invest a total of Rmb120m for a 37% stake in two mixed-used development projects in Jiangsu. *Rex Int’l: London-based broker, SP Angel, has initiated coverage on Rex with a TP of $1.19. It is expected that SP Angel would issue a more comprehensive report on Rex in the coming weeks. *City Dev: its 70% owned Millenium & Corpthorne NZ updates that associate First Sponsor Capital has received an eligibility-to-list letter from SGX for its proposed IPO. If successful, the latter, a Chinese property developer, expects the listing to occur in 3Q14. *Sunpower: Hired Stirling Coleman Capital as its agent for the placement of up to 65.8m new shares at $0.14 each. The net proceeds of $8.9m will be used for general working capital. *BRC Asia: To issue up to $10m worth of equity-linked redeemable convertible bonds (CB) to 11 investors, with net proceeds to be used for working capital. The CBs carry a coupon of 5% pa, and have a conversion price of $0.20 per share. Share dilution of up to 5.33% upon full conversion. *Sing Land: UIC has raised its stake to 90.15%. Sing Land no longer meets SGX’s minimum free float requirement of 10%, and the shares will be suspended following the close of UIC’s takeover offer on 25 Apr. *Sinotel: Profit warning. Expects to report a loss for 1Q14 due to lower equipment sales.