Wednesday, April 30, 2014
SG Market (30 Apr 14)
US Market: US stocks climbed, with Internet shares halting a four-day slide, as results from Merck and Sprint Corp beat estimates before the Fed's policy meeting. The Dow rose 87 pts to 16,535 (+0.5%), while the S&P 500 added 9 pts to 1,878 (+0.5%) and Nasdaq Composite tacked on 19 pts to 4,104 (+0.7%). Investors shrugged off subdued economic reports showing consumer confidence dipped in Apr to 82.3 vs expectations of 83.6, while home prices grew 12.9% in Feb, at its slowest annual pace since Aug. Among earnings, both Merck (+3.6%) and Sprint (+11%) topped forecasts, while Coach (-9.3%) tumbled after its 3Q results missed badly on poor store sales and rising competition. Internet stocks rebounded sending the DJ Internet Index up 2.2% with Facebook (+3.6%), Yahoo (+5.4%), TripAdvisor (+4.6%) and Google (+2.6%) scoring solid gains. Twitter (+4.6%) and eBay (+1.7%) climbed during regular trading but slumped 8.7% and 3.1% after the bell on disappointing 1Q growth and forward guidance. In Asian markets, both Nikkei (+0.7%) and Kopsi (+0.3%) had positive starts in early morning trades. S’pore shares are likely to open higher after regaining its footing at the 20-day moving average, taking cue of the advances in Wall Street and the regional bourses, as well as the upbeat results from DBS, OCBC, Yangzijiang and SIIC Environment. Near term topside resistance is at the recent high of 3,285 with underlying support at 3,230, followed by 3,206. Stocks to watch: *DBS: Solid 1Q14 results. Net profit jumped 30% y/y to $1.23b, which included a $223m gain from a stake sale in the Bank of the Philippine Islands. Excluding one-offs, core net profit of $1.03b still beat consensus of $877m. Overall, higher net interest margin, loan volumes and customer non-interest income more than offset a decline in market-related income. Asset quality further strengthened. NAV/share at $14.14. *OCBC: Robust 1Q14 net profit of $899m (+29% y/y), which came in above estimates. Record total income of $1.89b (+19%) driven by sustained momentum across all customer-related businesses. Net interest income surged to a quarterly high of $1.09b (+19%) and non-interest income jumped to $800m (+18%). Costs were well-managed, with operating expenses rising just 5% to $706m. NAV/share at $7.18. *Yangzijiang: 1Q14 net profit of Rmb799.2m (+11% y/y) was ahead of estimates. Revenue climbed 24% to Rmb3.5b, buoyed by increased shipbuilding-related activities (+18.4%) and higher contribution from the investment segment (+59.1%). Income tax fell 24% aided by preferential tax rates for a major unit, which helped offset a decline in gross margins to 29.5% (-6.5 ppt). *Indofood Agri: 1Q14 results missed even though net profit jumped 70.3% y/y to Rp181.9b. Revenue climbed 2.4% to Rp3.2t, driven by higher ASP of palm products and higher sales volume of CPO. Accordingly, gross profit gained 7.4ppt to 28%. *GuocoLand: Makes top bid of $530.9m ($688 psf ppr) for a large residential site in Sims Drive. The 99-year land parcel has a max gfa of 771,775 sf, and can yield ~900 units. Observers say the price was still “relatively high”. Estimated breakeven price of the development tipped at between $1,090 and $1,130 psf, with a selling price between $1,220 and $1,300 psf. *Blumont/LionGold/Annica/Magnus Energy: Requested by the Commercial Affairs Department to provide more information, including access to certain accounting records, minutes of meetings, documents relating to proposed M&A deals, and corporate emails of certain board members and key management personnel. *Ziwo: Conditional agreement to issue an aggregate 59.8m new placement shares at $0.1161 apiece to two individuals - Hong Jianchun (10m shares), MD of United Envirotech (Xiamen) and Hoi Cheng Pan (49.8m), Chairman of Dongshen Enterprises. Net proceeds of $6.9m will be used for general working capital purposes including business expansion.