SG Market (19 May 14)

US Market: US stocks ended higher on Fri on a late reversal as a buy-on-dip strategy took hold amid mixed economic data. The DJIA advanced 45 pts to 16,491, while the S&P 500 added 7 pts to 1,878 after finding support at the 50-dma and the tech-heavy Nandaq rose 21 pts to 4,091. Housing starts jumped 13.2% in Apr to its highest level since Nov as gains in the volatile multi-family units helped overcome the slack in demand for single family homes. But separate data showed consumer confidence fell this month after reaching a 9-month high in Apr on a gloomy outlook for income growth. Market sentiment was boosted by better-than-expected earnings from retailers Nordstrom (+14.7%) and JC Penny (+16.3%). Telecom shares surged as Verizon (+2.3%) was bought up after Warren Buffet’s Berkshire Hathaway disclosed a stake. Homebuilders edged up 0.4% on the upbeat home construction news. S’pore shares are likely to see a mixed opening with the market searching for new direction following the end of the 1Q results reporting season. The STI is expected to hover between the the 3,285 and 3,220 trading range with the 20-dma at 3,254 providing immediate support. Investors this week will look to the minutes of the latest FOMC meeting due to be released on Wed, as well as possible announcement of Singapore’s new bus business model. Stocks to watch: *SingPost: Q4FY14 net profit rose 17.7% y/y to $30.7m, while revenue climbed 5.9% to $193.3m, as new subsidiaries and e-commerce activities drive growth. Domestic mail volumes continued to drop, marking a second consecutive year of decline. Bottomline was buoyed by lower finance expenses following a bond repayment last year, as well as the absence of one-off write-offs. Final DPS of 2.5¢ proposed, bringing full year payment to 6.25¢. *Wilmar: Board of Goodman Fielder has backed the improved A$0.70/share takeover bid by a Wilmar/First Pacific joint venture and recommends that Goddman’s shareholders vote in favour of the revised proposal. Due diligence is expected to take several weeks. Goodman owns brands such as Meadow Lea, Meadow Fresh, Praise, White Wings, Pampas, Mighty Soft, Helga's, Wonder White and Vogel's. *Olam: Investing US$61m to build a cocoa processing facility in Indonesia in order to leverage on the Indonesian cocoa sourcing network and growing cocoa consumption in Asia. The facility will have an initial capacity of 60,000 tonnes and will produce cocoa butter, cocoa cake and high quality cocoa powder, from Indonesian beans and Olam's farm-gate networks in Africa. *Del Monte Pacific: Issued profit warning that it expects to report a net loss for the Jan-Apr period (financial year end changed from Dec to Apr) due to non-recurring Del Monte Foods acquisition-related expenses, inventory step-up and a one-time write down of fixed manufacturing costs. Group will report its results on of before 14 Jun. *China Kunda: Expects wider net loss for FY14 due to lower gross margins and higher impairment losses on plant and equipment. *SingTel: Announced a share buyback of up to 595,000 shares, between 19-23 May period. *HanKore: Will go ex on 22 May for its 10-into-1 share consolidation.