SG Market (21 May 14)

US Market: US stocks slumped, halting a two-day advance, as a batch of disappointing earnings from retailers and hawish comments by a Fed official weighed on investor sentiment. The DJIA dropped 138 pts to 16,375 (-0.8%), while the S&P 500 fell 12 pts to 1,873 (-0.7%) and the tech-heavy Nasdaq lost 29 pts to 4,097 (-0.7%). Investors appear to be favouring fixed income over equities as concerns of overvaluations roiled stocks, particularly the high growth Internet shares (0.7%) and small caps (-1.5%). Selling intensified in the afternoon after comments from Philadelphia Fed President Charles Plosser endorsed a speedier rise in interest rates as the economy improves. Retail stocks swooned after a handful of dismal earnings from office supplier Staples (-12.6%), clothing and home furnishing seller TJX (-7.6%), specialty retailer Urban Outfitters (-8.8%) and Dick’s Sporting Goods (-18%). General Motors (-3.5%) slumped after making another vehicle recall, while Caterpillar (-3.6%) retreated after reporting a sharp drop in Apr machinery sales. Apart from the FOMC minutes due today, there little potential catalyst on the economic and earnings fronts to spur markets between now and Jun. Regional markets in Tokyo (-0.4%) and Seoul (-0.2%) opened in negative territory, tracking the weakness on Wll Street. S’pore shares likely to see lacklustre trading with STI trapped within the 3,285-3,220 trading range and the 20-dma providing immediate support at the 3,254 level. Stocks to watch: *Sembcorp Marine: Secured a US$236m contract to build a high specification jack-up rig for new customer Hercules Offshore, scheduled for delivery in 2Q16. This brings its new orders secured in 2014 to $1.93b and its order book to $13.2b, with deliveries extending into 2019. *Ezra: Won several contracts totaling US$95m, including subsea cable works (US$40m) in the North Sea and Gulf of Mexico and offshore supply services (US$55m) in Africa and Asia. The latest wins brings order book to US$2b, with a majority expected to be executed over the next 12 to 18 months. *RH Petrogas: Disclosed that its controlling shareholders have been approached by an investor regarding a potential proposal which may lead to a takeover offer. *BH Global: Awarded $18.8m worth of contracts, including one with a Japanese shipyard for the electrical/telecom outfitting of a mobile offshore vessel and another to design and integrate engine exhaust jet systems for jack-up rigs in the Gulf of Mexico, both to be delivered in 2016. The third project is for the supply of marine cables and lightings for both local and global shipyards with delivery in 2014. The new contracts will bring its rder book to $47m. *Swee Hong: Secured a $7.9m contract from PUB for the ABC Waters Project at Pang Sua Pond and Toa Payoh Lorong 8 with completion due on Dec 2015. *TA Corp/ King Wan: TA Corp (62%) and its partners King Wan (38%) and SKM Development (38%) have jointly secured a land tender for a 9,200-bed worker accommodation facility for $113.9m. The 37,170 sqm plot located in Tuas South has a lease term of 20 years, which will be developed into one of the largest workers' accommodation facilities in Singapore, with targeted commencement by 2016. TA Corp has a right of first refusal to be the main contractor for the project. *CNMC: Commenced production at its third leach yard at Sokor Gold project. This raises the group's total production capacity by 67% to 1m tpa. Following this, CNMC will begin design work for the fourth leach yard. *Yongnam: Both its CEO and finance director have been cleared by CAD of securities infringement and the cases against them have been closed. *Biosensors: Updated that CITIC Private Equity Funds Management is still considering options available to enhance its investment value, including a restructuring of its shareholding interests. *WE Holdings: Extended the cut-off date for its proposed acquisition of Dragon Cement from 20 May to 20 Aug '14.