SG Market (03 Jun 14)

US Market: US shares inched to new records, recovering from earlier losses following a solid report on US manufacturing activity. The DJIA advanced 26 pts to 16,744 (+0.2%), while the S&P 500 gained 1 pt to 1,925 (+0.1%), but the Nasdaq dipped 5 pts to 4,237 (-0.1%) on weaker tech sector. Markets got an unexpected lift during the mid-session, after the ISM revised its US manufacturing PMI for May to 55.4 from 54.9 in Apr, after correcting its earlier reading in the morning which showed a decline. The rally may continue further this week given the heavy schedule of potential catalysts lined up, including ECB meeting on interest rates, US factory orders and monthly jobs report. But with volume and breadth on the wane, there are concerns that the market may be topping out. Industrials and material stocks were among the biggest gainers, while the technology sector ended lower, weighed by Apple (-0.7%) and Google (-1.3%). Among other stocks in focus, chipmaker Broadcom surged up 9.3% after indicating it will explore the sale or closure of its cellular baseband business. Following the positive moves on Wall Street, the STI is expected to edge higher at the open, with next resistance at 3,320 and immediate support at 3,285. Stocks to watch: *HanKore: Acquiring China Everbright’s water business for $1.21b or 4.5x P/B via issue of 1,940.3m shares @ $0.703 or 1.5x P/B. Upon completion of RTO, China Everbright will own 78% of HanKore, which will be renamed China Everbright Water. In total, the enlarged group will have 32 wastewater treatment plants, four reusable water projects, one wastewater source heat pump project, two completed build-transfer projects, 56km pipeline network and 10 pump stations. Post deal proforma FY13 NAV will drop 39% to Rmb1.56 and EPS will double to Rmb0.10. *Chip Eng Seng: Clinches $165m HDB contract to construct 8 housing blocks and community facilities in Sembawang with completion in 2Q17. The latest contract win will bolster its order book to $618m. *Vard: Signed LOI with Nordic American Offshore for the design and construction of two platform supply vessels with option for a third vessel. The design of the PSVs will be developed in Ålesund, Norway, while the hulls will be built at Vard Braila in Romania. Delivery is scheduled in 2Q and 3Q15. *Sembcorp Marine: Secured a long term favoured customer contract form GasLog to service its fleet of 20 LNG carriers. *Longcheer: Disclosed that it has been approached by interested buyers for certain subsidiaries and discussions are ongoing with no certainty that it will result in a transaction. *JES: Disclosed two contractual disputes with Dunhuang Shipping and The Shipping Corp of India, which resulted in the cancellation of two 82,000 dwt bulk carriers, and refund claims of advances received of Rmb97m and Rmb85m respectively. *Oxley: Proposed 2-into-3 share split to increase market liquidity and broaden shareholder base. *W Corp: Obtained approval-in-principle from SGX for its proposed acquisition of YuuZoo Corp for $490.9m via an issue of 490.9m shares at $0.50/share, post 10-into-1 share consolidation. This RTO deal will transform the group into an e-commerce social networking platform. *GuocoLeisure: Clarified that it has no intention to delist from SGX.