SG Market (04 Jun 14)

US Market: US shares dipped from record highs as investors looked ahead to ECB meeting on Thu and monthly jobs report on Fri. The DJIA dropped 21 pts to 16,722 (+0.1%), while the S&P 500 slipped 1 pt to 1,924 (-0.04%) and the Nasdaq lost 3 pts to 4,234 (-0.1%). Data showed eurozone inflation slowed more than forecast in May, putting more pressure on ECB to further ease monetary measures with policy makers considering a 10-15 bps cut, which will push interest rates into negative. In the US, factory orders climbed 0.7% in Apr, above the 0.5% estimate, while auto sales saw strong growth in May with Chrysler, GM and Ford sales surging 3-17%. Phone, consumer staples and raw material companies dropped the most, while semiconductor stocks Applied Materials (+4.4%) and Broadcom (+3%), and automakers GM (+1.2%) and Ford (+0.7%) rose. Among stocks in focus, Hillshire Brands rallied 9.5% after chicken processor Pilgrim’s Pride (-2.2%) raised its bid to US$55 per share from US$45, topping the counter-offer of US$50 by Tyson Foods (-3%). Discount retailer Dollar General rose 3.9% on plans for a US$1.1b share buyback. S’pore shares are likely to see subdued trading following the mixed session on Wall Street and dearth of corporate news. The STI is expected to open relatively flat, with topside resistance at 3,320 and immediate support at 3,285. Stocks to watch: *GLP: Signed three new leases totaling 44,000 sqm to a third-party logistics provider at GLP Park Yantian in Shenzhen (20,000 sqm), a global electronics manufacturer at GLP Park Waigaoqiao in Shanghai (13,000 sqm) and one of China’s largest IT service providers at GLP Park Daxing in Beijing (11,000 sqm). *Ley Choon: Awarded a $38.2m Sri Lankan government to rehabilitate 10km and assess another 125km of sewer lines in Colombo, with delivery scheduled in 30 months. The latest contract will boost its order book to $181m. *Frasers Centrepoint: Submitted a non-binding conditional proposal to acquire up to 100% stake in ASX-listed Australand Property for up to A$2.6b ($3b), via an off-market takeover offer at A$4.48/unit. The move will help the group deepen its roots and accelerate growth in Australia. *Asiatravel: Reportedly in talks with two Chinese giants- a leading online travel firm and an e-commerce heavyweight, which may lead to a potential takeover offer. *SingTel: Reportedly in talks to buy a US online marketing analytics technology firm, Kontera Technologies, for $160m. *Enviro-Hub: Disposing 80.3% owned HCG Environment, which owns a property in Tuas, for $11m but will receive only $2m after netting off all outstanding debts and liabilities. Group will book a net gain of $2.4m, raising its NTA/share to $6.9¢ from 7.1¢. *SP Windsor: Gave notice to SGX of its three consecutive years’ of pretax losses. Market cap was $58m as of last close. *Communication Design: Proposed placement of up to 87.2m new shares (50% of share capital) @ $0.10 each to meet the 10% free float requirement. This follows its cash offer by LPW Investments, which closed on 21 Apr 2014. Net proceeds of $8.4m will be used for potential acquisitions (90%) and general working capital (10%). *Jubilee Industries: Terminated non-binding MOU for the proposed acquisition of Tenderside Ventures, after being unable to reach a consensus on some of the principal commercial terms. *Asia Fashion: Terminated the purchase agreement of China Construction Material, after being unable to complete the proposed acquisition within a reasonable time. *China Essence, HL Global: Placed ion SGX Watch-List with effect from 4 Jun.