SG Market (05 Jun 14)

US Market: US shares edged up with modest gains that sent benchmark indices to its 16th record of the year amid mixed economic news a day ahead of the closely watched ECB meeting. The DJIA rose 15 pts to 16,738 (+0.1%), while the S&P 500 added 4 pts to 1,928 (+0.2%) and the Nasdaq advanced 18 pts to 4,252 (+0.4%), helped by Apple (+1.1%). Stocks opened in negative territory after US economic data showed a drop in private sector job creation to 179,000 in May, coming in lower than consensus estimates of 210,000 jobs, and a jump in Apr trade deficit to a two-year high. On the bright side, service industries accelerated in May at its fastest pace since Aug as orders picked up. Separately, the Fed’s Beige Book revealed increased economic activity in all districts last month as auto sales led household spending amid an improving labour market. Investors were also watching data from Europe before a ECB meeting, where policy makers are expected to unveil further stimulus measures with hopes for a rate cut. US solar companies were the biggest gainers, after US slapped duties of up to 35.2% on solar panels and other related products from China. In deal news, Protective Lift surged 18.1% after Japan’s Dai-ichi Life Insurance agreed to acquire the company for US$5.7b. Other insurers Prudential (+2.4%), Met Life (+3%) followed suit after regulators relaxed their capital rules. Drugstore chain Walgreens jumped 4.2% after reporting 6% rise in May sales. S’pore shares are likely drift lower with no major news to move the market. The STI is also losing upward momentum with the benchmark index breaking below its immediate support at 3,285. Further downside risk is at 3,270 (20-day MA) with topside resistance at 3,320. Stocks to watch: *Vard: Secured NOK800m contract for the design and construction of an offshore construction and anchor handling vessel for Rem Offshore, with delivery from Vard Brattvaag in Norway in 1Q16. *Midas: 32.5% owned JV Nanjing SR Puzhen Rail Transport Co has secured three metro train contracts in Suzhou, Hefei and Hangzhou worth Rmb3.5b for delivery between 2015 and 2017. The latest orders bring the total contracts won this year by NPRT to over Rmb4.5b. *Tritech: Awarded $6.1m LTA contract to provide instrumentation and monitoring services for the Orchard Boulevard to Orchard station section of the new Thomson MRT Line. The contract will commence in Jun and expected to be completed in Dec 2020. *Kian Ho Bearings/Tat Hong: Raffles United launched a mandatory unconditional cash offer @ $0.235/share, after acquiring Tat Hong's 31.3% stake via a married deal @ $0.22 and raising its shareholding to 52.7%. Raffles does not intend to revise the offer price and intends to carry on Kian Ho's existing business and maintain its listing status. *STATS ChipPAC: In a response to a SGX query following yesterday's 25.5% share price spike, group updated that there has been no material development since 16 May when it disclosed that a third party has expressed interest in the company with intention of a potential buyout. *Hiap Tong: Disclosed that from time to time, management would receive referrals to meet up with parties who are interested to invest in the Company. *CapitaMalls Asia: Parent CapitaLand has garnered 92.7% control of CMA following its revised takeover offer, The counter will thus be suspended from trading after the close of the offer on 9 Jun. *Rex Int’l: Jointly-controlled entity, Lime Petroleum Norway, acquired 5% stakes in two additional licences in Norway (PL591 and PL591B), both of which are operated by Tullow Oil Norge, which have detected promising prospects using Rex Virtual Drilling technology. Exploration drilling is expected to commence in the 1H15. Both licences are located in the Halten area of the Norwegian Sea, and have a gross mean unrisked potential of 184mmboe with an estimated 43% probability of success and a net mean risked of 16mmboe. *Asiasons Capital: Acquired remaining 30% stake in Hub Media Group for US$4.5m (7.5x EBITDA) via the issue of 117.7m new shares @ $0.048/share. Hub Media is a film content distributor with production capabilities. Proforma FY13 NTA will decline from 6.62¢ to 5.89¢, while loss per share will improve from 9.46¢ to 8.42¢.