SG Market (09 Jun 14)

US Market: US shares powered to new heights on Fri, capping its third weekly gains, on solid jobs expansion which pushed past pre-recession peaks for the first time in May and showed the US economy continuing to grow at a moderate rate. The DIJA rose 88 pts to 16,924 (+0.5%), while the S&P 500 added 9 pts to 1,949 (+0.5%) and the Nasdaq advanced 25 pts to 4,321 (+0.6%). The VIX Index, a measure of market volatility, fell 8.1% to 10.73, the lowest since Feb 2007. Investor confidence was boosted by the addition of 217,000 jobs in May, following a 282,000 gain in previous month, marking the first time jobs growth has topped 200,000 for four consecutive months since Jan 2000. The unemployment rate unexpectedly held at almost six-year low of 6.3%. Market gains were broad-based, led by industrial (+1%) and energy (+0.7%) shares, while healthcare and utilities companies retreated. General Electric rose 1.5% after declaring a US22¢ dividend. Other large moves came from oil services firm Schlumberger (+2%), automakers Ford (+2.4%) and General Motors (+1.6%) and drugmaker Pfizer (-1.1%). Among other stocks in focus, apparel retailer Gap rose 2.1% after reporting sales in May increased 1%, while car rental firm Hertz tumbled 9.1% after revealing that it needs to restate its 2011-13 financial results due to accounting errors and that quarterly earnings woud not meet estimates. S’pore shares are set to trade higher, possibly with the STI testing the topside resistance at 3,320, with next hurdle at 3,355 as Asian markets cheered positive data releases from China and Japan. Over the weekend, China posted a big jump in its May trade surplus, with exports rising 7%, while in Japan, revised 1Q GDP growth of 6.7% beat initial estimates of 5.9% and sent the benchmark Nikkei (+0.7%) to fresh three-month highs. South Korea’s Kopsi (+0.5%) also opened higher after a holiday last Fri. Support for the STI sits around the 20-day moving average at 3,275. Stocks to watch: *KLW: Secured four new contracts worth $10.2m to supply and install doors for S’pore’s residential (Parc Centros, D ‘Nest, FLO Residence) and commercial (China Cultural Centre) projects and a three-year supply contract for exports to UK worth US$34m. *Popuar Holdings: Collaborating with BBC Worldwide to license BBC’s brands and materials for its proposed English language learning centres in China and Hong Kong. Operations will commence in Shanghai and thereafter in Beijing and other major provinces in China. *GLP: Completed the first investment tranche of its landmark agreement with the Chinese consortium, which includes Bank of China, China Life and HOPU Funds and entails the subscription of US$1.48b new shares in wholly-owned GLP China, and 74.3m new GLP shares (1.5%) @ $2.755 apiece. The consortium is expected to pump the second tranche of up to US$875m into GLP China within the next six months. *XinRen Aluminium: Shareholders has given the green light for the group to raise its effective in its Xinjiang smelter from 21% to 51%. The Xinjiang plant has a current capacity of 400,000 tpa and plans to ramp up production to 800,100 tpa in FY14. On a proforma basis, the enlarged stake would have increased the group’s FY13 net profit by 68% to Rmb103.8m. *Sino Construction: Acquiring 51% stake in Signet Coking Coal Int’l for US$21m, via the issue of convertible promissory notes. Signet is currently working on four coal mining projects in South Africa. On a proforma basis, FY13 NTA would drop from 0.76¢ to 0.68¢, while loss per share would narrow from 2.72¢ to 2.4¢. *CapitaMalls Asia: Parent CapitaLand announced the compulsory acquisition of CMA after securing 97.1% control. The counter will be suspended from trading on 10 Jun. *Addvalue Technologies: Extended the proposed disposal of wholly-owned subsidiary, Addvalue Communications for $330m, as the buyer is still in the midst of obtaining necessary approvals from the Chinese Foreign Exchange Control Bureau to remit the initial deposit of 10%. *Federal Int’l: Successfully removed from SGX Watch-List, with effect from 9 Jun. *UMS: CEO Andy Luong disposed 10m shares at an average $0.69339 each on 5 Jun via the open market, lowering his stake from 25.8% to 22.9%.