SG Market (11 Jun 14)

US Market: US stocks finished mixed, halting a four-day rally in an uneventful session as a dearth of economic data gave little impetus for investors to take on larger positions amid concerns over equity valuations. The DIJA eked out 2 pts to 16,946 (+0.02%), while the S&P 500 slipped 0.5 pt to 1,951 (+0.02%) and the Nasdaq added 2 pts to 4,338 (+0.04%). No top tier economic data were on tap although news that job openings rose to 4.46m in Apr, the most since Sep 2007, and wholesale inventories gained 1.1% did little to spur buying sentiment. Some market watchers were concerned about the low volatility, weak trading volumes and elevated valuations, which has pushed the S&P 500 to 16.5x projected earnings from 14.8x at start of Feb. The market is also modestly overbought, suggesting that a shallow pullback may be on the cards. Following several days of outperformance, industrial and small cap companies relinquished some gains, dropping 0.3% to lead the declines. Utilities stocks also lost their appeal (-0.3%) as the 10Y bond yields moved up 3bps to 2.64% Among key stocks in focus, online giant eBay fell 2.7% on news that the president of its PayPal payment unit would step down to join Facebook (+4.6%). Struggling retailer Radio Shack slumped 10.4% after reporting a US$98.3m 1Q loss on lower sales, while electronics retailer Best Buy gained 2.4% after raising its dividend payout. Electronics Arts added 2.3% after disclosing release dates for new games. In M&A news, Allergan fell 0.7% after rejecting a takeover bid from Valeant Pharmaceuticals (-0.9%). Tyson Foods slid 3.8%, capping its 6th day of losses after raising its offer for Hillshire Brands. Following the lacklustre performance on Wall Street, S’pore shares are expected to to open relatively flat, with STI locked within the tight 3285-3,320 trading range. Stocks to watch: *Vard: Confirmed contract with Solstad Offshore for the design and construction of a large offshore subsea construction vessel, which is the group’s largest single order to-date. The hull will be built in Romania, while outfitting will be in Norway with delivery scheduled for 2Q16. *Asiasons Capital: Acquired 10.7% of exhibition and events management firm EMS Holdings for US$2.1m (4.5x FY14 estimated EBITDA), via issue of 43.3m new shares (4.2% enlarged share capital) at $0.062 each. Proforma FY13 post-acquisition NTA will remain at 6.62¢, while loss per share will narrow from 9.46¢ to 9.07¢. *LCD Global: Substantial shareholder Koh Wee Seng acquired 5.7m shares at $0.2587/share on 9 Jun, raising his stake from 13.13% to 13.68%. This occurred in the midst of a voluntary conditional offer by controlling stakeholders Raymond and David Lum's offer of $0.17/share. *Chasen: Invested 30% in Amber Digital Solutions, allowing the Beijing company to offer its digital imaging services to museums and other cultural authorities in China, but rights to the technology will stay with Sino-Sin, which will market its services outside China. *Asia-Pacific Strategic: Businessman and potential shareholder George Richmond, highlights that the group will be used as a vehicle to acquire more gold and silver mines in Armenia and expand in other parts of the world. Richmond holds a 49% stake in GR Business Holdings (GRBH), which is selling Coeur Gold Armenia to APSI for $500m. GRBH will own 84.5% stake in APSI post RTO deal.