SG Market (12 Jun 14)

US Market: US stocks retreated the most in three weeks on investor fatigue following the recent rally and a World Bank report trimming its 2014 global growth forecast. The DIJA shed 102 pts to 16,844 (-0.6%), while the S&P 500 dropped 7 pts to 1,944 (-0.4%) and the Nasdaq lost 6 pts to 4,332 (-0.1%). Sentiment took a hit after the World Bank cut its 2014 global forecast to 2.8% from its initial forecast of 3.2% due to the harsh US winter and impact of the Ukraine crisis and predicted slower growth for US, China, Russia, India and Brazil. But it left its 2015 estimate for world growth intact at 3.4%. Investors also turned cautious after the shock defeat of House Majority Leader Eric Cantor at a primary Republican election, sparking concerns on renewed budget fights. Cantor is also a staunch supporter of Wall Street. The selloff was broad-based with industrial and utility stocks losing at least 0.8% to pace declines. Airlines was among the top losers, with American Airlines (-3.1%), Delta Air Lines (-2.9%) and United Continental (-5.2%) all falling, following a profit warning from Germany’s Lufthansa. Among other stocks in focus, Boeing declined 2.3% on a broker downgrade citing limited catalysts following three years of record orders, while tech company Synaptics surged 29% after bumping up its quarterly revenue guidance. S’pore shares are likely to track the decline on Wall Street as football fans wind down their trading positions ahead of the start of the FIFA World Cup season, which has historically precipitated a weak spell for equity markets. The STI is expected to test the bottom-side of its 3285-3,320 trading range, with the next support at 3,270. Stocks to watch: *GLP: Leases out 23,000 sqm to two leading third-party logisitics providers in China, including Best Logistics, a strategic partner and one of GLP’s largest customers in China. *Tigerair: Improved operating performance in May as traffic (+17.2%) outpaced capacity growth (+16%), lifting passenger load factor to 84.9% (+0.9ppt). But Tigerair Singapore’s PLF dropped 5.6ppts to 78.4% as the 15.7% rise in passengers failed to keep track with capacity increase if 23.6%. *Tiong Seng: Formed a 44/51/5 JV with Japanese firms Geostr Corp (Nippon Steel & Sumitomo Metal) and Marubeni-Itochu Steel to set up and operate a $14.5m precast plant at its existing premises in Iskandar, Malaysia to manufacture and supply precast tunnel segment to the Singapore and Malaysian markets. *SingTel: Acquiring two US-based companies Adconoin Media and Kontera for a combined US$385m. Adconoin is a digital advertising group with operations primarily in US and Australia, while Kontera is a data analytical and marketing technology company with offices in US, UK and Israel. SingTel intends to cross sell services across the digital businesses to gain scale and solidify its position. *Halcyon Agri: Disclosed that it is in ongoing discussions with certain parties for a potential acquisition of assets and properties but no definitive agreements have been entered into. *Hwa Hong: 82% owned subsidiary, Capital Hatton is disposing its interests in two London properties at 12-16 Clerkenwell Road, London and 5-8 Sutton Street for £11m. The sale is expected to complete by 3Q14 and result in a pretax gain of ~£3.8m. *CCM: Proposed a change of company name to Singapore eDevelopment to reflect its expansion beyond construction business into property development and investments in equities, convertible securities, bonds and funds. *Blumont: Revised terms of its US$30m loan facility from Wintercrest Advisors to extend the maturity date to Mar ’15 from Jun ’14, raise the cost of funds and charge additional assets in favour of Wintercrest. *UMS: CEO Luong Andy continues to pare down stake from 21.99% to 20.25%, disposing 6m shares at average price of $0.6257 via open market transactions. *LCD Global: Emerging shareholder Koh Wee Seng purchased 2.7m shares at average price of $0.2636 on 10 Jun and 2.8m shares at $0.265 on 11 Jun, raising his stake from 13.68% to 14.2% over the two days.