SG Market (16 Jun 14)

US Market: US shares edged up last Fri, buoyed by positive news from the tech sector, although the major indices finished down for the week, dragged by ongoing unrest in Iraq, which pushed oil prices to a nine-month high. The DJIA gained 42 pts to 16,776 (+0.3%), while the S&P 500 advanced 6 pts to 1,936 (+0.3%) and the Nasdaq added 13 pts to 4,311 (+0.3%). The tech sector outperformed with bellwether Intel Corp (+6.5%) leading the charge, after raising its full-year revenue guidance, boosted by higher-than-expected demand for personal computers. The upbeat outlook propelled other tech stocks, including Microsoft (+1.3%), HP (+5%) and Applied Materials (+2.9%). Overall gains were however capped as investors kept close tabs on the growing violence in Iraq, which had drove oil prices to its highest since Sept '13. Sentiment was also weighed by economic news as wholesale prices unexpectedly fell in May, while consumer sentiment also slid this month. Among stocks in focus, OpenTable Inc surged 47.4% after online travel firm Priceline announced a US$2.6b acquisition of the restaurant booking site. The deal lifted other online agents Yelp (+13.6%) and Groupon (+3.9%). Express jumped 20.4% after Sycamore Partners expressed interest in the clothing chain, while Citigroup lost 1.4% after regulators sought a US$10b settlement claim for its probe into mortgage-backed bond sales during the 2008 financial crisis. S’pore shares are likely to begin the week on a mixed note following the tentaitive close on Wall Street and softer openings in Tokyo (-0.4%) and Seoul (-0.1%) with the STI tracking just above its 20-day moving average for the past two days and momentum indictors showing no clear signs of any significant directional moves. Immediate support for the index lies at 3285, with the next line of defence at 3,270, while topside resistance is tipped at 3,320. Stocks to watch: *QT Vascular: 1Q14 net loss widened 124% y/y to US$9.2m, although revenue surged 340% to US$2.8m on increased sales of its Chocolate balloon catheter. Gross profit improved to US$0.3m from a US$0.6m loss in 1Q13. But higher sales and marketing costs (+35%) from larger sales force and admin expenses (+327%) arising from IPO-related charges, coupled with fair value losses on financial instruments (US$2.4m) and FX loss (US$0.2m) ate into its bottomline. *Sim Lian: Awarded $87.8m contract by HDB for the construction of four blocks of flats, multi-storey carpark and other communal facilities in Sengkang, for completion in 27.5 months. *Oceanus: 1Q14 net loss from continuing operations shrank to Rmb19.1m from Rmb46.4m deficit a year-ago as abalone prices fell amid austerity measures imposed by the Chinese government. But FY13 results were restated with a wider loss of Rmb444.7m from Rmb265.3m after its auditor revalued its assets and withheld its opinion on the state of affairs at the company. *Ecowise: Near breakeven 2QFY14 results with net loss of $0.1m vs $0.3m net profit a year earlier as revenue dipped 2.8% y/y to $17.7m on lower export prices of rubber compound and lower retreaded tyre sales volumes in the resource recovery segment. Bottomline was further weighed by a rise in other charges at $0.3m mainly due to FX losses. *CityDev: 59% owned Millenium & Copthorne has completed the acquisition of a 34-storey building at the heart of Manhattan’s theatre district, containing the 480-Novotel New York Times Square hotel, a small amount of office and retail space and a penthouse apartment. *Q&M: Completed the purchase of of three shop units at Block 130 Jurong Gateway.