SG Market (18 Jun 14)

US Market: US shares extended a two-day advance as higher inflation lifted financial stocks and high growth tech names attracted renewed interest ahead of a Fed policy statement amid continuing violence in Iraq. The DJIA gained 27 pts to 16,808 (+0.2%), while the S&P 500 added 4 pts to 1,942 (+0.2%) and the Nasdaq jumped 16 pts to 4,337 (+0.4%). Fighting in Iraq continued to weigh on sentiment as insurgent forces approached Baghdad, while the US considered military options. Market participants are worried over the Mid-East situation and its potential impact on oil prices. Investors focused on mixed economic data pointing to higher inflation, which saw CPI rising 0.4% in May, ahead of estimates of 0.2%, prompting fears that the Fed may tighten monetary policy sooner than what markets are expecting. But housing starts declined more than expected by 6.5%. The Fed began its two-day policy meeting today where many believe the central bank will trim its mothly bond purchases by another US$10b to US$35m but all eyes will be on the new set of forecasts on unemployment, economic growth, inflation and interest rates. Financial stocks outperformed, after investment bank Jeffries reported better 2Q14 earnings, bossted by higher investment banking and trading revenues. The positive tone spilled over to the other banks including BofA (+2%), Goldman Sachs (+1.4%) and Morgan Stanley (+2.5%). Online brokers E*Trade (+7.7%), Charles Schwab (+5.5%) and TD Ameritrade (+4.7%) rallied as the Senate met for a hearing to examine whether high frequency trading hurts other investors. Among other stocks in focus, medical device maker Medtronic (+2.6%), video streaming service Netflix (+3.1%) and online travel site Expedia (+4.1%) all jumped following broker upgrades, while Edwards Lifesciences rose 4.6% after receiving approval for a heart device. S’pore shares are likely to remain weak after the STI broke through its immediate support at 3,285 with near term objective at 3,270. Short term technical picture has turned decidedly bearish as most momentum indictors head south. Topside resistance remains at 3,320. Stocks to watch: *GLP: Signed a new build-to-suit agreement for the 62,000 sqm GLP Yoshimi facility, with Japan Logistic Systems, a major third-party logistics provider in Japan and an existing GLP customer. Located in Greater Tokyo, the four-storey facility is expected to commence development in 2QFY15. *Ace Achieve: Clinched a Rmb48m IT project from China Unicom, to supply and install IBM storage devices and servers to the latter’s units in Beijing, Anhui and Xinjiang. The infrastructure project will be progressively completed over the next 18 months. *Tianjin Zhong Xin Pharma: Request to convert trading halt on SGX to voluntary suspension, on the back of its extended trading halt of its A-shares on the Shanghai Stock Exchange. The company is still in the midst of obtaining various PRC government approvals in relation to a proposed placement of new A-shares. *Raffles Education: Filings show the company has been buying back its shares since mid-May. *SIA: Will allow customers to pay for online ticket purchases in their currency of choice, beginning with the AUD, EUR, GBP, yen, SGD and USD, and with more currencies to be rolled out later in the year. SIA will lock in the exchange rate at time of payment. *CapitaCommercial Trust: As part of its capital management strategy, CCT has repurchased and cancelled $42m of the principal amount of 2.7% convertible bonds due 2015, reducing the outstanding principal amount of the bonds to $115.75m. *CapitaLand: Deputy CEO Olivier Lim to step down for personal reasons. *San Teh: Kao Chuan Chi will replace father Kao Shin Ping as CEO.