SG Market (19 Jun 14)

US Market: US shares went on a tear, sending S&P 500 to an all-time high as the Fed stayed on course with its accommodative monetary policy, while guiding for a modest pick-up in economic growth and interest rates. The DJIA gained 98 pts to 16,907 (+0.6%), while the S&P 500 climbed 15 pts to 1,957 (+0.8%) and the Nasdaq jumped 26 pts to a 14-year high of 4,363 (+0.6%). The VIX Index or Wal Street’s fear gauge dropped 12% to 10.61, its lowest level since 2007. Markets took a lift after the Fed left benchmark fed funds rate unchanged at 0-0.25%, lowered its long term interest rate estimate, and expressed confidence that the recovery is on track despite cutting its 2014 economic growth forecast to 2.1-2.3% from an earlier projection of 2.8-3%. Fed Chair Janet Yellen also downplayed a pick-up in inflation as any sign to tighten monetary policy and argued that the the improving unemployement rate remains elevated. As widely expected, the Fed kept to its plans to wind down its stimulus program and scaled back its bond purchase for the 5th straight month to US$35b. The utilities sector (+2.2%) outperformed, pushing its ytd gain to 14.1%; while consumer staples (+1.2%) and health care (+0.8%) also finished ahead of the broader market. Among stocks in focus, FedEx surged 6.2% as its 4Q earnings beat estimates on higher shipping volumes and reduced operating expenses, while Amazon advanced 2.7% after unveiling a new smartphone to challenge the dominance of Apple and Samsung. Software company Adobe jumped 8.2% as 2Q reveneue exceeded forecast and earnings rose on higher subscription to its cloud service. S’pore shares are likely to open higher with near term objective at 3,287 (20-day MA). But upside may be capped as short term technical picture has turned bearish with Stochastic, RSI and MACD indicators heading south. Topside resistance remains at 3,320. Stocks to watch: *United Engineers: Two candidates – Swire Pacific and the Al-Futtaim group –tipped to be in the running to make a bid for UE’s Wearnes automotive business, valued at ~US$300m. Any deal however, is unlikely to materialize before 4Q14. *Tigerair: 36% owned Indonesian associate, Tigerair Mandala will cease operations from 1 Jul. The move follows failed sale talks with AirAsia and Citilink, and leaves the loos-making budget carrier with two remaining units - Tigerair Singapore (100%) and Tigerair Australia (40%). *Halcyon Agri: Reportedly in talks to buy rubber processing plants in Indonesia from Lee Rubber for $400-500m. Group currently owns and operates three natural rubber processing factories in Indonesia and two plants in Malaysia, has been seeking to acquire rubber processing assets to fuel its expansion, and take advantage of a weak rubber market. *GLP: Signed new lease agreements in China totalling 47,000 sqm with three companies - Walmart, JD.com and one of the world’s largest health and beauty retail chains. *Addvalue: Previewing its Wideye iSavi at this year’s CommunicAsia trade show in Singapore. iSavi extends portable device connectivity by allowing for a much faster data rate transfer compared to similar products offered by other mobile satellite service providers. *Anwell Technologies: Updates that the investigation conducted by public security officials on the group’s subsidiaries remain on-going. The company executives are still detained and under arrest, but no charges have been made against them yet. *Far East Orchard: CEO Lucas Chow to retire on 1 Sep 2014. Chow will be succeeded by Lui Chong Chee, ex-CFO of CapitaLand. *Hotel Royal: Completion of proposed acquisition of Burasari Resort in Phuket delayed to 2 Jul from 30 Jun.