SG Market (03 Jul 14)

While Europe markets closed higher, US stocks ended relatively flat, with positive data on private sector employment unable to excite investors ahead of the closely watched Jun payrolls report. The DJIA rose 20 pts to 16,976 (+0.1%) while the S&P500 inched up 1 pt to 1,975 (+0.1%) and the Nasdaq Composite gave up 1 pt to 4,458 (-0.02%). Volume was light with just 4.8b shares exchanging hands, below the month-to-date average of 6.2b. According to payrolls services provider ADP, US private employers added 281,000 workers in Jun, above estimates for 200,000, setting a positive tone for the much anticipated government payroll data due later tonight. Utility stocks underperformed, falling 2% as a group, for the biggest daily decline since May ’14, as the positive labor data spurred investors to speculate that the economy is improving and interest rates could rise sooner than later. Utility stocks are frequently favoured in a low interest rate environment due to their attractive dividend yields. Among other stocks in focus, JP Morgan fell 1% after announcing that its CEO Jamie Dimon has been diagnosed with early stage throat cancer, while Constellation Brands rose 2.3% after reporting a better than expected set of results. Expect a slight positive bias for the S’pore market this morning, on the back of broadly steady regional markets – ASX (+0.4%), Nikkei (+0.1%), Kospi (-0.3%). Near term resistance for the STI at 3,285, and support at 3,220. Stocks to watch: *Keppel Corp: Contract with Golar LNG to perform the world’s first-of-its type conversion of a Floating Liquefaction Vessel (FLNGV) has become effective, and is priced at US$735m. The project will span ~31 month and is expected to be completed in 1Q17. Golar has options to contract another two similar units from KEP. *Metro: Acquiring a 25% stake in Scarborough Real Estate, which holds two predominantly residential development land sites in Manchester, UK for £5.7m. Metro will further extend shareholder loans of up to £4.3m for a total investment of £10m, which will be funded primarily from internal resources. *Golden Agri: Collaborating with Louis Dreyfus Armateurs (LDA), an international maritime transportation and services specialist, to set up a 50/50 JV called Orchard Maritime Services, to provide maritime and logistics services in the domestic transportation of Golden Agri’s cargoes. *Wilmar: Together with Hong Kong partner First Pacific, have lowered their joint takeover bid for Goodman Fielder by 2.1% from their previous offer to A$0.675/share, citing concerns over the investments needed to turn around the ailing Australian bread and spreads maker. *GLP: Best Logistics, a leading third-party logistics company, will lease 27,000 sqm from GLP in Mid-western China, extending the partnership to 13 cities across the country. *Linc Energy: Commits to drill three new wells in the South Australian Arckaringa oil basin from late Jul, and may drill a further three wells by year end. The program will be funded within the company’s budget. The basin is estimated to contain potential for 103b bboe in recoverable oil and gas reserves. *Interra Resources: Long stop date for the acquisition of equity interest in PT Benakat Oil, PT Indelberg Indonesia, PT Bintang Sukses Nasional and PT Benakat Barat Petroleum has been is further extended to 2 Aug. *RH Energy: Received shareholder approval for the proposed reverse takeover of Chinese developer, Chiwayland. RH Energy shares will be suspended after today’s close; the counter targets to re-list as Chiwayland on 6 Aug. *InnoTek / Sabana REIT: InnoTek is disposing its investment of 15m units in Sabana REIT, which it acquired in 2010 at the IPO price of $1.05/unit. The share sale will be disposed over a period of time, and a financial institution has been appointed to invest the proceeds into other financial instruments including dividend stocks, bonds and different sectors of REITs. *SBI Offshore: To form a 70/30 JV with US oilfield equipment manufacturer Axon Energy Products, to market oil and gas drilling systems and solutions in Asia. *Hotel Royal: Completed the Thb1.3b ($50m) acquisition of the 186-room Burasari Resort in Phuket. *LionGold: Shares of its 77%-owned Signature Metals have been suspended from trading on ASX wef 1 Jul, due to the company not lodging its annual report within the required timeframe. *GMG Global: Profit warning. Expects to report 2Q14 loss due to decline in the average selling price of natural rubber. *United Envirotech: Has been approached by a potential investor with regard to the acquisition of shares of the company. *UIC: Parent UOL purchased 152,000 UIC shares at an average price of $3.35 each, bringing its total stake in UIC to 43.7%. *Yoma: Markit data shows short interest as a percentage of free float rising to 10% on 1 Jul, from 5.6% a month earlier.