SG Market (07 Jul 14)

US markets were closed Friday for Independence Day. In the absence of significant negative news over the weekend, the “feel good” factor amongst investors may extend into this week as global indices continue to rally. In latest news, IMF chief Lagarde commented that global economic activity should strengthen in 2H14 and accelerate in 2015. However she noted that momentum could be weaker than expected, and hinted at a slight cut in the Fund’s growth forecasts. In Asia this morning, both Japan and Korea markets are traded roughly flat. The HSI futures up ~0.1%. Similarly, the S’pore market may open relatively unchanged. Nevertheless, as investors previously distracted by the World Cup start to stream back, we should see a recovery in trading volumes. Near term resistance for the STI is tipped at 3,285/3,310 with underlying support at 3,220. Stocks to watch: *OCBC: Offer to acquire Wing Hang Bank has turned unconditional after obtaining 50.4% control, and will remain open for acceptance until 29 Jul. *Vard: Acquired STX Canada Marine (STX CM), a marine engineering and design company, for NOK65m. STX CM will be combined with Vard Marine to accelerate its growth strategy in the US. *Rex Int’l: Its 5.35% owned North Energy has inked an agreement to farm-in a 10% stake in PL507 in the North Sea. PL507 has been spudded and North Energy sees a high probability of discovering hydrocarbons in the prospect. Separately, Rex’s 41% own HIREX JV has signed an option to acquire a 20% working interest the ~448 sq km concession VIC/P57, located in the northwest offshore oil-prolific Gippsland Basin, in exchange for use of its Rex Virtual Drilling technology to prospect. *Sinwa: Has incorporated its 49%-owned Sinwa (Thailand) to provide offshore support services ranging from the supply of provisions, stores and spares to logistics and agency support services. The group has identified and is in the process of negotiating several business opportunities. *TPV Technology: Says that it is in preliminary discussions with Sharp in relation to a potential cooperation for its LCD TV business in Europe. *Intraco: Acquiring a 70% stake in fire protection specialist KA Group for $16.6m ($3.15m payable in 5m new shares at $0.63/share and the balance in cash). *Hiap Hoe: Launched its 461-unit Marine Tower Melbourne waterfront project located in the Docklands region, over the week end. Prices range from A$400k for a one-bedroom apartment (41 sqm), to A$2m for a three-bedroom unit (168 sqm). *JES: Inked a sales and purchase agreement to acquire a 51% stake in SCIBOIS (previously framework agreement) for US$30m cash plus consideration shares representing 20% of JES’ enlarged share base. Recall, SCIBOIS owns an effective 75% stake in a license till May 2036 to harvest ~230,000ha of forest in Congo estimated to be worth >US$3b. The deal comes with a profit guarantee of US$170m over the four years from acquisition or promises the listing of SCIBOIS on a reputable stock exchange with a market cap of not less than US$450m. *Asia-Pacific Strategic Investments: To sell its core funeral services business for RM10.7m ($4.2m) cash to Executive Director Heng Aik Koon, as part of the terms of the reverse takeover involving Coeur Gold Armenia. The disposal is expected to result in a RM98.5m deficit over book value, and a RM189m disposal loss. *Wee Hur: Won the URA tender for the industrial site at Woodlands Avenue 12 (30 year lease term) for $76.9m.