SG Market (08 Jul 14)

US shares ended lower, after returning from an extended week end, though the Dow managed to hold the 17,000 line. The DJIA fell 44 pts to 17,024 (-0.3%), while the S&P 500 dipped 8 pts to 1,978 (-0.4%) and the Nasdaq declined 34 pts to 4,452 (-0.8%). Goldman Sachs has joined an increasing number of Wall Street firms that have brought forward their forecast for the Fed to raise rates, following the stronger-than-expected jobs report last week. Coupled with a five-week rally that has pushed valuations to a four-year high, this led investors to shy away from stocks. The small cap names and US-traded Chinese stocks were hit the hardest, suggesting a turn away from risk in the near term. In the region this morning, the Nikkei is down 0.9%, while the Kospi is barely holding up at +0.1%. Taking cue from Wall Street, the S’pore market could open lower. Underlying support for the STI tipped at 3,220 and near term resistance at 3,310. Stocks to watch: *ComfortDelgro / SMRT / SBS Transit: May benefit from the government’s support to implement a viable contracting model for buses. *Keppel Land: Acquiring an additional 43% effective stake in Phases 2 & 3 of The Estella residential development in Vietnam from JV partner Tien Phuoc, for US$11.5m, to raise its participation to 98%. *Hotel Grand Central: Granted approval from the New Zealand government to redevelop the site of the previous Hotel Grand Chancellor in Christchurch. The govt will lease ~62% of the NLA of the est. 12,594 sqm of office space, for an initial term of 12 years at ~5.7% gross rental yield, based on the est. construction cost of NZ$75m. The project is expected to take 24 months to complete. *Tat Hong: Selling five properties in Australia under a sale-and-leaseback transaction, for A$30m cash. Tat Hong expects interest cost savings of ~A$1.7m p.a. Separately, Tat Hong is divesting its entire 70% interest in Hup Hin Transport, which provides lorry transport and mobile crane rental, for cash of $20.6m, back to the Woon family. *Sincap: In discussions and commencing due diligence to acquire a real estate property within Australia. *Innopac: Reversed into a $2.5m net loss in 1QFY14, from a profit of $5.0m a year ago, due to investment trading losses. Revenue plunged 97% y/y to a negligible $0.1m, due to virtually no sales of marketable securities during the quarter. *Q&M Dental: Signs letter of intent with Baihe Stomatology Hospital for mutual cooperation regarding dental technology and techniques, improving customer service, and understanding the market conditions in China and S’pore. *C&G Environmental Protection: Requested for time extension to reply to the queries from the China Securities Regulatory Commission (CSRC) in relation to its proposed sale of its waste-to-energy business and assets to Grandblue Environment, as regulatory approval is still pending. *Kori: Completed the acquisition of 51% shares of Fuchiang Construction, which it has previously engaged as a sub-contractor. *ASJ Holdings: Suspended from trading wef yesterday’s close. The takeover offer by Ralec Electronic Corp at $0.065/share has closed with 95.09% acceptances, and the offeror intends to exercise its right to compulsorily acquire all the remaining shares. *GKE Corp: Profit warning. Expects net loss for FY14 due to finance costs, bank charges, and legal fees incurred for new acquisitions.