SG Market (21 Jul 14)

US Market: US shares rebounded from its worst drop since Apr as upbeat earnings from Google offset worries about the worsening crises in Ukraine and Gaza. The DJIA jumped 123 pts to 17,100 (+0.7%), while the S&P 500 leapt 20 pts to 1,978 (+1%) and the Nasdaq Composite surged 69 pts to 4,432 (+1.6%). The VIX or Wall Street’s fear gauge dropped 17% to 12.06 after rallying 32% the day before. Geopolitical concerns had a dampening effect on consumer sentiment this month, but the Conference Board’s index of leading indicators rose in Jun for the 5th straight month, suggesting that the economy continues to gain momentum following a 1Q slowdown. Broad-based gains were led by technology and healthcare names, particularly biotechnology companies. Many technology stocks rallied, including Apple (+1.4%), Amazon (+1.8%) and Facebook (+3%), all of which will report earnings this week. Investors also focused on strong earnings from Google (+3.7%), which beat estimates on more paid clicks, brushing aside implications of the MH17 plane crash in Ukraine and Israel’s invasion of Gaza. Airlines recovered following Thu’s 3.2% slide with American Airlines (+2.9%), Delta Air Lines (+1.7%), United Continental (+2.1%) and Boeing (+1.4%) all recovering some lost ground. General Electric slipped 0.6% its earnings matched estimates but AMD tumbled 16% after its 2Q profit missed and 3Q sales projection indicated that the chipmaker is not benefitting from the rebound in PC spending. The S’pore market may move higher, buoyed by the resilient Wall Street performance, with the STI breaking past its 3,210 resistance (last Fri’s close) to the next objective at 3,360. Downside support now lies at the 3,280 level. Stocks to watch: *Sembcorp Marine: Secured a ~$600m contract from France’s Saipem for the conversion of two VLCCs into two turret-moored FPSOs for the Kaombo project in offshore Angola. The VLCCs will enter Sembawang Shipyard in 3Q14 and 1Q15, respectively, with total project duration of 32 months. *OCBC: Dr Cheong Choong Kong will retire as Chairman on 31 Aug after an 11 year tenure, but will remain a director of OCBC and Great Eastern to provide continuity. He will be succeeded by Mr Ooi Sang Kuang, currently a non-executive lead independent director of the board. *Aspial / Fragrance: Launched City Gate, a JV mixed development project along Beach Road, over the week end. 78 out of the 150 residential units released were sold at a median price of more than $1,800 psf, and 62 out of the 155 commercial units released were sold at prices ranging from $2,900 to $6,200 psf. The project will have 311 apartments and 188 commercials in total. The site was purchased in Jun ’12 for ~$360m ($920 psf ppr). *Kingsmen: Awarded a $25.2m contract for the construction and maintenance of fit-out works for the KidZania indoor family edutainment centre located in Singapore. KidZania is part of a fast-growing global edutainment chain headquartered in Mexico City, and is slated to open at Sentosa Island’s Palawan Beach by 2015. *Ezion: Templeton Asset Management disposed 2.4m shares at an average price of $2.009 each on 15 Jul, paring its stake from 6.1% to 5.9%. *Artivision: Non-binding MOU with Lenovo to test and integrate its "Face-It" mobile application - an application that is able to secure the user’s device using face recognition technology. *Jubilee Industries / WE Holdings: Jubilee will acquire WE Components for US$8.4m ($10.4m) to boost its upstream electronic manufacturing business. Going forward, WE Holdings will focus on two key business units - coal & iron ore, and cement & oil. *Koyo Int’l: Its indirect subsidiary AVSC Technologies has secured a contract for the supply and delivery of ~170,000 mt of reclamation materials to a buyer for a period of two months ending Aug ’14. *Golden Agri: Partnering CEPSA to establish a 50/50 JV to jointly develop, formulate, produce, distribute and sell fatty alcohols globally. *Next-Generation Satellite Communications: Proposed $27.6m acquisition for 75%-stake in Star Chariot has lapsed, as several conditions in the sales and purchase agreement have not been fulfilled. Recall, the acquisition was intended to assist the group in exiting the SGX Watch-List. *Hyflux: Intends to launch a proposed offer and issue of SGD perpetual capital securities today. Credit Suisse has been appointed as the sole lead manager and bookrunner. *CNMC: Produced another record single gold pour of 2,586.75 oz of gold doré bars *Cacola: Proposed to issue 74.1m new shares at 2.7¢ each, to Liao Jienan to settle a three-month loan of $2.2m which expires 31 Aug. *Isetan: Profit warning. Expects 2Q14 loss due to the challenging situation at its flagship Scotts store where sales have been affected by major renovations by owners of Shaw House and the adjoining Shaw Centre.