SG Market (21 Aug 14)

US Market: US stocks mostly finished higher for a third day, shaking off a temporary dip that came after Fed minutes indicated that policy makers had talked about hiking interest rates sooner than anticipated in their last meeting. The DJIA rose 60 pts to 16,979 (+0.4%) while the S&P 500 gained 5 pts to 1,987, narrowly missing its record high but the Nasdaq Composite slipped 1 pt to 4,526 (-0.02%). The minutes of the Fed meeting on Jul 20-30, showed saw Fed officials agreeing that the labour market is tightening but officials were divided on the speed of job gains and the timing of the Fed’s plan to raise interest rates amid low inflation. With the minutes out, investors turned their attention to the annual summit of central bankers in Jackson Hole where Fed chair Janet Yellen is expected to acknowledge that while economic data has generally been encouraging, there are still significant slack in the labour market. Retailers continued to outperform, with sentiment supported by an uptick on consumer spending. Retailer Target climbed 1.8%, despite trimming its 2014 profit forecast, citing a pickup in US sales last quarter, while Lowe advanced 1.6% after reporting a 10.4% rise in 2Q earnings. Rival home improvement retailer Home Depot also rose 2.9%. Among other stocks in focus, BofA was up 0.5% on reports that the bank was close to a US$17b settlement deal with the US Justice Department with regards to charges linked to mortgage-linked securities. Meanwhile, teen fashion house American Eagle Outfitters surged 12% after its earnings beat estimates. On the losing end, office supply chain Staples declined 2.6% on plans to shut down 140 stores this year as it fights online competition. Hertz slumped 3.9% after guiding that its full year results will miss the low end of forecast. About 4.9b shares were traded on the US exchanges, 14% below the three-month average. S’pore shares are likely to stay on the upward path tracking the strength of Wall Street. A sustained break of the 3,320 resistance would put the STI on the road towards the next objective at 3,388. Underlying support remains at 3,280. Stocks to watch: *SIA: 100% owned Scoot has formalized its 43.75% stake in a joint venture with Thai-based carrier Nok Airlines. The JVC, to be renamed NokScoot, has acquired Pete Air, which holds an air operator's licence. *SPH: Acquires 22% stake in MindChamps Preschool, which operates and franchises early childhood curriculum and enrichment programmes, for $12m. *Fischer Tech: CEO Tan Choon King and Chairman Foo Meng Tong make a privatization offer of $0.16 per share, after acquiring a combined 51.26% stake via off-market trades through their investment vehicle Harmony Holdings. Harmony does not intend to revise the offer price. *Tiong Woon: FY14 net profit jumped 25% to $22.1m, mainly lifted by a $3.2m gain from the disposal of its loss-making fabrication segment. Revenue dropped 18% to $165.3m as a result of a fall in contributions across all four segments - heavy lift and haulage (-8%), marine transportation (-10%), engineering services (-73%) and trading (-38%). Gross margin improved 5 ppts to 34% through better cost control. Final DPS of 0.4¢ maintained. *Lantovision: 4QFY14 net profit rose 29.6% y/y to $3.1m, taking FY14 net profit to $13.9m (+52.5%). Revenue was up 20% to $40.3m, benefitting from more installation projects in Malaysia, China, and the Philippines. Gross margin narrowed to 26.4% from 31.2% mainly due to higher costs incurred by a sizeable project, and reclassification of direct cost of trading activities. *Ezion: Commonwealth Bank of Australia has emerged as a substantial shareholder with a 5.13% stake following the purchase of 3.8m shares for its client funds. *TT International: Chairman and CEO, Sng Sze Hiang increased his total stake from 36.23% to 36.27%, via a married deal of 385,406 shares at an average purchase price of $0.161. *S’pore Windsor: Proposed disposal of its land and factories in Kunshan, China to the Redevelopment Office of Zhangpu Town for Rmb42.6m. The group intends to relocate the existing PCB moulding and punching operations to leased premises in Jiangsu province. transaction will monetizes the value of the factories and raise its proforma FY14 NTA/share to HK$0.9251 (14.93¢) from HK$0.6969 (11.24¢). *Pteris Global: Completed the RTO of Shengzhen CIMC-Tianda Airport Support, transforming the group's business into design, development, manufacture, installation and maintenance of passenger boarding bridges, ground support equipment and baggage handling systems, with a businesses network covering 40 countries and regions. *Giken Sakata: Extended its long-stop date for the proposed acquisition of Cepu Sakti Energy from 31 Aug to 30 Sep.