SG Market (08 Sept 14)

US Market: US stocks ended higher on Fri, lifting the S&P 500 to a fresh record, on easing geopolitical tensions and after a weaker-than-expected jobs data led to hopes that the Fed will not rush to raise interest rates. The blue-chip DJIA advanced 68 pts to 17,138 (+0.4%), while the broad-based S&P 500 gained 10 pts to 2,008 (+0.5%), while the tech-heavy Nasdaq Composite added 21 pts to 4,583 (+0.5%). In Europe, a ceasefire between Ukranine government troops and pro-Russian separatists came into force but renewed fighting over the weakend threatened to disrupt the truce. The US economy created just 142,000 jobs in Aug, well below the over 200,000 monthly increases recorded in the first six months and short of the 223,000 forecast. The small payrolls gain supports Fed Chair Janet Yellen’s view that underutitlisation of labour resources still remains significant even as the unemployment rate fell again to 6.1%, and fuelled optimism that the central bank would hold back any near-term hike in interest rates. Utilies outperformed (+1.2%) as investors turned to dividend plays after bond yields fell in response to the jobs data. Power generator NRG Energy, Xcel Energy and PG&E Corp rallied more than 1.8%. Among other stocks in focus, Yahoo climbed 1% after 22% owned China-based Alibaba filed its US$21b IPO, while Apple gained 0.9% after announcing plans to add new security features to its iCloud service. Retailers lost ground as Michael Kors slid 4.5% after announcing a 5.7% stake sale by Sportswear Holdings, its biggest shareholder, and Gap declined 4.2% on poor same-store-sales figures in Aug. Drug store operator Walgreen rose 2.4%, extending a two-day ral;ly after its 4Q sales topped estimates. Discount store Dollar General fell 2.3% after Family Dollar (-1.2%) spurned its sweetened US$9.1b bid in favour of Dollar Tree’s (+1.1%) offer. About 5.2b shares were traded on US exchanges, 6% below the three-month average. S’pore shares are likely to consolidate within its 3,320-3,380 trading range on the STI as investors await fresh direction on where markets are heading, with technical indicators also showing no clear signals. Stocks to watch: *Straits Trading: Selling the Straits Trading Building to the Sun Venture Group for $450m, with the proceeds to be redeployed into potentially higher yielding real estate opportunities. Straits Trading expects to book a capital gain of $39m upon completion of the deal by end ’14. *SMRT: Entered into a 50/50 JV with London-based Hailo Network to operate the Hailo taxi booking app in Singapore. *Soilbuild Construction: Secured a $47.6m contract from Assisi Hospice to construct one block of a 6-storey health and medical care building with a basement carpark for its new hospice at Thomson Road. Expected project completion in 2Q16. Order book raised to $704m. *TEE Int’l: Secured $73m worth of new engineering contracts in Singapore, lifting order book to $493m. The new contracts include a contract from repeat customer Changi Airport Group, as well as a sub-contract from the People's Association for air-conditioning and mechanical ventilation works. *AVIC Int’l Maritime: 80% owned Deltamarin has been awarded a €3m contract from Bore Ltd for the supply and installation of an exhaust gas cleaning system (scrubber) on a Ro-Ro vessel. *Intraco: Completed the acquisition of a 70% stake in fire protection specialist KA Group, through the issue of 5m consideration shares at $0.63 each to the vendor. *Stamford Tyres: 1QFYApr15 net profit jumped 39% y/y to $0.6m, as slightly better gross margin, small profit contribution from associates (versus a small loss a year ago) and lower tax, were amplified by a low base effect. Revenue declined 3.7% to $75.2m due to lower export sales. *China Kunda: Malaysia property tycoon, Ang Kok Teong is acquiring a 50.6% stake in Kunda at $0.0729 per share (66% premium to last close). This will trigger a mandatory general offer for the rest of Kunda shares, once the deal’s pre-conditions are satisfied. *St James: Received approval in principle for the listing of new shares to Perennial Real Estate Holdings. An EGM will be held to seek shareholders' approval for the proposed $1.6b reverse takeover transaction. Controlling shareholders holding a combined 57% stake have undertaken to vote in favour of the resolutions. *SPH: Wholly-owned subsidiary ShareInvestor has acquired certain trademarks and other intellectual property rights of investor relations firm, Waterbrooks Consultants, and a 60% stake in Waterbrooks, for $0.9m. *Wilmar: Extended the scheme of arrangement for the acquisition of Goodman Fielder from 31 Dec ‘14 to 31 Mar ‘15, due to delay in approval by the government in China.