SG Market (11 Sept 14)

Gains in Apple lifted technology shares, and supported a broader gain in the US market. The Nasdaq 100 recovered most of its previous days’ losses to close at 4,095 (+0.8%), and both the S&P500 and Dow closed higher as well, at 1995.69 (+0.4%) and 17,068.71 (+0.3%), respectively. Apple shares jumped 3.1%, the most since Apr, as investors gave the thumbs up for its new product launches, which include the new iPhone 6 series that come with bigger screens, a new range of complementary watches, and a groundbreaking e-payment technology. However, certain Chinese tech names were hit, after being targeted by short-sellers. Carsen Block of Muddy Waters fame, said his firm has built a “modest short” position on Shenzhen-based sport-gambling company, 500.com. The stock fell 8% to US$33.05. Separately, new-comer, Trinity Research said that 21Vianet “overstates its business and uses financings and acquisitions to inflate its growth”, and its shares are “probably worthless”. Shares of 21Vianet fell 8% overnight, extending a 20% slump in the previous day. Meanwhile, the energy sector was also weak, as crude fell below the US$92 mark on demand woes, and reports of large increases in refined product inventories. Oil majors and refiners were broadly lower. In Singapore, an MAS poll showed that economists have cut their 2014 growth forecast to 3.3%, citing a disappointing 2Q, down from the 3.8% previously forecast. This brings the estimates within the government’s forecast range of 2.5% to 3.5%. With lack of significant new macro and economic developments, expect Singapore shares to trade within its usual tight range. The 3,319 level offers strong support for the STI, while immediate gains may be capped at the 3,500 resistance. Stocks to watch: *Sembcorp Marine: Acquiring SSP Offshore’s entire business assets for US$21m. The target is a Houston-based company that specialises in the design and engineering of floating production and drilling solutions for the oil and gas industry, with a key asset being its flagship SSP Floater technology. *Sembcorp Marine: Investing $222m to build a new multi-functional steel fabrication facility at its Tuas integrated yard, with completion scheduled in 3Q15. SMM will also carry out Phase 2 development at the Tuas yard, at an estimated cost of $489m, with completion scheduled for 1Q17. The total investment of $711m will be funded through its recently announced $600m bond issue, under a $2b multicurrency debt programme. *Lian Beng: Confirms yesterday’s news regarding the sale of the former Midlink Plaza (currently being developed into a hotel) to the Nanshan Group for $270m. This compares with the carrying cost of the property of $146.4m and the building construction cost of $70m. Lian Beng had a 19% stake in the property, and stands to book an estimated $10m gain on completion of the sale. *OKP: and JV partner China Sonangol Land, launched Amber Skye @ 8 Amber Road yesterday. The freehold condominium offers one to four bedroom units and penthouse, with prices anticipated to be ~$1,800 psf, and expected TOP at end Jun ’17. *Pan-United: Acquired 60-year leasehold industrial land in Johor Bahru for RM10.6m ($4.2m). The group plans to spend an additional ~$50.7m to develop the property over the next two years, to build a manufacturing plant for ready-mixed concrete and slag, mainly for distribution into Singapore. *SIIC Environment: Its 75.5% subsidiary is acquiring 100% stakes in two water treatment companies in Dongguan, with total wastewater treatment design capacity of 60,000 tpd and 50,000 tpd, respectively. The aggregate consideration of Rmb166.6m is within the independent valuation range of Rmb151m and Rmb178m. *Giken Sakata: Completed a private placement of 80m new shares at $0.30 each, as well as the 53.7% stake acquisition in Cepu Sakti Energy, payable with cash ($25.2m) and issue of 76m new shares at $0.30 each. The series of corporate actions has expanded Giken’s share base by 50% to 472.6m shares. Recall, Cepu owns the rights to operate and produce oil from two oilfields in Central Java, Indonesia, with a total of 148 oil wells currently producing a minimum of 300 bpd of crude oil. *Linc Energy: Received regulatory approval for its application on underground coal gasification (UCG) research & development license from the Wyoming Department of Environmental Quality, allowing the company to operate the project in Wyoming’s Powder River Basin. *Global Yellow Pages: Completed the A$10m acquisition of intellectual property rights for Wendy's Supa Sundaes brand, as well as the commencement of the licence agreement with Asia Food Retail Group to use or sub-licence the brand in Australia and New Zealand, for a royalty fee based on the greater of a percentage of retail sales and a minimum annual fee. *See Hup Seng: Proposed a 1-for-2 issue of 304.2m 5-year renounceable bonus warrants with an exercise price of $0.20 for each new share. Assuming full exercise, net proceeds of $60.3m will be used for general corporate purposes, including refinancing of existing borrowings and financing of working capital, acquisition, investment and capital expenditure requirements. *MFS Tech: Entered into a definitive agreement to dispose its entire assets to Integrated Circuits for $124.2m or $0.19 per share.