SG Market (12 Sept 14)

US shares rebounded from earlier losses to close mixed, as energy and financial stocks led the recovery. The DJIA fell 20 pts to 17,049 (-0.1%), while the S&P500 was up 2 pts to 1,997 and the Nasdaq advanced 5 pts to 4,592 (+0.1%). Stocks initially opened lower as US jobless claims unexpectedly rose by 11,000 to 315,000, adding on to the second dismal jobs data within a week. Energy related stocks however led the rebound after oil prices recovered from an eight month low, rising 0.1% as a group, with traders guiding that new sanctions against Russia could crimp oil supplies. Financials were also amongst the outperformers, with JP Morgan up 0.9% and BofA gaining 1.3%, after some investors highlighted that valuations for the banks were still reasonable. Healthcare stocks were however amongst the biggest losers, slipping 0.3% as a group, as investors took profit on the “best performing sector” for 2014. Celgene Corp declined 2.3% to pace declines in the sector. Among other stocks in focus, Lululemon surged 14% after the yogawear maker reported 2Q earnings which exceeded analyst estimates and increased its earnings forecast going forward, while JDS Uniphase Corp jumped 10% after announcing plans to split into two separate publicly traded entities. With a lack of significant new macro and economic developments, expect Singapore shares to trade within its usual tight range. The 3,320 level offers strong support for the STI, while immediate gains may be capped at the 3,360 resistance. Stocks to watch: *Low Keng Huat: 1HFY15 net profit fell 40% to $18.5m, while revenue rose 43% to $50.9m, mainly due to contribution from construction revenue (+67.5% to $28m), led by construction activity at Genting Hotel in Jurong Town Hall Road, offset by lower revenue from the Hotel & F&B business (-11.9% to $22.7m) as a result of lower occupancy rates. Gross margins increased 12ppt to 34.7%, while bottom line was weighed by a 43.7% decrease in associate and JV contributions to $14.8m. *Viva Industrial Trust: Proposed to acquire Jackson Square and Jackson Design Hub in Singapore for $80m and $31.5m, respectively. With 418,586 sf gfa, Jackson Square comprises four blocks of light industrial buildings, while Jackson Design Hub is a five-storey modern light industrial building with is 85,070.3 sf gfa. Proforma FY13 DPS and BVPS is expected to improve to 1.2¢ (+11%) and $0.76 (+1.3%) respectively. *Cortina Holdings: Granted an option to HCC Holdings to purchase the unit at 1 Coleman Street for $4.1m, ~5-8% below market valuation but 20% premium to book value as at 30th Jun ‘14. BVPS is expected to increase from 84.9¢ to 85.2¢ post-disposal. *Kingsmen Creative: To purchase a plot of land in Kulaijaya, Johor from Fuji Offset Plates Manufacturing at RM35m. The move will allow Kingsmen to continue operating in the property and better manage expansion plans. *Debao Property: Successfully tendered for 2 plots of land in Foshan, Guangdong, for Rmb935m. The acquisition is in line with the company's expansion plans and will be financed through internal and external sources of funds. *Pteris Global: Last day of trading on board lots counter.