SG Market (29 Sept 14)

US Market: US shares rebounded from its biggest decline since Jul as corporate results from Nike and Micron topped estimates and the US economy grew at its fastest rate since 2011. The blue-chip DJIA jumped 167 pts to 17,113 (+1.0%), while the broad-based S&P 500 advanced 17 pts to 1,983 (+0.9%), climbing back above its 50-dma and the tech-heavy Nasdaq Composite added 45 pts to 4,512 (+1.0%). The CBOE Volatility Index retreated 5.1% to 14.85 after surging 23% last week. Stocks got a lift after data showed US GDP grew at a revised 4.6% in the 2Q versus the previous forecast of 4.2% as companies stepped up investment and households boosted spending. Separately, consumer confidence climbed to a 14-month high in Sep as the economic outlook improved. US Treasuries however eased after bond titan Bill Gross, who built Pimco into the world’s largest bond manager, resigned to join Janus Capital, sparking speculation that the fund could begin shifting away from US government debt. Janus soared 43% and 10Y bond yield rose 3bps to 2.54% on the news. All 10 S&P industry groups advanced with technology shares rebounding 1.2%, while energy shares rallied 1.3% after the US-led coalition expanded air strikes against IS positions in Syria. Nike leapt 12.2% to a record after its 1Q profit beat estimates as the 2014 Fifa World Cup boosted sales. Yahoo bolted 4.4% after investor Starboard Value called for it to explore a tie-up with online rival AOL (+3.7%) to unlock value, while Micron Technology advanced 6.7% after the chipmaker reported 4Q earnings that came in ahead of estimates and raised its outlook for the upcoming quarter. Meanwhile, Apple gained 2.9%, recovering from most of its losses on Thu, after it released a new patch for a software update that had caused glitches in its latest iPhones. Blackberry rose 4.7% after posting a narrower loss amid the release of its latest Passport smartphone. About 5.4b shares were traded on US exchanges, 12% below the three-month average with 70% of stocks traded on NYSE closing higher. S’pore shares may get a slight updrift from Wall Street but the violent democracy protests in Hong Kong may put a lid on investor sentiment with the STI likely to trade within the 3,320 resistance and recent 3,266 support. Stocks to watch: *Nam Cheong: Sold three AHTS vessels worth ~US$41m, bringing the group’s total orders in Sep to eight collectively worth ~US$126m. The vessels are scheduled for delivery in 2014 and 2015, and are expected to contribute positively to FY14 and FY15 financials. *Nam Cheong / Marco Polo Marine (MPM): Nam Cheong is investing ~US$30.7m for a 30% stake in the enlarged share base of Indonesia-listed PT Pelayaran Nasional Bina Buana Raya (BBR). The latter, an indirect subsidiary of MPM, owns and manages a fleet of OSVs, tugboats and barges. BBR will utilise part of the proceeds to purchase five small- and mid-sized OSVs from Nam Cheong for US$85m/ *Lum Chang: Bought out Standard Chartered Private Equity’s 49% stake in Kemensah, a Malaysian property developer, raising its stake in the latter to 100%. The total consideration of RM133.4m comprises RM38.3m cash and a loan assignment of RM95.1m. Post-acquisition, Lum Chang’s proforma FYJun14 EPS is expected to rise 11% to 7.47¢, while its NTA will fall 2.3% to $0.508. Net gearing will increase 9ppt to 54%. *JK Tech: Has successfully completed the acquisition of Caracol Petroleum, which owns a 46.8% working interest in the Mustang project in Alaska. Drilling for the Mustang #2 well is expected to commence shortly after mid-late Nov ’14. *Keppel Infrastructure Trust: To provide additional incineration capacity to the Senoko waste-to-energy plant for the National Environment Agency (NEA). The upgrades will take place between 3Q15 and 3Q16, and will raise the plant’s incineration capacity by 10%. *Ziwo: Spending Rmb160m on a 25% stake in Xisheng (Quanzhou) Investment, a main contractor for the infrastructure construction of Guanqiao Park in the Quanzhou Economic & Technology Development Zone. *China Kunda Technology: The agreement by Ang Kok Teong to acquire a 50.6% stake at $0.0729 per share has been terminated, as certain conditions were not fulfilled by the relevant deadline. Accordingly, the associated pre-conditional cash offer will not be made. *Sino Grandness: Has completed its internal group restructuring exercise. Separately, Sino Grandness has incorporated a new wholly-owned subsidiary, Grandness Anhui, with registered capital of HK$10m, to engage in preparation, processing and production projects of canned fruits and vegetables and snack food product, and (ii) food technology development. *Interra Resources: Completed development well CHK1192 as an oil producer and commenced drilling development well CHK1994. Both wells are located in the Chauk oilfield in Myanmar, in which Interra owns a 60% operating interest. *LionGold: Its stake in the Amayapampa gold project in Bolivia will be diluted from 100% to 10%, following an agreement with Silvermane Investments (owned by Awang Ahmad Sah) to subscribe for new shares worth an aggregate US$45m, over a period of time. *Fu Yu: Entered into a settlement agreement with former CEO Ho Kang Peng, in respect of existing and potential claims in connection with his previous employment with the group. The settlement has been accrued in the FY13 financials. *JB Foods: Trades ex-rights today. The group is undertaking a non-underwritten 1-for-2 rights issue at an issue price of $0.12 each.