SG Market (30 Sept 14)

US Market: US shares pared earlier losses but still ended lower ahead of a heavy week of economic data as the civil unrest in Hong Kong adding to geopolitical concerns. The blue-chip DJIA retreated 42 pts to 17,071 (-0.3%), while the broad-based S&P 500 lost 5 pts to 1,978 (-0.3%), hovering near its 50-dma and the tech-heavy Nasdaq Composite dipped 6 pts to 4,506 (-0.1%). The CBOE Volatility Index jumped 7.6% to 15.98, reflecting the market uncertainty, which swung between gains and losses the previous four days. Markets were unnerved by the massive street protests in Hong Kong, which are viewed with some alarm in the broader context of an economic slowdown in China. Casino companies with exposure in neighbouring Macau slumped, with Las Vegas Sands and Wynn Resorts losing 3%. The turmoil in Hong Kong added to the crises in other parts of the world where Ukraine endured its deadliest day since signing a ceasefire with pro-Russian militants, while the US and its allies continued their bombing raids on Islamic State positions in Syria. In economic data, US spending rebounded 0.5% in Aug, while personal income rose 0.3%, reviving concerns that the Fed may raise interest rates sooner than anticipated. But pending home sales dropped 1% in Aug after a 3.2% increase in Jul, weighing on homebuilders, KB Home (-2.4%) and PulteGroup (-0.8%). Consumer discretionary shares (-0.6%) were the hardest hit, with Ford tumbling 7.5% after the automaker lowered its full year profit forecast, attributing to possible losses in South America and Europe. Semiconductor stocks (+0.8%) were the best performers, led by Intel (+1.9%) on news that the tech giant is forming a partnership with Mitsubishi Electric to create next generation factory automation systems. Animated film studio DreamWorks soared 26% on reports that Japanese telecoms group SoftBank plans a US$3.4b takeover. Computer Sciences Corp jumped 5.3% on a leveraged buyout speculation. About 5.9b shares were traded on US exchanges, 4% above the three-month average with declining issues outnumbering advancing ones by 1.4 to 1 on the NYSE. S’pore shares are likely to stay in the doldrums the Wall Street’s yo-yo market direction and tensions in Hong Kong dampening investor sentiment. Expect the STI to continue trading with a downward bias within the 3,320-3,266 range. Stocks to watch: *OCBC: Completed the subscription of 207.5m new shares in Bank of Ningbo at Rmb8.45 per share (17% discount to the last close of Rmb10.22), raising its stake from 15.3% to 20% of the enlarged share base. Accordingly, Bank of Ningbo is now an associated company of OCBC. The total consideration of Rmb1.75b was funded by OCBC”s internal resources. *GLP: Signed new lease agreements totaling 43,000 sqm in China with JD.com and another leading third party logistics company in China *Noble: According to Bloomberg News, sovereign-wealth fund China Investment Corp (CIC) - Noble's second largest shareholder with 13.8% stake, is seeking to sell at least 165m shares (representing 2.4% of Noble’s share base) at between $1.32 and $1.35 apiece. *SGX: Exchanged traded Singapore Kilobar Gold Contract will be launched on 13 Oct (Mon). This is the first wholesale 25 kilobar gold contract to be offered globally. *Eu Yan Sang: The US FDA has warned consumers not to use Eu Yan Sang (Hong Kong)’s “Bo Ying compound”, due potential lead poisoning risk. The company maintains that the item complies with safety requirements set out by the HK Department of Health and has passed all required tests for safety, including lead content. The matter is currently being sorted out by Eu Yan Sang’s lawyers in the US. *Libra Group: Awarded a sub-contract worth $12.1m for the construction, supply, delivery and installation works for a four-storey office building for a shipyard at 15 Benoi Road. Work is expected to commence upon approval from BCA and expected to be completed in nine months. *Lian Beng / KOP / KSH: The consortium has completed the acquisition of a 92.8% stake in Prudential Tower. *Lifebrandz: Posted a FYJul14 net loss of $5.8m (FY13 profit: $0.4m), as revenue fell 14% to $21.9m due to the closure and revamp of operating outlets, slowdown in crowd traffic and increase in competition from other clubs within the vicinity. Bottom line was further dragged by an impairment loss on fixed assets and receivables. *Spackman: Subscribed to an additional 633,000 shares of Opus Pictures at KRW5,000 each, raising its interest in Opus from 93% to 99.7%. The balance is owned by an indirect wholly-owned subsidiary Spackman Equities. *Falcon Energy: Its indirect wholly-owned subsidiary has completed the acquisition of a 50% interest in Brunei company, Maritim Indah, for total consideration of B$62,500. The latter is engaged in the business of offshore oil & gas products and services, and vessel owning and chartering. *LionGold: Updates that it held an estimated 5.5m oz of gold in mineral resources and 0.8m oz of gold in ore reserves (as of 31 Mar ’14), through six gold mining assets. Including its 100% stake in Acadian Mining Corp (acquired Sep ’14) and stake in the Amayapampa gold project, LionGold’s net attributable gold resources stand at ~2.8m oz. *Blumont: Commenced legal proceedings against The Edge magazine and editor Benjamin Paul, in relation to a claim in libel for the publication of the article titled "Hunting For the Truth".