SG Market (07 Oct 14)

A relatively choppy US session overnight, as shares swung from earlier gains of 0.5% to an intraday loss of up to 0.5%, before pulling back up to end the day slightly in the red. The DJIA closed 18 pts to 16,991 (-0.1%), while the S&P 500 declined 3 pts to 1,965 (-0.2%) and the Nasdaq was down 21 pts to 4,455 (-0.5%). Small cap shares resumed a sell-off, with the Russell 2000 index dropping 0.9%. Volume of 6.3b was below the 7.2b average for the last five trading sessions. Amid a lack of major economic data, investors remained on the side-lines, awaiting the release of the upcoming FOMC's minutes and start of the quarterly earnings season that begins with Alcoa on 8 Oct (Tue). Seven of the 10 main industries in the S&P 500 fell, with consumer-discretionary stocks leading the declines. However, there was some relief in the tech space, after H-P (+4.7%) announced that it would split its corporate hardware and services unit, and PC and printer business, into two separate listed companies. We are seeing a mixed morning session in the region today, with the Nikkei dipping 0.2% lower on a rebound in the yen, and the ASX 200 dropping 1.3% on further concerns about a weak currency. However, the Kospi is trading 0.5% higher. As such, a better read on the Singapore market after the Hong Kong market opens. Investors will be eyeing if yesterday’s sharp 1.1% rebound in the HSI to 23,315 will be extended, with pro-democracy activists scaling down their protests. Technically, the STI looks set to trade within its recent 3,220 and 3,260 range. Stocks to watch: *United Engineers (UEL)/ UE E&C: UEL is selling its 68.2% stake in UE E&C to private equity firm, Southern Capital Group, at $1.25 apiece. A voluntary conditional offer will be made for the remaining shares. Post disposal, UEL’s proforma FY13 NTA will rise 3.9% to $2.70/share. *SGX: Total securities traded value in Sep value rose 1% m/m to more than $21b, although average daily value dipped 4% m/m (-34% y/y). Derivatives volume hit 10.6m contracts (+13% m/m, +18% y/y). Equity index futures volume rose to 9.7m contracts (+12% m/m, +19% y/y). *Vard: Secured a new contract with repeat customer, Island Offshore for the construction of one offshore support vessel worth close to NOK300m. Delivery is scheduled in 1Q16. *Yongnam: Its Malaysia unit will sell and leaseback a property in Nusajaya, Johor to Axis REIT for RM153.5m, that could result in an estimated disposal gain of ~$34m. *HPL: Acquired a further 45% stake in Laem Ka Properties, which owns a 59.4-acre land in Phuket, for ~$3.5m, raising its total stake to 90%. *STATS ChipPAC: Issued writ of summons by ERS Electronic for a patent infringement in relation to debonder machines used in the wafer level package assembly process. The group has sought legal advice and is of the opinion that the claim is groundless and without merit. *Youyue: Received EGM approval to conduct new business in energy conservation services and sustainable development and change its name to “Green Build Technology”. The group will integrate Harbin Promlite Energy Saving Technology, which has been engaged by the government to install LED light bulbs along designated streets in Harbin City. *GKE: Expects 1QFY15 net loss due to higher acquisition-related finance cost and direct operating costs. *Fujian Zhenyun: Warned of material negative impact on its FY14 financials. Its subsidiary, Hebei Zhenyuan received a legal letter from customer China Ge Zhou Ba Group demanding refund of Rmb12.2m (4.8% of total sales) for piping products that failed to meet the necessary quality checks upon delivery to Iraq. *NH Ceramics: Extended the long stop date for the proposed acquisition of 100% of BlackGold Asia and BlackGold Energy by six months to 2 Apr ‘15.