SG Market (08 Oct 14)

US shares dived, extending losses into a second session, as the IMF cut its global growth forecasts and investors worried about slowing economic growth in Europe. The DJIA dropped 273 pts to 16,719 (-1.6%), while the S&P 500 fell 30 pts to 1,935 (-1.5%). The Nasdaq slid 70 pts to 4,385 (-1.6%). Amid the risk-off environment, the Russell 2000 index of small cap companies retreated 1.7%, and the volatility index surged 13% to 17.43, the highest in seven months. Amongst stocks in focus, Amazon fell 1.6%, on news that EU officials were carrying out investigations that the online retailer had unfairly benefited from sweetheart tax deals in Luxembourg, while General Motors plunged 5.9% after Morgan Stanley cautioned investors that the group’s growth forecast was unrealistic. The major global stock indexes tumbled more than 1%, after the IMF trimmed its outlook for global growth in 2015 to 3.8%, from a Jul forecast of 4.0%, and expressed concern about a financial market correction as stocks reach “frothy” levels. In Europe, shares posted sharp losses, plunging to a seven week low, amplified by another round of disappointing data. German Aug industrial production fell 4% m/m, the most since Jan ’09. Factory orders plunged, and business confidence slipped to the most in one and a half years, while unemployment edged up for a second month, fuelling concerns that the eurozone’s largest economy is losing steam. The regional indices are mired in the red this morning, with the Nikkei down 1.5%, and the down 0.2%. Expect a similarly soft open for the Singapore market this morning, though some respite may be seen later in the day when the China market opens after a week-long holiday. Investors may also begin re-positioning ahead of tonight’s FOMC’s release of its Sep meeting minutes, and kick-off of the 3Q earnings season, beginning with Alcoa. The technical trading range for the STI remains within the 3,220 and 3,260 band. Stocks to watch: *Keppel Corp: Secured two contracts from repeat customers worth a total of $153m. The first contract is for the conversion of a Floating Production Storage and Offloading (FPSO) vessel for Bumi Armada, with completion scheduled in 2Q16. The second contract is to construct a submersible barge for the Royal Boskalis Westminster Group, with delivery slated for 2H15. *EMAS Offshore: The Singapore secondary listing will start trading today. Placement tranche of 39.5m shares was fully allotted and public offer of 9.1m shares was 126% subscribed. The stock closed at NOK4.89 ($0.97) in the Oslo exchange, a 20% discount to its Singapore offer price of $1.21. *Boustead Singapore: Awarded a contract exceeding ~$20m to design and build the Airbus Asia Training Centre to be located at Seletar Aerospace Park in Singapore. This will raise Boustead’s order book to over $315m. *Tat Hong: Exploring a possible spin-off of at least part of its tower crane rental business in the PRC via a listing on a reputable stock exchange. *Blue Sky Power: Subscribing for a 14.5% stake in the enlarged share capital of Shine Great, a subsidiary of HK-listed New Times Energy Corp, for Rmb30m. Thereafter, Blue Sky will purchase the remaining 85.5% stake in Shine Great in a two-step deal, for an aggregate consideration of HK$230m, payable via a mix of cash and convertible bonds. *Chasen: Acquiring the outstanding 49% stake in a factory at 6 Tuas Avenue 20 for $5.4m, payable via $0.4m cash and issue of new shares worth $5.0m. Post deal, Chasen’s BVPS will decrease by 1.4% to 17.7¢ and EPS will fall 5.1%to 0.94¢ due to an enlarged share base. *Grand Banks Yachts: To be removed from the SGX Watch-List wef 9 Oct. *Magnus Energy: Issued 5.6m new shares (0.3% of existing shares) at 0.9¢ each to Phillip Securities as repayment for a $50,000 loan. Separately, the auditor has issued a qualified opinion on the FYJun14 financial statements. *Texchem: SGX has granted an for extension of time for its delisting, giving the major shareholder time until 7 Apr ‘15 to make an exit offer proposal. *M Development: To provide a secured loan in multiple tranches up to an aggregate $7.5m to Visualedge, a private company involved in the trading of electronic products.