SG Market (09 Oct 14)

US Market: US stocks scored its best gain for the year after the latest FOMC miniutes revealed the central bank remained cautious about rushing into rate hikes in the face of a strengthening USD and a slowing global economy. The blue-chip DJIA jumped 275 pts to 16,994 (+1.6%), while the broad-based S&P 500 gained 34 pts to 1,969 (+1.8%) and the tech-heavy Nasdaq Composite soared 83 pts to 4,469 (+1.9%). This marked the fifth session over the past 10 trading days that the S&P 500 have gyrated by more than 1%. Accordingly, the CBOE Volatility Index sank 12% to 15.11, the biggest drop since Jul. Minutes from the latest FOMC meeting showed growing concerns among policy makers that a global slowdown in Europe, China and Japan and stronger USD poses potential risks on the outlook of the US economy. Separately, oil prices tumbled after stockpiles climbed 5m barrels to 361.7m barrels, adding to concerns of a supply glut and slowing demand. US crude plunged to a 17-month low, while Brent oil slid into a bear market, having fallen by about 21% from its Jun peak. Gains were borad-based with all industry groups ending higher, led by sectors tied to economic growth. Financial stocks rose 1.8%, including JPMorgan (+1.9%), Citigroup (2.5%), Wells Fargo (+2.1%) and Goldman Sachs (+1.6%). Tech stocks rallied 2% with Intel (+2.4%), Microsoft (+2.8%), eBay (+2.9%) and Apple (+2.1%) all advancing. Aluminium producer Aloca (+0.8%) kicked off the earnings season with 3Q earnings that beat estimates, while agriculture seed giant Monsanto (+1.9%) and warehouse chain Costco Wholesale (+2.8%) both gained on better profits. Comcast climbed 2.9% after shareholders approved the acquisition of Time Warner (+3.2%). On the downside, Sears Holdings lost 4.8% on possible reduced insurance coverage, prompting at least one supplier to halt shipments to the department store chain, while JC Penney tumbled 10.9% after cutting its sales growth outlook for 3Q. Airline stocks (-2%) continued to be weighed by worries of the spread of the Ebola virus. Volume was heavy with 8.4b shares traded on US exchanges with advancing issues overwhelming declining ones by 4.1 to 1 on the NYSE and 2.5 to 1 on the Nasdaq. S’pore shares are react positively to the rebound on Wall Street following dovish comments by the Fed which reaffirmed that low interest rates are likely to stay a while longer than anticipated. The STI is also near its key support at the 200-day moving average at 3,220 and is poised to for a technical uplift from oversold levels. Immediate resistance is seen at 3,260 for now. Stocks to watch: *GLP: Signed a strategic partnership agreement with China Development Bank Capital, to become its major partner for logistics infrastructure development. This will enhance GLP’s access to land and financing resources in China. *Raffles Education: Intends to spin off its wholly-owned subsidiary, Oriental University City, on the Growth Enterprise Market in Hong Kong. *Mapletree Logistics Trust (MLT): Acquired two logistics parks in China from its sponsor, Mapletree Investments, for Rmb402.8m ($83.9m). Both purchases are expected to be DPU accretive, with the Shanghai property and Zhengzhou property offering an NPI yield of 7.5% and 8.0%, respectively. The acquisition will be funded by debt, raising MLT’s total leverage ratio to 35.2%. *Global Yellow Pages (GYP): Marks foray into real estate with proposed acquisition of Pakuranga Plaza for NZ$96m ($96.3m), a freehold commercial property with 29,541 sm gross lettable area located in Auckland, New Zealand. The property has a net rental yield of 8.1%, and 97% occupancy rate. Post-acquisition, GYP’s proforma FYMar14 EPS will improve 60% to 1.41¢. *Ryobi Kiso: Secured additional new contracts worth $130.4m for the provision of foundation and geo-services in 16 construction projects, bringing total year-to-date orders to $179.2m. *Sino Grandness: Bondholders representing 80.5% of the principal amount of the convertible bonds (CBs) intend to extend the maturity date from 19 Oct ’14 to 30 Jun ’15. The group is in the process of repurchasing the remaining 19.5% of the principal amount of the CBs for Rmb37.9m. As such, the total outstanding principal amount of CBs remaining will be Rmb80.5m. *Asiatic Group: The associated company of its indirect subsidiary, Maju Intan Biomass Energy has received approval from the Malaysian authorities to charge a feed-in tariff rate of 29.70cent/lWh for the next 16 years from 27 Aug ‘14. The plant is designed with capacity of 12.5MW generation that will export electricity up to 10MW to the national grid, with the rest for the plant’s own use. *OSIM: Replies to SGX query that it is not aware of reasons that might explain the recent trading activity, and there are currently no ongoing discussions regarding any JVs, M&As of any significant assets. Separately, OSIM bought back 650,000 shares from the open market at an average price of $2.326. *Eu Yan Sang: Clarifies that the sample provide by the family of the child who had allegedly consumed the Bo Ying Compound was tested to contain lead content of 16ppm, but another sample randomly purchased by the US health authorities was tested to contain lead content of 2.5ppm. The group has appointed US lawyers to liaise with the US health authorities to obtain more information. *Mermaid Maritime: Raised its stake in Subtech Saudi Arabia from 70% to 95% for US$0.25m. *PACC Offshore: The proposed acquisition by Grupo Pegaso of interests in PACC’s JVs in Mexico has been aborted. *Delong: Updates that its Executive Chairman and controlling shareholder, Ding Liguo remains in confidential discussions with various parties in relation to a possible transaction. *Fischer: Mandatory unconditional cash offer of $0.16 per share has been extended to 5:30pm, 23 Oct, with no intention for further extension.