SG Market (14 Oct 14)

US Market: US shares slumped to its worst three-day slide since Nov 2011 in late selloff on worries that global economic slowdown will dampen earnings, coupled with growing concerns over the spread of Ebola. The blue-chip DJIA tumbled 223 pts to 16,321 (-1.4%), a six-month low, while the broad-based S&P 500 sank 31 pts to 1,875 (-1.7%) and the tech-heavy Nasdaq Composite lost 63 pts to 4,214 (-1.5%). All the main benchmarks ended below the key 200-day moving average level. The CBOE Volatility Index, often viewed as a measure of market anxiety, spiked 16% to 24.64, the highest level since Jun 2012.. After a choppy session earlier, markets sold off in the last hour on a confluence of negative factors, including a widening Ebola scare, the potential impact of tepid global demand on corporate earnings, falling oil prices and a breakdown of technical support levels. This comes after the IMF cut its global growth forecast last week and warned that the Eurozone faces the risk of a recession. It also suggested that chances of equity losses in 2014 have increased and that stock valuations may be frothy. All industry groups were in the red with energy, commoditiy, healthcare and consumer sectors losing at least 2%. Airlines (-6.2%) suffered another bad day in the wake of a second Ebola infection in the US and news that an Emirates plane was detained in Boston to disembark five sick passengers. American Airlines (-7.2%), United Airlines (-7.3%) and Delta Air Lines (-6.1%) all dropped. Energy shares continued to languish as Brent crude slid 1.5% to US$88.89 a barrel, the lowest since Nov 2010, after Iraq said that it will sell oil to Asia at the biggest discount in almost six years. Among the decliners were Chevron (-1.6%), ConocPhillips (-3.3%) and Anadarko Petroleum (-3.5%). Freight rail company CSX surged 5.9% on reports that it was approached by Canadian Pacific Railway about a merger. Drugmaker Tekmira Pharmaceuticals, which has a drug used for Ebola treatment, climbed 3.9%. Volume was heavy with 8.7b shares traded on US exchanges, 44% higher than the three-month average. Declining issues overwhelmed advancing ones by 3.7 to 1 on the NYSE and 2.7 to 1 on the Nasdaq. Investors would likely turn their attention to 3Q results on Tue for the market direction, with JPMorgan, Citigroup, Wells Fargo and Johnson & Johnson scheduled to release their earnings. Other significant earnings due this week include Intel and Google. S’pore shares may be bracing for further selling pressure following the selldown on Wall Street and weaker-thn-expected 3Q14 GDP growth of 2.4% vs 2.6% estimates. Following the downward breach of its 200—dma at 3,220, the STI is expected to head towards the next support at 3,180. Stocks to watch: *Lian Beng: 1QFY15 net profit jumped 59% to $12.0m on revenue of $167.6m (+11%). The increase in revenue was led by higher revenue generated from the construction segment and workers' dormitory business after offsetting the decrease in revenue in ready-mixed concrete segment. Although gross margin dipped to 9.9% from 12.6%, bottom-line was buoyed by associate and JV contributions of $5.1m versus a loss of $3.6m from the previous year. *SPH REIT: 4QFY14 results above expectations. Distributable income and DPU of $34.9m and 1.39¢ both came 7% above IPO forecasts. Gross revenue and NPI beat by 2.6% and 5.6% to $51.1m and $38m respectively, on the back of positive rental reversion achieved by both Paragon (+10.5%) and The Clementi Mall (+5.5%). Portfolio is fully leased, with average lease expiry of 2.2 years by NLA. Aggregate leverage stood at 26%, with average debt term of 4 years and cost of 2.33%. NAV/unit of $0.93. *Keppel Land: To expand its 40% owned SM-KL project in the Ortigas CBD in Manila. The group intends to continue with Phase Two of its mixed-use development, comprising a 42-storey office building and an extension of The Podium, an existing five-storey retail component, with a total construction cost of $336m. *Viking Offshore: Its wholly-owned special purpose vehicle has proposed to issue up to $12.5m in principal amount of redeemable excahgneable bonds to Luminor Capital. The exchange price will be the lower of $0.175 or a 10% discount to the VWAP of Viking shares traded over the 30 trading days prior to date of exercise notice. The proceeds will be used to fund the purchase of the land rig from Beijing Forpetro Sino-Rig. *Gaylin: JV Gaylin Wire registered as a license holder with Petronas, for the supply and delivery of marine accessories, lifting and rigging equipment accessories. The license is valid for three years, expiring 16 Sep ’17, and is subject to renewal. *Manufacturing Integration Technology: Signed two contracts worth a total of Rmb26.4m for the delivery of laser scribers and laser ablation equipment to an existing solar customer by end 2014. *Asiasons Capital: Mutually agreed to terminated the agreement with Arts & Entertainment Investments to acquire the 10.7% stake in EMS Holdings, due to its inability to obtain the necessary consents and approvals from the relevant third parties. *Centurion: Executive director Lee Kerk Chong increased his stake from 3.749% to 3.794% via the purchase of 340,000 shares at an average price of $0.501 each. *Libra: Completed the placement of 15m new shares at $0.20 each.