SG Market (27 Nov 14)

US Market: US stocks climbed to fresh all-time highs in a quiet session as investors digested a slew of mixed economic reports amid slumping oil prices ahead of the Thanksgiving holiday. The blue-chip DJIA edged up 13 pts to 17,828 (+0.07%), while the broad-based S&P 500 advanced 6 pts to 2,074 (+0.3%), and the tech-heavy Nasdaq Composite added 29 pts to 4,787 (+0.6%). In economic news, consumer confidence rose in Nov to its highest level in 7½ years, while consumer spending showed a modest 0.2% increase in Oct, along with personal income. There were conflicting signals in the housing market as sales of new homes ticked up 0.7% in Oct but pending home sales fell 1.1%. Separately, core durable goods orders, excluding aircraft, declined 1.3% in Oct, while Chicago PMI dropped steeper-than-expected to 66.2 in Nov from 66.2 the prior month. Meanwhile, weekly jobless claims spiked by 21,000 to 313,000, its highest since Sep. Markets saw big data and little action as much of the data was shrgged off as volatile and in some cases, backward looking. Technology shares rose 9% as a group, with Hewlett-Packard jumping 4.1% on speculation that margins may benefit from its restructuring plan to spin off its PC and printer operations after its 4Q earnings met expectations. Chipmakers also surged with Analog Devices gaining 5.5% aftr its 4Q profit and sales exceeded projections. Telecom companies also outperformed, led by AT&T (+0.9%) and CenturyLink (+2.2%). Energy stocks were the biggest losers as crude oil fell 0.5% to US$73.69 per barrel to reach its lowest level since Sep ’10. Drillers Diamond Offshore (-10.9%), Transocean (-8.1%) and Noble Corp (-5.1%) all tumbled, while Seadrill sank 22.8% after suspending its dividend, citing a significant deterioration in the demand for rigs. Among other stocks in focus, farm equipment maker Derre & Co slid 0.9% as its 2015 sales forecast trailed estimates, dragging rival Caterpillar 0.4% lower. Online retail gaint Amazon eased 0.4% after slashing the price of its Fire mobile phones for the second time in an effort to move sales. Volume was very thin with 4.9b shares traded on US exchanges, 26% below the three-month average as most traders took off early for the holiday season. Advancing issues outpaced declining ones by almost 2 to 1 on the NYSE. Bond prices rose, sending the 10Y Treasury yield down 3bps to 2.23%, while the US dollar fell for a second day, losing 0.2%. S’pore shares are likely to muddle along as investors await fresh catalysts ahead oof the outcome of OPEC’s meeting later today. Topside resistance for the STI remains capped at 3,360 with immediate support at 3,310. Stocks to watch: *Mermaid Maritime: Record FY14 net profit which surged 187% to US$45.2m, boosted by contribution from associate, Asia Offshore Drilling (US$31.1m) which commenced operations of two additional rigs. Revenue climbed 16% to US$313m, buoyed by subsea (+11%) and drilling (+18%) segments. Gross margin slipped 0.4 ppt to 18.4%. Order book dwindled to US$470m, from US$750m in Jan ‘14. Proposed final DPS of US$0.0047, with intention to declare an additional DPS of up to US$0.003 upon receiving income from its associate. BVPS at US$0.40. *Technics Oil & Gas: 4QFY14 net loss narrowed marginally to $8.4m from loss of $8.6m a year ago, despite a 160% y/y jump in revenue to $20.1m on higher contribution from subsidiaries. Bottom line was impacted by an impairment charge and share of losses in an associate, as well as higher admin expenses (+44%) arising from increased staff costs, and newly acquired and newly setup subsidiaries. BVPS at $0.296. *Forterra: Final offer price by Nan Fung Int’l at $2.25 per unit, raised from $1.85 initially. Offer closing date extended to 5 Jan ’15. *Fragrance: Acquiring a property in Perth, Australia, for total consideration of A$30m, following the exercise of an option. The property has a freehold tenure with a total land area of ~3,560 sqm, and is situated in the CBD area proximate to the renowned King Street precinct. *Silverlake Axis: Secured two new software upgrading contracts from existing customers totaling ~RM40m. *YuuZoo: Inked a partnership deal with Etisalat, the fastest growing telco network in Nigeria, which will target Etisalat’s 20m subscribers and bring YuuZoo’s social e-commerce model to the current US$500m e-commerce market. *Singapore Medical Group: MOU with Samsung Life & Science to set up a proposed 51/49 JV to engage in the aesthetics and dermatology businesses and distribution of dermatological and cosmeceutical products in Asean. The MOU is valid for 6 months. *Linc Energy: Detected oil shows in the Stuart Range formation at the Pata 1 exploration well in the Arckaringa Basin. Cutting samples have been dispatched for lab analysis with first results expected in 6-8 weeks. *Keppel DC REIT: Lodged its preliminary prospectus yesterday.