SG Market (01 Dec 14)

US Market: US stocks ended most mixed in holiday-shortened on Fri as energy producers were slammed after OPEC decided not to cut production to alleviate a global supply glut, offsetting a rally in retailers. The blue-chip DJIA was flat at 17,828, while the broad-based S&P 500 dipped 5 pts to 2,068 (-0.25%), and the tech-heavy Nasdaq Composite edged up 4 pts to 4,792 (+0.1%). Crude oil extended a rout, dropping US$7.54 to a five-year low of US$66.15 a barrel as OPEC kept its ouput unchanged even after oil collapsed more than 35% since Jun. ExxonMobil, Chevron and ConocoPhillips lost 4.2%, 5.4% and 6.7% respectively, while oil services Halliburton (-10.9%). Transocean (-9.7%) and Baker Hughes (-8.9%) all plunged. It was particularly brutal for shale oil producers with QEP Resources and Newfield Exploration getting hammered more than 15%. The selloff rippled through the industrial sector, and sent Caterpillar tumbling 4.9%. On the flip side, airline stocks were boosted by prospects of lower fuel costs. United Continental soared 8.2%, American Airlines surged 7.9% and Delta Air Lines climbed 5.5%. Retailers were in the spotlight as stores opened for Black Fri sales and lower gasoline prices translated into higher disposable incomes for shoppers. Wal-Mart jumped 3%, JC Penny +3.4%, Target +2.6%, Macy’s +2.2%, Best Buy +1.7% and Amazon +1.5%. Analysts are projecting a 4.2% gain in holiday sales, its biggest increase since 2011. About 4.2b shares were traded on US exchanges. Declining issues outpaced advancing ones by 1.62 to 1 on the NYSE ans 2 to 1 on Nasdaq. S’pore shares are likely to struggle with most stocks in overbought territory as market participants look to economic forecasts from ECB and Japan, as well as China’s PMI for Nov and Fed’s Biege Book survey of regional economies this week for cues of market direction. Immediate objective for STI is still capped at 3,360 with and downside risk at 3,310. Stocks to watch: *Envictus (formerly Etika): Posted FY14 net profit of RM537.7m from RM5.1m a year ago, boosted by a RM603.7m gain from the disposal of its dairy and packaging business in 3Q14. Adjusted for the disposal effects, core net loss deepened 53% to RM72.4m, as gross margin slipped 1.3ppt to 19.1%, further impacted by a one-off impairment (RM44.7m) on the assets of its remaining business units, and a normalization of tax. BVPS at RM0.545. *Asiatravel.com: FY14 net loss widened to $9.6m from $5.7m, even as revenue grew 4.9% to $91.4m. The improved top line was driven by growth in all online segments (B2C hotel reservation, B2B, tour and flight package and China outbound), but not the offline wholesale business, which weakened. Bottom-line was weighed more rapid rise in operating expenses and inventory costs. *Goodland: FY14 net profit jumped 24% to $21.1m, boosted by fair value gains on investment properties. However, revenue fell 32% to $25.3m due to fewer property development projects. First and final DPS maintained at 0.5¢. BVPS at $0.46. *OUE Hospitality Trust: Acquiring from its sponsor, the 320-room Crowne Plaza Changi Airport for $290m and the 243-room Crowne Plaza Changi Airport Extension (under construction) for $205m, upon its completion. Expected yield is 4.5% for the completed hotel and 4.6% when combined with the extension. *Parkway Life REIT: Acquiring a 76-room nursing home in Fukuoka, Japan for ¥3.5b. The acquisition is expected to be DPU accretive. *Keppel Corp: Keppel Infrastructure Holdings divested its integrated facilities management subsidiary Keppel FMO to Cofely GDF SUEZ for a cash consideration of $44.7m, subject to a post-closing adjustment for working capital and a deferred consideration amount of up to $9.7m, to be paid if certain targets are achieved. *Del Monte Pacific: Entered into a 51/35/14 JV with Nice Fruit and Ferville, to establish a modern facility in Philippines utilizing Nice Frozen Dry technology, a patented technology that allows fruits, vegetables and produce to be picked at its optimal ripeness and frozen for up to three years while preserving its nutrients, structure, original properties and organoleptic characteristics. *Chiwayland: Acquired land use rights to a 19,110sqm land parcel in Suzhou for Rmb186.5m (~$39.5m) at an auction. The land has plot ratio of 2.2x-2.4x,and will be developed into commercial and residential units. Funding via internal sources. *PCRT: Obtained from DBS and Stan Chart, a $210m 3-year offshore loan facility and $70m 1.5-year term loan facility intended for refinancing existing loan facilities, and a Rmb25m 3-year onshore loan facility (with Rmb25m upsize option) for capex of Perennial Qingyang Mall in Chengdu. The loans are collaterized against its Chengdu and Foshan mall as well as its 50% interest in Shenyang Summit Real Estate Development. *STATS ChipPAC: Exclusivity period for Jiangsu Changjiang Electronics Technology’s non-binding proposal to acquire all shares in STATS ChipPAC has been extended to 20 Dec. *Rex Int'l: Extended the date of completion of acquisition of Rex Technology Management to 15 Dec ‘14. *Loyz Energy: Newly appointed Group Deputy Chairman and Independent Director, Simon Charles Lockett, begins work today. Lockett was previously CEO of LSE-listed Premier Oil, an O&G E&P company.