SG Market (15 Dec 14)

With negative macro news flow all around, investors are adopting a risk-off approach. The Nikkei and Kospi are down 1.5% and 0.6%, respectively this morning. Coupled with the sell-off in the US market last week, expect the STI to open on a weak note today. From a chart perspective, the STI has continued to trade within the 3,300 – 3,360 band, If the psychological 3,300 level fails to hold, expect the index to test the next support at 3,274 (50 day moving average). Stocks to watch: *Swiber: First foray into the offshore O&G market in West Africa, after securing a US$710m award from a Houston-based O&G company for engineering, procurement, construction, installation and commissioning services. Work is expected to commence in 1Q15, with completion in mid-2017. *Vallianz: Clinched a US$97m charter contract with a Middle Eastern national oil company to supply a specialized vessel for up to five years from 3Q15. This brings the group’s order book to US$626.4m. *C&G Environmental Protection: Received approval from China Securities Regulatory Commission for the sale of its waste-to-energy business and assets to Shanghai-listed Grandblue Environment for Rmb1.85b ($390m). *China Environment: Placing 72.5m new shares at $0.104 apiece, and 72.5m warrants (exercise price: $0.104), to GlobalWin International Consultants, which is owned by Dharma Rustam Winata. *Cortina: Sold an option-to-purchase (till 22 Dec) its un-tenanted strata unit in The Adelphi for $5.4m, 5-7% below market valuation. The group expects to realise a disposal gain of $800k upon completion of the sale. *Sinarmas: Disposing its New Brook Buildings in London for £113.4m ($223.7m) to realize a gain of ~$72.3m. The property is a freehold Grade A office building consisting of a 12-storey tower connected to a 9-storey wing with net lettable area of 99,911sqf. Post disposal BVPS will rise by $0.02 to $0.51. *XMH: 2QFY15 net profit slumped 65% y/y to $0.7m, even though gross margin improved 6.6 ppts to 29.7%. Revenue fell 29% to $19.2m due to slower sales in the distribution business. The group continued to be affected by the sluggish demand for Indonesian coal and consequently fewer vessel new-builds. Going forward, management expects increased deliveries and new orders in Vietnam, underpinned by the expansion of its fishing fleet. The recently acquired Mech-Power Generator is on track to deliver its best ever year on strong demand for standby generator sets, while the Z-Power Automation acquisition is in the final stages of completion. BVPS at $0.125. *LionGold: 2QFY15 losses from continuing operations narrowed to $11.6m from $44.1m a year ago, mostly the result of absence of $47.7m fair value loss. Revenue fell 23% y/y to $18.5m due to lower gold sales. BPVS at 5.5¢. *IPCO: 2QFY15 losses narrowed to $0.4m from $114.7m a year ago, thanks to the absence of fair value losses and net losses on disposal amounting to $351.9m. Revenue climbed 11.2% y/y to $8.8m, as lower semiconductor revenue was more than offset by increase in income from US real estate development and supply of natural gas in China. The group broke even on the operating level but was loss-making after share of results from associates and income tax. BVPS at $0.02. *Wilmar: Meeting for the scheme of arrangement to acquire Goodman Fielder (to be held 26 Feb ‘15) was approved by the Federal Court of Australia. If Goodman shareholders approve the scheme, they will be entitled to receive a payment of A$0.675 cash/sh on the implementation date (expected: 17 Mar ‘15).