SG Market (24 Dec 14)

S’pore shares may get a slight lift from Wall Street’s record busting run but trading volume is likely to remain lethargic in view of the half-day trading session as we head into the Christmas and New Year holidays. From a chart perspective, upside on the STI may be capped by near term resistance at 3,360 with downside support at 3,280. Stocks to watch: *Economy: Singapore’s headline inflation contracted 0.3% in Nov ‘14 (Oct ‘14: +0.1%), mainly on lower costs on COE and housing. Core inflation rate (CPI ex-accommodation and private road transport) eased to +1.5% (Oct ‘14: +1.7%). *Atlantic Navigation: Acquired a new 5,150 BHP AHTS vessel through a jointly-operated company, AtlanticVenture. Atlantic Navigation will manage the vessel for 3 years, with automatic renewal thereafter subject to mutual agreement of terms. Separately, the group has also secured charter extensions for two of its deployed vessels, a jack-up accommodation barge and an AHTS vessel, with total contract value of ~US$18m. The contract comes with an option to extend for one more year, which could bring the total potential value to ~US$33m. *China Essence: Entered non-binding MOU to negotiate on a debt scheme arrangement, on account of the shortage of working capital for raw materials due to its inability to collect overdue receivables. In addition, balance sheet is also heavily burdened by debts from other financial institutions in China. *SIIC Environment: Signed 20-year supplementary concessionary agreement, with minimum off-take volume guaranteed, for its Hanxi Expansion and Upgrading Project. Recall the Rmb722m investment will expand the existing 400,000 tons/day capacity to 600,000 tons/day, with the discharge standard upgraded from the existing Grade 2 to Grade 1B. *AusGroup: Awarded a A$68.5m contract extension with CB&I Kentz Joint Venture, to continue to provide ongoing scaffold services, including the provision of key management personnel, scaffold design and engineering and coordination assistance through the supply of labour services. With the award, AusGroup’s order book stands at $486m. *Boustead: Proposed demerger and Mainboard-listing of up to 49% in its real estate solutions business- Boustead Projects (BP), through distribution in specie. Following completion of the restructuring, BP will have an estimated market valuation of $367.5m, and book value of $162.5m. *Lifebrandz: Proposed placement of 500m new shares at 0.36¢ apiece to three private investors, enlarging share capital by 16.34% to 3,060m shares. Net proceeds of $1.8m will be applied towards working capital.