SG Market (06 May 13)

SG Market: S’pore shares may open in positive territory, tracking sharp gains on Wall Street and investor relief of an incumbent BN victory in Malaysia, which will put the Iskandar-related stocks at ease that many upcoming projects will remain on track. Immediate resistance for the STI is pegged at 3380, which represent the 78.6% Fibonacci retracement of its 2008/09 meltdown with underlying support at 3320. Stocks to watch out for: *Sembcorp Marine: 1Q13 results came in below par with net profit 5% y/y, -29% q/q to $118.7m and revenue +11%, -24% q/q to $1.05b. Better-than-expected operating margin from rigbuilding and shiprepair activities was offset by lower contribution from the Cosco Shipyard Group. Including $1.7b new contracts, order book bulged to $13.6 with deliveries stretching till 2019. *Cosco: 1Q13 net profit sank to $9.7m (-65%), well below estimates, on revenue of $733m (-25) as it delivered 7 bulk vessels vs 12 y/y amid challenging operating conditions. Shipyard revenue declined 26% to $965.9m, while dry bulk shipping rose 8% to $13.8m. Total order book stood at US$6.4b with deliveries till 2015. *Roxy-Pacific: 1Q13 net profit surged to $11.7m (+29% y/y) in line with revenue jump to $53.7m (+41%) due to higher income recognition from 6 development projects (+72%) and higher rentals from shop units in Roxy Square. Balance sheet remains sound with cash of $255.4m and revised NAV/share of $0.678. Vard: Secured NOK400m or $85.3m contract with repeat customer Island Offshore for construction of 1 advanced offshore support vessel. Delivery is scheduled in 3Q14.