Spore Market (14 June 13)

Morning Bites The S&P 500 posted its second-biggest advance of the year, advancing 1.5% to 1,636, after data showed that US retail sales in May rose the most in three months, beating expectations, and that fewer Americans than forecast filed for unemployment benefits last week. Aided by the positive overnight news, the Singapore market is looking to open higher today, set for some respite from oversold conditions. The STI, which ended at 3,131 yesterday, is down 2.2% from Monday’s close. As the index has failed to close below the 3,113 classical support, this suggests that the bulls have temporarily gained the upper hand. The odds favor a near term bounce, though upside may remain capped by the 200 day moving average at 3,190. Bears may take the opportunity to sell into strength, as concerns about Fed tapering remain in the background. Fed Chairman Ben Bernanke is expected to provide more clarity on this next week, with the FOMC meeting to take place over 18-20 Jun. Note that the FTSE Group has made some adjustments to its indices: - Mapletree Greater China Commercial Trust and Blumont have replaced Sound global and Mewah in the FTSE ST Mid Cap Index. - Gallant Venture will be removed from the FTSE ST All Share Index and FTSE ST Small Cap Index. Changes will be effective from start of trading on 24 Jun Stocks to watch: * Fraser & Neave: The 40/30/30 JV between FNN, Far East Organisation and Sekisui House, has submitted the top bid of $257m ($533 psf gfa) for a 99-year private housing site along Fernvale Close in Sengkang West. The 482,131sf plot is estimated to yield 490 units. Market watchers estimated a breakeven cost of $950 to $1,000 psf, and average selling price of $1,100 to $1,200 psf. * Oxley: 49% owned associate, Oxley-Worldbridge (Cambodia), has proposed to acquire freehold plot in Phnom Penh, with land area of 2,294 sqm, for development. Oxley will fund its share of the US$4.1m purchase price with internal resources and bank borrowings. * Tee International: Awarded new projects worth a combined $49m for construction and redevelopment works. Project completion dates range from 3Q13 to 4Q14. The new contracts bring Tee’s total outstanding order book for its Engineering segment to $270m. * Swee Hong: Secured a $14m contract from LTA for the proposed sewer diversion work at Springleaf station. * Low Keng Huat: 1QFY13 earnings increased 16% y/y to $15.3m, mainly due to higher profits from the development segment, partially offset by lower profit from its construction, hotel and investment segments. Revenue however, plunged 47% to $17.8m, due to a decline in construction activities following completion of two large projects last year. * China Hongxing: 1Q13 net loss widened to Rmb73.2m from Rmb10.3m a year ago. Revenue at Rmb 481.8m fell 4% y/y. The weak performance was driven by a decrease in the size of its retail network, due to closure of several ERKE points of sales which were affected by increased labour and rental costs. * CFM Holdings: Expects to report loss for FYJun13; expects lower revenue after the sale of assets in its Thailand operations in Jun ’12.