SG Market (09 Sep 13)

SG Market: S’pore shares are expected to face a bit of tug-and-war after Wall Street closed little changed in choppy trade last Fri as investors weighed a weaker-than-estimated nonfarm payrolls increase of 169,000 jobs, easing concerns over the size of potential stimulus cuts with the Fed set to meet next week. But the market remained spooked over the US-Russian war of words over a possible US military strike against Syria. On a positive note, Japan reported 2Q economic growth of 3.8% this morning, higher than 2.6% estimate. Market sentiment is expected to be lifted by Tokyo’s successful bid to host the 2020 Olympics Games, which will boost infrastructure spending. In other macro news, Chinese exports rose more than economists projected last month while Australia voted in a new government. In S’pore, interest will continue to be centred on speculative counters with spurious M&A deals that are difficult to assess and energy plays. The STI will need to sustain above the 3,065 resistance to reverse its current downtrend with support seen at 2,990. Stocks to watch for: *Ramba Energy: Jakarta-listed 39% associate Sugih Energy makes partial offer for 51% stake of parent Ramba @ $0.65 per share. Sugih holds equity interests in two exploration blocks in Sumatra - 49% stake in Lemang block and 100% stake in Kalyani block as an operator. Ramba owns the balance 51% stake in Lemang and 70% working interest in already-producing Jatirarangon block in West Java. Sugih highlights potential synergistic benefits. Ramba's CEO and others holding 33.3% has given their irrevocable undertakings to accept Sugih's offer. *Sunpower Group: Clinched Rmb85.1m contract from the Shenhua Group, to supply salty wastewater treatment equipment and flare system EPC services for a Shaanxi methanol downstream processing project. The zero liquid discharge project will be completed and delivered by end 2014. *Jason Holdings: Awarded 17 contracts worth $14.6m for the supply/installation of timber flooring and stones to various residential and commercial projects in S’pore. Most of the contracts are for completion in 2014 and beyond. *SingHaiyi: Takes a 65% stake in Tri-County Mall in Cincinnati, Ohio, USA for US$29.3m. The shopping mall has 1.3m gross sf of retail space and has current occupancy rate of 84%. Tri-County Mall was sold through auction to SingHaiyi's US partner American Pacific International Capital (APIC) for US$45m in July and comes with a net book value of US$194m. *XMH Holdings: Acquired Mech-Power Generator Group for $17.4m, which will expand its product range to include large customised solutions in non-marine sectors such as commercial buildings, hospitals, education centres, data centres, airports, hotels and resorts infrastructural projects. The consideration will be paid via cash of $8.7m and issue of 22m new shares @ $0.396. The purchase is backed by a net profit warranty of not less than $6.9m for both FY14 and FY15 and NTA of at least $4.5m for FY13. *Stamford Tyres: FY14 net profit slump 94% y/y to $0.4m, despite revenue slipping just 6% to $78.1m. Bottom-line was impacted by a $0.4m loss from the group’s joint ventures compared to a $11.5m gain in the previous year. *Tee Land: Auditors drew attention that two directors of the company, Bertie Cheng (chairman) and Phua Chian Kin (CEO), are the subject of investigation by the CAD on possible contravention of market rigging provisions in the Securities and Futures Act.