Wednesday, September 25, 2013

SG Market (25 Sep 13)

SG Market: S’pore shares are likely muddle along after Wall Street extended its losing streak as worries over the looming budget talks and a drop in consumer confidence outweighed a rise in home prices and easing concerns in the Mid-East. The market erased earlier losses as President Barack Obama soothed some Mid-East tensions in his address before the UN General Assemby, saying that the US is committed to finding diplomatic solution for the Syrian conflict and that recent Iranian overtures may offer a basis to resolve the ongoing dispute over Iran’s nuclear program. But stocks turned lower in late session as investors watched the debate in Washington over spending cuts with the Democrat-led Senate offering new proposal to fund the government through 15 Nov and Republicans opposing funding for the health-care law. Adding to the dampng sentiment, the Conference Board’s index of US consumer confidence slumped in Sep to a four-month low, offsetting the 1.8% rise in S&P Case-Shiller index of home prices in Jul, its smallest monthy gain since Mar. With momentum iduicators still in overbought territory, downside risk for the STI is seen at the psychological 3,200 level followed by 3,168 (50-day moving average) with overhead resistance at 3,275. Stocks to watch for: *Geo Energy: Entered into 2 deals with PT Parisma Jaya Abadi; 1) a mining services contract to provide overburden removal in a specific 150ha within a concession area in East Kalimantan with service fee of US$2.50/m3) and 2) mining cooperation agreement to produce 420,000 tonnes of coal from same work block with purchase price of US$61.55/tonne of coal with calorific value of >6,800 kcal/kg and US$71.55/tonne of coking coal. *EMS Energy: Won US$36m contract to build a derrick equipment set for a offshore tender rig from controlling shareholder, Koastal Industries, with delivery in 18 months to a China state-owned shipyard. Group expects to secure another 2 such drilling modules over the next few months, which will lift its total order size to US$108m. *Ley Choon: Awarded 4 contracts totalling $30.6m, comprising 2 PowerGas contracts worth $23.6m to lay and commission high pressure gas transmission pipelines along Old Choa Chu Kang Road (completion in 3Q15), a $2.2m JTC project for road surfacing and reinstatement works in Tuas, Woodlands and Yishun as well as $4.8m subcontracting works for the supply and installation of power cables for SP PowerAssets. Orderbok has strengthened to $233.4m *ISDN: Acquired 80% stakes in 2 more Indonesian hydropower-related companies for total US$1.9m. PT Alabama Energy is expected to enter into a 20-year power purchase agreement with state-owned power distributor Persero to build, own and operate a 9MW plant with estimated annual revenue of US$3.6m and investment cost of US$18m. PT Prima Paluta plans to build, own and operate a 10MW plant costing US$20m and estimated to generate US$4m annual revenue. *Cacola: Proposed placement of 19.6m shares @ $0.032 (8.6% discount to last close) to Advance Opportunities Fund. Gross proceeds of $0.6m will be used mainly for exploration of new investment opportunities, payment of fees and general working capital. In addition, Cacola entered into a settlement agreement to repay an aggregate $0.5m debt through the issue of 17.1m shares. The aggregate 36.7m new shares will increase existing share capital by 10%. *AVIC Int’l: Design and engineering subsidiary Deltamarin is setting up a ship-design unit to target Chinese shipyards. Group is taking advantage of the lack of in-house structured design capabilities among Chinese yards to offer customised designs for individual customers. Backed by parent Avic group, a Fortune 500 SOE in China, AVIC also gets strong support from Chinese financial institutions and business networks. *HTL Int’l: Responds to SGX query on trading activity and discloses that management had on 20 Sep met with several fund managers and private investors, following their request to seek a better understanding of the company and its business.

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