SG Market (09 Oct 13)

SG Market: Investor sentiment could remain jittery after US stocks sank and short term bond yield rose as the persistent stalemate over the federal budget and debt ceiling took a deeper toll on financial markets. Investors took profit on the high-flying Internet stocks as President Obama toughened his stance on negotiationg with Repbulicans, declaring he will now bow to axtortion and warned that the US economy risks a very deep recession if Congress does not raise the debt limit. But lawmakers took the first step towards finding a resolution with the Senate prepatring a test vote on a measure to grant Obama the mandate to raise the ceiling unless two-thirds the House oppose. Reflecting the growing anxiety about the potential for a US default, the VIX Index jumped 4.8% to 20.35, its highest level in 2013. With no major corporate news amid the uncertainty, the STI is expected to range trade between its support at 3,100 and overhead resistance at 3,200. Stocks to watch for: *Blumont: Declared that it is not aware of any manipulation to its share price, calling it the job of SGX to find out if there was any trading irregularity and not that of the management. Added that group is not under investigation and sees no reason for it. The company has provided its disclosure and continues its business plan. Chairman-designate Alexander Molyneux highlighted sharp share price correction created a unique value opportunity for him to acquire 135m shares at indicative $0.40/share or 5.2% of total share base post rights issue. *Federal Int’l: Secured orders worth $38m to supply of flowline control and other oil and gas related equipment. This includes the supply of equipment to a major US oil and gas company for deliveries in 2014. *Swissco: Secured two-year charter contracts worth US$7.2m for two of its anchor handling tugs (AHTs) from a UAE oil and gas company. Both vessels will be deployed in Africa and the contracts come with 3x1 year extension option. In addition, the group also clinched short-term contracts for two newly delivered vessels, Swissco Ruby (AHT) and Swissco Neptune (multi-purpose work boat). Group reiterates the healthy demand for its vessels amidst its fleet expansion and renewal program to enhance its capabilities. *Ace Achieve: Proposed placement of up to 100m new shares @ $0.043 apiece to 15 investors, to raise net proceeds of $4m to fund R&D activities, investment in software and working capital. The placement shares represent 15.3% of the share base. *Sembcorp Industries: Shares in its 40%-owned JV Sembcorp Salalah Power & Water Company (SSPW) soared 25% from the IPO price on its trading debut on the Muscat Securities Market. SSPW's IPO was 8.3x subscribed and is Oman's largest share offer this year. Prior to the listing, SSPW was 60%-owned by group, which will now be equity accounted as an associate. *ICP: Wholly-owned subsidiary AceA Resources is investing A$2m in Gossan Hill Gold via subscription of 40m new shares at A$0.05 apiece, with three-year option to acquire an additional 40m shares at an exercise price of A$0.10. Funding will be via proceeds of ICP's rights issue in Oct 12. Post share subscription and full option conversion, AceA will have a 17.2% and 29.4% stake in Gossan respectively. Gossan is involved in gold exploration in New South Wales, Australia and its Mt Adrah Hobbs Pipe 1 discovery is estimated to hold 650,000 oz of gold resources. *Unionmet: 3Q13 net loss more than doubled to US$0.4 from US$0.19m y/y, mainly due to the lack of other income from general trading (-91%), higher staff costs and general expenses (+21%). This was despite a 20.6% jump in revenue to US$8.3m, benefitting from better indium average selling prices of Rmb3500/kg vs Rmb3,000/kg in 3Q12, which led to improved gross margin of 3.1% vs 2.4% a year ago. However, its bottomline was hit by lower margins from trading activities and higher operating overheads. Notably, the group has US$28.6m of cash and no debt. This translates to a net cash of 5.8¢ per share vs last closing price of 6.7¢.