SG Market (10 Oct 13)

SG Market: S’pore shares may see some relief after US stocks rebounded amid signs of a possible break in the debt impasse and nomination of Janet Yellen as the next Fed chief. In the latest development out of Washington, both Republicans and Democrats floated the possibility of a short-term increase in the debt limit to allow for broader negotiations on the budget. Markets also cheered President Obama’s nomination of Janet Yellen, the current Fed vice chairman and advocate of its stimulus program, to succeed Ben Bernanke as chairman. Yellen supported aggressive Fed action to stimulate US economic growth through low interest rates and large scale bond purchases. With the absence of government economic data, investors will turn to financial results for clues on the economy’s performance with earnings at S&P 500 companies forecast to gorw 1.7% in the 3Q. The STI is poised for a technical bounce as momentum indiactors have corrected from their overbought levels. Upside resistance for the key index is seen at 3,200 and support at 3,100. Stocks to watch for: *Rowsley: Plans to launch 1st phase of residential units for Vantage Bay, its key project in Johor's Iskandar region by early 2014. Vantage Bay is an integrated development comprising ~3,000 apartments, offices, mall and a hotel with total GFA of 1m sqm on a 9.23 ha waterfront site. Group also flagged that newly acquired RSP is expected to exceed its first year $25m earn-out profit target based on its strong project pipeline. Separately, Rowley’s bonus warrants will begin trading on 11 Oct. *ST Engineering: Electronics arm, ST Electornics has secured $416m worth of contracts in 3Q13 comprising communications and electronic systems, advanced IT and rail electronic solutions ($238m) and satellite communications ($178m). ST Electronic has also enlarged its rail electronics footprint in North and South America. *Global Logistic Properties: Plans to increase space at new projects by 20-25% annually over the next two years as e-commerce grows and retail chains expand. GLP is beginning construction of 2.5m sqm of warehouse space in China this year compared to 2m sqm a year earlier. The group has a portfolio of ~8m sqm in China. The new space added will be split equally between first-tier cities such as Beijing and Shanghai, and second-tier cities such as Chengdu. *TEE Land: 1QFY14 net profit fell 22.3% y/y to $0.6m, largely due to IPO expenses incurred and unrealised FX losses, which were offset by increased contributions from associates. Revenue jumped 277% to $13.6m (+276.9%) on the back of progress development on current projects 91 Marshall and The Peak @ Cairnhill I. Group is cautious of the challenging environment in S’pore due to the introduction of cooling measures but see growth opportunities in the Asean region. *Sarin Tech: Dharmanandan Diamonds of India, a leading manufacturer in the global diamond industry, has purchased additional Galaxy and Solaris systems, becoming the first customer to have 10 Galaxy and Solaris systems in-house. The vote of confidence from a reputable industry player may give the group further headway in the diamond cutting industry, which is still in its infancy stages. *Sembcorp Marine: Secured upgrading works for a 115,875 grt passenger ship, Diamond Princess, from Princess Cruises, one of the leading brands under Carnival Corp. This is a repeat contract under Sembcorp Marine’s long-term favoured customer contract with Carnival, which will see further dockings by Princess Cruises at the group's Sembawang shipyard in future. Princess Cruises currently has a fleet of 17 passenger vessels. *CNA: Bags $18m EPC project to develop low-rise residential (8,000 sqm built-up area) and commercial (2,400 sqm) buildings on a 38,316 sqm site in Sriracha, south of Bangkok. This contract represents Phase 1 of the Sriracha development and is slated to be completed by Dec 2014. The development will also see the group’s order book increase to $92.2m. *OKH: Disclosed that its recent share placement of 60m new shares at $0.68 each was taken up by Han Seng Juan (ex-top dealer at UOB Kay Hian), Chow Kok Seng, Vince Chen and Poh Seng Kui. The four prominent investors were also involved in OKH's earlier compliance placement, which was then known as Sinobest Technology. Bulk of the net proceeds of $39.5m will be utilized for potential acquisitions and business expansion plans (80%), while the remaining will be used for working capital. *Sino Construction: Profit warning for 3Q13 due to the intense business competition in the construction industry and dearth of contracts since Jan 2013. In addition, group is required to make an allowance for impairment of Rmb75.3m from four previous roadworks projects, after its customer was charged in court in May 2013 for creating a scam and siphoning off large sums of monies collected from the development. *Anwell Tech: Updated that the police probe over alleged misuse of funds is still ongoing and no charges have been filed but the company executives, who were previously under residential surveillance, have now been transferred to a detention centre in Dongguan to facilitate the ongoing investigation. Anwell will remain suspended until further notice. *LottVision: Obtained approval in principle from the SGX to be removed from the Watch-List with effect from 10 Oct 13.