SG Market (21 Oct 13)

With the US having averted a default, and backed by strong corporate earnings, the US market rallied Friday. The Australian and Japan markets are also up this morning, paving the way for the S’pore market to open higher, as investors return to an extended risk-on environment. On Friday, quarterly results of key US index stocks, Google, Morgan Stanley and General Electric beat street estimates, fueling positive sentiment. Google broke the US$1,000 barrier to close 14% higher at US$1,011.41, while General Electric gained 3.5% to US$25.55, rising to a five-year high. Meanwhile, China’s strong 3Q13 GDP of 7.8% may underpin momentum in Asian markets further, with the State Council noting that the China economy is “stable” and “shows good trend”. As long as the STI stays above the 50-day moving average of 3,150, the technical trend favors the index to make a bid to test 200-day moving average of 3,238 in the near term. The trio of SGX stocks - Asiasons, Blumont and LionGold – may come into focus today, after the exchange ends the designation of the counters at 8.30am today, citing more stable trading in these stocks. Stocks to watch for: #Rex: Wholly-owned subsidiary, Rex US will exchange its 20% direct interest in the Colorado and North Dakota concessions, into shares of its partner, Fram. This will raise Rex’s interest in Fram from 24% to 27.7%, and as the latter executes on its strategy of becoming a listed company in its own right in the near future. #People’s Food: New Oceana intends to make a voluntary conditional offer for People’s Food shares at cash consideration of $1.20 per share, and/or a share consideration of one new New Oceana share. The undertaking shareholders, with a combined 72.1% stake have agreed to accept the offer and elect the share consideration. The offeror intends to privatize the company and does not intend to revise the offer price. #CNMC Goldmine: Reports that its Sokor Gold Project has produced 1,526.09 oz of gold dore bars in a single gold pour, which is the highest pdtn output on record for a single gold pour since the start of the co’ s gold pdtn in Jul ’10, and is 16.3% higher than the previous record of 1,311.33 oz of gold dore bars produced last month. In line with the co’s strategy of ramping up gold pdtn, the construction of a third leach yard is underway. In addition, the installation of a second gold de-sorption processing plant are in progress. These new facilities are expected to be completed by 4Q13. #Health Management International: The $0.16/share voluntary conditional cash partial offer of 61m shares by Nam See Investment has been declared unconditional, after receiving acceptances of 136.5m shares in aggregate. The closing date of the offer will be 28 Oct. #Enviro-Hub: 51% owned EH Property has completed its acquisition of F2S1 Investment. F2S1 holds the PoMo building located at 1 Selegie Road – a 99yr 9-storey retail and office commercial building with 177.4k sf NLA. Its market valuation was $273m as at FY12. As at FY12, F2S1 recorded NTA and book value of approx $116.9m and net profit of $7.4m. The acquisition is in line with Enviro-Hub’s diversification strategy to achieve long term growth, and gives the group further exposure to the property sector.