Wednesday, November 27, 2013

SG Market (27 Nov 13)

Market Roundup: US stocks pared gains in the final minutes to end little changed amid rebalancing in the MSCI indices but the Nasdaq surged past the 4,000 mark for the first time in 13 years. Encouraging housing data offset weaker-than-expected reading on consumer confidence. Trading is expected to be light for the rest of the week ahead of the Thanksgiving holiday. In economic news, new building permits climbed 6.2% on Oct to its hghest level in more than 5 years, while US home prices rose 13.3% y/y in Sep, the most since Feb 06. But confidence among consumers declined in Nov to a 7-month low of 70.4, missing expectations for a rise to 71.2. The S’pore market is likely to stick to its consolidation pattern with no near term catalyst in sight. Immediate upside is capped at around 3,190 where the 20 and 50-day moving averages are converging with stiffer resistance at 3,232, while underlying support is at the 3,123 level. Stocks to watch: *Global Logistic Properties: Leased another 13,000 sqm of space at GLP Park Suzhou to Geodis Group, one of the world’s largest supply chain solutions providers. This brings Geodis’ total leases with GLP across three cities in China and Brazil to 46,000 sqm. *Vallianz: Awarded US$150m worth of chartering contracts in the Mid-East for platform supply vessels, starting 1Q14 for 5 years, including option for extension. The contracts will boost its current order book by 45% to a record US$485m. Management intends to expand its vessel fleet to 50 by 2016 from the current 26. *Mermaid Maritime: Awarded additional US$30m diving and cable lay subsea contracts in Mid-East, which will commence in Dec 2013 and take 6 months to complete. *United Envirotech: Its transfer-operate-transfer project to acquire and operate a 40,000 m3/day municipal wastewater treatment plant in Shangzhi, Harbin city in China has been terminated due to construction delays and failure to commission the plant. Separately, the group has extended the long stop date for its proposed acquisition of Memstar Technology from 28 Jan 2014 to 28 Apr 2014. *Chip Eng Seng: Acquiring a former nursery and orchard site in Victoria, Australia for A$193m and plans to develop the 28,002 sqm site into a residential project consisting of 90 townhouses and 50 apartments. *Marco Polo: 4QFY13 net profit of $4.2m (+9% y/y) failed to keep pace with the 44% rise in revenue to $28.5m due to a six-fold jump in finance costs, in connection with vessel loans incurred by BBR, a former associate turned subsidiary. FY13 earnings edged up 5% to $22.3m on revenue of $93.5m (+4%), driven by BBR and strong demand for OSVs in the region. Gross margin improved from 32.5% to 37.2%, lifted by its offshore chartering business. Higher personnel and interest expenses were offset by an exceptional gain of $5.9m, which arose from the change in interest of BBR. Special DPS of 1.4¢ has been declared. *JEP Holdings: Disposing all the assets of JEP Precision Engineering Thailand (JEPT), comprising freehold land, factory building and machinery in Thailand for Bt41.8m ($1.67m) against its book value of Bt36.1m ($1.44m), following which JEPT will be dissolved and liquidated. *Novo Group: Warns of an expected loss for 1HFY14, which are attributable to start-up costs for its new tinplate manufacturing plant in Jiangsu and processing plant in Tianjin. *China Environmental Resources: Trading in the shares will be suspended wef today, in both the S’pore and HK exchanges, pending the release of an announcement in relation to a very substantial acquisition by the company. *Food Empire: Established $200m multicurrency MTN programme. *Banyan Tree: Issued $50m of notes due 2018 under its $400m multicurrency MTN programme.

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