SG Market (25 Jun 14)

US Market: US shares backed off from early gains as early enthusiasm from positive economic data gave way to profit taking amid geopolitical concerns in Iraq. The DJIA tumbled 119 pts to 16,818 (-0.7%), while the S&P 500 dropped 13 pts to 1,950 (-0.6%) and the Nasdaq lost 18 pts to 4,350 (-0.4%). The VIX, or Wall Street’s measure of market volatility, rose 10% to 12.13. The market opened higher with the S&P 500 climbing to another intraday record, buoyed by reports which showed consumer confidence for Jun surged to its highest level since Jan 2008, while new home sales jumped 18.6% in May to a six-year high. The gains however reversed in the afternoon session on newflow out of Iraq that Syrian war planes had struck insurgent targets in western Iraq, prompting fears of a widening conflict. Energy stocks fell 2%, led by ExxonMobil (-1.6%), while homebuilders rose 1.1% with both DR Horton (+1.2%) and Lennar (+1.4%) advancing. Among stocks in focus, chipmaker Micron Technology rallied 4% as its 3Q sales and earnings beat estimates. Vertex Pharmaceuticals surged 40.4% higher after reporting promising test results on two clinical trials for cystic fibrosis treatment. But drug chain Walgreen slid 1.7%, after its 3Q revenue and profit missed forecasts S’pore shares are expected to remain in negative territory following the tumble on Wall Street and weak openings in Tokyo (-0.6%) and Seoul (-0.2%) but downside risk for the oversold STI may be limited with support tipped at 3,220 and overhead resistance at 3,285. Stocks to watch: *Longcheer: Disposing its interest in wholly-owned Mobell Technology (MT) to First Prosperous for Rmb240m ($48.2m). The proposed disposal is conditional on shareholder approval to distribute Rmb450m from its retained earnings and sale proceeds by way of a cash dividend. Post-acquisition, proforma FYJun13 NTA will remain at Rmb1.84 ($0.373) per share. *Roxy Pacific: Has launched its freehold 222 unit Trilive condo project in Kovan. Only ~30 units of the 80 units released, have been sold at ASP of $1,550psf (after early-bird discount). The land was acquired at a cost of ~$830 psfppr, with estimated breakeven cost of $1,350 psf. *ICP: Has agreed to acquire the “Travelodge” hotel brand name and trade mark rights in 22 territories and countries in the Asia Pacific region (excluding Australia and New Zealand), for consideration of A$3m. The acquisition will allow ICP to gain access to an international midscale hotel brand. *XMH: Disclosed that from Apr till yesterday, its newly acquired subsidiary MPG has secured five new contracts worth a total of $10.6m that will provide the group with activities through to Jan ’16. *Polaris: Says the group is in discussions for a potential acquisition of a South East Asian company in the same business, and related fund-raising options to finance the potential acquisition. *LionGold: Has mutually agreed with four individuals, to terminate a previously proposed share subscription and proposed issue of convertible bonds. Separately, LionGold has agreed to issue 52m new shares at $0.08135 each to M’sian businessman Mr Moi Hsien Hur. The net proceeds of $4.2m will be used for the group’s gold mining operations (70%) and working capital (30%). *Q&M Dental: CEO Dr Ng Chin Siau speaks to ChannelNewsAsia with regard to the group’s growth opportunities in China. *Oxley: Has terminated the MOU with Sepang Goldcoast and Sepang Bay, on a mutual basis, to develop two parcels of land in Sepang, Selangor, M’sia. *Manhattan Resources: A barge and pusher boat operated by the group was involved in an accident at Tepian Ulak jetty, in Indonesia’s Kalimantan region. Investigations are on-going and the financial impact would be announced at a later date. *JES: Executive Director and CFO Mr Kan Wei Shiu has resigned. Separately, Ms Jin Yu, who is an Executive Director, has been promoted to Vice CEO wef 24 Jun. *Armarda: Independent auditor, Crowe Horwath First Trust, gives unqualified opinion, flags emphasis of matter in the group’s FYMar14 financials, which shows a net loss of $88.2m and negative operating cash flows of $70m.