DJ MARKET TALK: Singapore's STI May Stall; Next Hurdle At 3100 

0052 GMT [Dow Jones] Singapore's STI may take a breather after tapping a one-year high Monday, amid signs the global rally is slowing. "The non-farms bounce worked its magic in Asia yesterday, but was already losing its momentum in U.S. and European trade last night," says Justin Harper, market strategist at IG Markets Singapore, in a note. "Markets crept up in the right direction, but took on a more cautionary approach having woken up and smelt the coffee that the global economy is still in poor shape." The STI ended Monday up 0.7% at 3071.82. Former 3050 resistance now likely offers support, while 3100 is the next hurdle. Keppel (BN4.SG) and SembMarine (S51.SG) will likely be in focus after Keppel firmed up contracts for five additional rigs from Sete Brasil for US$4.1 billion. SGX (S68.SG) bought 49% of local electricity market operator Energy Market Co. for an initial S$17.6 million. Singapore Airlines (C6L.SG) unit SilkAir said Monday Leslie Thng will succeed Marvin Tan as the regional carrier's CEO from Sept. 3

 

Daily Review, 07 August 2012 Page 1 of 4

SGX-ST Member, SGX-DT (CNCM)

Daily Review

07 August 2012

LIM & TAN SECURITIES PTE LTD

20 CECIL STREET

#09-00 EQUITY PLAZA

SINGAPORE 049705

TEL: 65330595 FAX: 65332368

www.limtan.com.sg

RCB Reg No. 197301030W

SUMMARY

1. KEPPEL CORP ($11.37, up 10) has firmed up

contracts with Sete Brasil for the design and

construction of 5 semisubmersible drilling rigs

for US$4.1 bln, bringing to 6 DSS 38E semis it is

building for the Brazilian company. Petrobras is

one of the shareholders of Sete. The contracts, first

announced in April as a Letter of Intent, only had a

mild impact of Keppel’s share price then, rising from

$11.24 to $11.67. We maintain BUY.

2. CAPITALAND ($3.13, up 1): Group CEO Liew Mun

Leong sold 1 mln shares at $3.08, reducing holding to

2,554,563 shares. Mr Liew, who will be stepping down

as CEO next year, had received 219,648 shares under

a group scheme in March this year, and exercised

493,600 options in Apr ’10 at $3.26 a share. He last

sold 1.6 mln shares in May ’08 at $6.92 a share average.

We are downgrading C-Land to Take Profit as it is

expected to encounter technical resistance at the

$3.10-3.20 level.

Daily Review, 07 August 2012 Page 2 of 4

SGX-ST Member, SGX-DT (CNCM)

SYNEAR FOOD

S$0.139-SYNF.SI

 2Q 12 profit fell 32% yoy and 36% qoq to

Rmb15.4mln, dragging 1H 12 profit down 28% to

Rmb39.2mln following the positive test for minute

traces of the staph bacteria in their products earlier

this year.

 And management warned that their operating

environment will continue to remain very challenging

due to the continued negative publicity of their

products (even though their products have recently

passed the standards imposed by the F&B ministry in

China), rising costs pressures as well as intense

competitive pressures.

 We would continue to stay away from the stock (at

13.9 cents, its up from its all time low of 10.5 cents

achieved in Nov ’11).

Daily Review, 07 August 2012 Page 3 of 4

SGX-ST Member, SGX-DT (CNCM)

CHINA ESSENCE

S$0.064-CESS.SI

 China Essence warned that 1Q ended June ’12 will

continue to remain in the red versus loss of Rmb4mln

a year ago and loss of Rmb130mln a quarter ago.

 The negative performance reflects the high costs of

their inputs, rising costs pressures from labor and

electricity, supply glut and weak demand conditions.

 We would continue to stay away from the stock given

its continued erosion of shareholders funds, weak

financial position & fundamentals (at 6.4 cents, its

marginally above its all time low of 6.2 cents hit on 27

June ’12 and is below its Mar ’09 low of 9.5 cents).