• Singapore: Singapore market closed higher despite fall before mid-day. Investors went on bargain hunting and collected blue chips after earlier fall during the day due to weak US economic data on order for durable goods and low sales of new home. FTSE-STI dropped as much as 1.2% before mid-day, coming back toward the end of trading hours to close 29.98 or 1.0% higher at 3,025.20 points. Trading volume was 1.49 billion shares valued at S$1.63 billion and gainers took lead against decliners 398 to 248. Local bourse operator Singapore Exchange soared S$0.36 or 4.9% to S$7.76.
• Wall Street: US market retreated for the second day on weak financial results posted from technology giant Oracle Corp, and rumours that Lehman Brothers could be the next sub-prime casualty following Bear Stearns. Technology shares suffered ripples of sell-off after Oracle delivered weaker-than-expected quarterly revenue and made cautious statements on its outlook. Providing technology solution to a lot of different sectors in different countries, Oracle's cautious sales outlook could indicate softer business spending in the months to come. Dow Jones dropped 120.40 or 1.0% to 12,302.46 points and tech-heavy Nasdaq fell 43.53 or 1.9% to close at 2,280.83 points. Lehman's share plunged 8.9% to US$38.71. Crude oil up US$1.68 to close at US$107.58 per barrel on NYMEX.
• Outlook: Development in the US will continue to dominate local sentiments. For the pass three weeks, the opening price of STI has track the closing of the Dow without fail. When Dow was closed lower, STI opened down and when Dow closed higher, the STI opened up. No exception is expected for today. With the Dow dropped more than 100 points yesterday, STI is expected to open down. The reasons for investors to track the development in the US instead of focusing on Singapore economy were easy to understand. Singapore is an open economy and its performance will be easily affected by global economies, especially the world largest economy, the US. Investors' memory is still fresh. The most recent US slowdown in 2001 has dragged the Singapore economy down by 2.1% (See Chart). However, the 2001 Singapore recession was partly due to the hollowing out of the manufacturing sectors to cheap producing economies and the Singapore economy underwent restructuring. The Singapore economy has since emerged stronger. We believe it is likely to remain healthy during the current US slowdown or recession, just as it did during the 1982's and 1991's US recessions.
Company Highlights
OKP Holdings Limited – Awarded S$16.86m contract to widen CTE
• OKP Holdings Limited is a leading home-grown infrastructure and civil engineering company in the region, specialising in the construction of airport runways and taxiways, expressways, flyovers, vehicular bridges, urban and arterial roads, secured a S$16.86m contract to widen the stretch of the CTE between Ang Mo Kio Avenue 1 and Ang Mo Kio Avenue 3.
• OKP will be adding a lane in each direction along the 1.5 km stretch. Work is expected to be completed by end-August 2009.
• As at 26 February, the Group's order book based on secured contracts stood at S$209.2m.
KS Energy Services Limited – Secured US$130m time charter contract
• KS Energy Services Limited ("KS Energy"), a leading one-stop energy services provider to the global oil & gas ("O&G") and petrochemical industries, secured a firm 3 years drilling contract in excess of US$130m for the charter hire of a 300-feet drilling jackup rig.
• The contract is for the charter of the "KS MedStar-1", a 300-feet cantilever drilling jackup rig. The KS MedStar-1 will serve drilling activities in the Mediterranean Sea for a firm contract period of 3 years plus a renewal option for one year. If the renewal option for one year is exercised, the value of the contract will be increased to US$175.2m.
• Acquired in July 2007, KS Energy expects to take delivery of this rig in March 2008. The funding for the acquisition of the rig will come from a combination of debt financing and internal financial resources.
Best Regards,
Westcomb Research Team
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