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Singapore stock market and companies daily report (The Dow Jones Industrial , First Ship Lease Trust) (July 15, 2010)

Contributed by Shares Investment

By Shares Investment

US Stocks Flat Following Fed’s Bearish Outlook

The Dow Jones Industrial Average closed 0.04% higher, clinching a 7-day positive streak, after Intel delivered strong earnings. The Nasdaq climbed 0.35% while the S&P lost 0.02%. The market was up in early trades as investors shrugged off weak retail sales. However, gains were tempered by a downgrade on US economic growth forecast for this year by the Federal Reserve and a report that suggested 11 European banks may fail their stress tests. Oil fell to US$77.04 a barrel after a government report showed that crude inventories fell and refineries boosted production. Gold prices slipped to US$1,206.80 an ounce. Meanwhile, the euro hit a 2-month high against the US dollar.

Slowdown In China’s Growth As Stimulus Fades

China reported a slowdown in 2Q gross domestic product growth which indicated the nation’s rapid expansion was beginning to cool as it withdrew some of its expansionary policies. The 1H10 GDP growth came in at 11.1%, slower than the 11.9% growth recorded in 1Q10. The country’s consumer price index for June increased 2.9% while its producer price index expanded 6.4% from the year-earlier month, with both measures falling below economists’ expectations for 3.3% and 6.8%, according to a Dow Jones Newswires survey.

FSL Trust Receives US$6m For Vessel Re-Delivery

First Ship Lease Trust (FSL Trust) has received US$6m, following the non-fulfilment of contracts by FSL Trust’s client Groda Shipping & Transportation (Groda) of 2 vessels. In May, Groda had asked to return Verona I and Nika I to the trust earlier than stated in the charter agreement, citing cashflow problems. Because the contracts were not fulfilled by Groda, Groda was required to pay the sum. The US$6m will be recognised as non-recurring revenue for the quarter ended 30 Jun-10. Daxin Petroleum detained Verona I and Nika I in Japan and China respectively, over claims that it had not been paid for bunkers it supplied to the vessels. Verona I has since been released, after FSL Trust posted bail of about US$1.6m with a Japanese court. Nika I remains in detention, with bail set at US$2.8m.

Significance: The US$6m may boost FSL Trust’s 2Q10 bottomline as it acts to compensate for the loss of lease rentals in one payment.

This article is contributed by Shares Investment. Visit Sharesinv.com for the latest Singapore, Malaysia and China stock market news and reports.