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Singapore stock market and companies daily report ( ) (July 19, 2010)

Contributed by Shares Investment

By Shares Investment

Dow Drops 1% For Week; Bank of America Reports Weak Revenue
Stocks ended the week down 1% on disappointment in earnings and economic news. The Dow Jones Industrial Average lost 2.5%, to close at 10,097.90 on Friday after a report showed consumer sentiment dropped to its lowest level in nearly a year and as the latest batch of earnings disappointed. All 30 components ended lower, led by Bank of America which dropped a whopping 9%. Reuters and the University of Michigan reported their gauge of consumer sentiment dropped to 66.5 in mid-July, the lowest level in 11 months. This was a sharp reversal after index hit its highest level in 2 1/2 years last month. And consumer prices fell 0.1% in June, the third straight monthly decline, amid a decline in energy costs. This came after a string of disappointing economic data earlier in the week, including retail sales and manufacturing activity. Financials were the week’s worst performers, down nearly 3% after disappointing results out of the sector.

Rokko Expects To Reverse Loss With $3m Profit In 1H10
Rokko Holdings expects to reverse a pre-tax loss for the first half of the year in the range of $3m to $3.5m as compared to a loss of $1.2m a year ago. Turnover is expected to quadruple to above $20m, as compared to $5.6m in 1H09. Last year, Rokko booked sales of $29.5m and net profit of $1.8m and is expected to record its best half yearly performance since listing in 2007, managing director Lim Chong Chen said. The improvement in performance was attributed to continued pent-up demand for semiconductor equipment and stamping products, which spilled over from a restocking frenzy in the second half of last year. Meanwhile, the company intends to pay an interim dividend for the half year period.

Significance: With the equipment division accounting for 70% of the order book, Rokko may continue benefiting from the rising demand for semiconductor equipment and stamping products.

Olam Intends To Take Control Of NZ-Listed Dairy Firm
Olam International said it would offer NZ$0.55 a share for full control of a New Zealand-listed dairy farming company. Olam already owns 18.45% of NZ Farming Systems Uruguay (NZFSU), which operates large-scale New Zealand-style dairy farms in Uruguay. The offer values NZFSU at NZ$109.6m ($108m) and will be funded through internal accruals and borrowings. NZFSU’s second largest shareholder, PGG Wrightson, which holds an 11.5% stake, will support the offer, Olam said. NZFSU needs ’significant’ new capital to meet its current obligations and to develop its portfolio of farms, Olam said, and it will need ’substantial capital raisings’ if a takeover is successful and the company remains listed.

Significance: Shareholders of NZFSU may accept the take-over offer given its attractiveness of 38% premium over NZFSU’s three-month average trading price of NZ$0.40 and a near-term working capital support from Olam.

Juken Expects 10-Fold Rise In 1H10 Profit
Juken Technology (Juken) expects its 1H10 turnover and profit before tax to exceed $31m and $3.3m respectively, according to its stock exchange announcement on Saturday. This is much higher than its first half results last year with turnover of $18.6 m and profit before tax of $290,000. The pre-tax profit for 1H10 could increase 10-fold due to cost improvements, recent acquisitions and continued demand for its automotive components. The strong growth in China’s automotive sector and recovery in the US and European markets have resulted in better utilisation rates and higher margins for Juken’s main business supplying automotive parts, said Executive chairman Wong Keng Yin. Juken expects its automotive division, including its stepper motor business, to grow more than 90% to about $13m in the first half of this year, compared to the same period for last year.

Significance: With China’s domestic demand for cars and its components set to rise rapidly within the next few years, higher future earnings for Juken appear highly possible as 50% of its automotive products are being exported to China.

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