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Singapore stock market and companies daily report (Yangzijiang Shipbuilding, Viking Offshore and Marine) (July 20, 2010)

Contributed by Shares Investment

By Shares Investment

US Stocks Rebound On Optimism About Earnings
US stocks rose, rebounding from the biggest drop this month, as optimism about earnings from technology and energy companies overshadowed a drop in financial shares. The Dow Jones Industrial Average gained 0.6%, with more than two-thirds of its components finishing higher. The S&P advanced 0.6% while the Nasdaq rose 0.9%. According to a chief investment strategist at Standard & Poor’s, approximately 15% of the companies in the S&P have reported earnings and about 60% of these companies have beaten estimates. Meanwhile, gold prices fell to US$1,181.70 an ounce and oil prices slipped to US$76.54 a barrel, after rising earlier. The euro traded near a recent 2-month high against the US dollar, rebounding from earlier lows hit after Moody’s cut Ireland’s debt rating while negotiations between Hungary and international lenders broke down.

Yangzijiang Clinches US$234.2m Worth Of Contracts In 2Q10
Yangzijiang Shipbuilding (Holdings) chalked up 10 shipbuilding contracts worth US$234.2m in the second quarter of this year, lifting its outstanding order book to 124 vessels worth about US$5.2b as at June 30. Bulk carriers account for 82 of the 124 vessels on order while the rest are containerships. The order book of Yangzihiang’s newly acquired shipyard – Jiangsu Yangzi Changbo Shipbuilding Co (JYCS) – is not included in the figures. As at June 30, JYCS’s order book stood at US$338m, with delivery slated between 2H10 and 1H12. Yangzijiang has also received approvals from the Taiwan Stock Exchange and the Taiwan Central Bank to list up to 120m Taiwan Depository Receipts (TDR). The TDR shares comprise up to 100m new shares to be issued by the company and up to 20m vendor shares.

Significance: Being a step closer to its TDR listing which will broaden its investor base and boost funds for its war-chest, coupled with a healthy order book to sustain its operations, Yangzijiang’s prospects seem good.

Viking Invests In 2 Offshore Firms
Viking Offshore and Marine (Viking) has bought controlling stakes in 2 offshore-related companies for nearly $29.8m. Viking is buying 100% of Promoter Hydraulics, a specialist in winches, power packs and marine decking equipment, for $22.3m in cash and shares. The second acquisition is a 55% interest in Marine Accomm, said to be Singapore’s largest turnkey project integrator of accommodation and fit-out units for the offshore and marine industry. The cost of this deal is $7.5m. Viking has also entered a put-and-call option agreement which, if exercised, will result in the acquisition of the remaining 45% of the shares in Marine Accomm within specific periods during the next 2 years. Viking expects the acquisitions to raise its revenue significantly for the financial year ending 2010 and to contribute to future financial performance.

Significance: With a change in its core business focus to a integrated O&M solutions provider, Viking hopes to tap into the offshore and marine industry has been booming recently. The acquisitions will complement and bolster Viking suite of specialised offshore and marine business.

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