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Singapore stock market and companies daily report (Wilmar International, SC Global) (August 16, 2010)

Contributed by Shares Investment

By Shares Investment

US Stocks Fell Sharply For The Week
Stocks fell sharply last week after a sluggish day of trading marked by thin volume. The showing was the worst week for the markets since July 2. Trading on 13 Aug was quiet. The Dow Jones Industrial Average ended down 16.8 points, to close at 10,303.15, after three consecutive sessions of losses. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 26. The week’s losses were triggered by a gloomier assessment of the economy by the Federal Reserve earlier last week and little indication from economic data, including jobless claims and retail sales, that the economic picture was changing much. Investors also worried about how weakness in Europe would affect the global economy, as the euro lost nearly 4% against the dollar. Investors will also be paying attention to housing data to be released this week, including housing starts and mortgage applications.

Wilmar In Talks To Acquire Stake In Kencana
Wilmar International (Wilmar) has confirmed that it would buy a 20% stake in Kencana Agri for $80.36m or 35 cents a share. The placement deal involves Wilmar’s wholly owned Newbloom buying 229,608,944 ordinary shares in Kencana Agri comprising 150,000,000 new shares from the company and 79,608,944 vendor shares from Kencana Holdings. Meanwhile, Wilmar has posted a 15.4% yoy decline in its 2Q10 earnings despite an 18.3% jump in revenue, driven mainly by higher sales volume and higher average selling prices. Merchandising and processing for oilseeds and grains was the only segment that recorded pre-tax profit growth, with a 47% leap to US$145.8m attributed to ‘timely purchases of raw materials and sales of products’. This offset the weaker contributions from the rest of Wilmar’s business segments. An interim dividend of $0.032 per share has been declared as well.
Significance: Despite lower revenue achieved, Wilmar should benefit from the improving crush margin in China and higher cooking oil demand season in 3Q. The tighter supply-demand outlook and upside support from soybean oil, should also see stronger trading gains going into 2H10 and FY11.

SC Global’s 2Q10 Profit Soars 5 Times
Property developer SC Global posted a 5-fold jump in net profit to $40.4m for 2Q10. Revenue was also up 18% at $267.7m. Higher revenue recognition from the group’s development projects, including The Marq on Paterson Hill, Hilltops and Martin No. 38, contributed strongly to the reported profit as construction progressed for these projects. For 1H10, net profit rose 194% to $53.8m from $18.3m a year ago. Group revenue for the half year increased 28% to $458.4m from $357.6m last year. Revenue from a development project in China, Kairong International Gardens in Shenyang, and the group’s subsidiary in Australia, AVJennings, also contributed to first-half revenue.
Significance: The group’s land bank of over 1.1m square feet of developable gross floor area in the prime areas of Orchard Road and Sentosa Cove as well as the expansion of its operations in China and Australia will continue to underpin its performance going forward.

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