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Singapore stock market and companies daily report (Olam International, Neptune Orient Lines) (August 17, 2010)

Contributed by Shares Investment

By Shares Investment

Dow Ends Lower As Manufacturing Report Falls Short Of Expectations
Stocks ended a quiet trading session largely flat, with the Dow closing with a slight loss on Aug 16. Technology stocks gave a modest boost to the Nasdaq, which ended higher. The Dow Jones Industrial Average fell 1.1 points to 10,302.01, marking a fifth straight day of losses. The CBOE Volatility Index, the widest gauge of fear in the market, fell below 26. Technology and materials stocks rose, while health care, financials and telecom fell. Last week marked the worst week for the markets in the past six, with the major indexes falling 3 to 5%. A gauge of manufacturing activity in New York reported a slight increase after plunging in the previous month, according to the New York Federal Reserve. Still, the results were below expectations. Comex gold for August delivery rose for the fourth consecutive session, gaining 0.79% to US$1,224.50. Meanwhile, Nymex crude oil for September delivery fell for the fifth day by 0.20% to US$75.24.

Olam Faces Rival Takeover Bid For NZ Farming
Olam International’s bid for NZ Farming Systems Uruguay (NZFSU) at NZ$0.55 per share has been upstaged by the Uruguayan-based Union Agriculture Group, which threw in a bid of NZ$0.60 per share yesterday. Union Agriculture, which holds 1.65% of NZFSU, launched a competing bid to secure control in NZFSU, which has Olam as its single-largest shareholder. Union Agriculture, a privately held company formed to buy and develop prime agriculture land in Uruguay, values NZFSU at NZ$147m ($142m), or 33.6% higher than Olam’s valuation of NZFSU. Meanwhile, Olam, which launched its NZ$110m takeover offer last month said yesterday it ‘has received acceptances that, taken with its existing holding, represent 30%’ of NZFSU as at Aug 13, up from 18.45% at the time of the takeover announcement.
Significance: To avoid a potential price war, Olam could just accept its rival’s bid and sell away its stake in NZFSU for NZ$0.60 per share, which is much higher than the NZ$0.41 it paid earlier, and book a gain.

NOL Finalises Order For Two 10700-TEU Ships
Neptune Orient Lines (NOL) said yesterday that it has finalised an order for two new 10,700-TEU container ships valued at $1.2b, on a day when it also reported higher container shipping volumes. The global shipping and logistics company, which recently swung back into the black, said that the deal for the two ships, for delivery in 2012, was inked in Seoul yesterday. These two vessels are part of the 12-ship order and to be built by Daewoo Shipbuilding & Marine Engineering that NOL announced on July 21. Meanwhile, NOL had last week reported a turnaround in performance due to improving cargo volumes and freight rates. It reported a 2Q10 net profit of US$100m for the second quarter, from a net loss of US$146m in the same period last year. Its revenue also rose 53% to US$2.1b.
Significance: NOL is expected to continue benefiting from rising freight rates, which could lead to significant improvement in third-quarter earnings.

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