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Singapore stock market and companies daily report (Soilbuild Group, UK Casinos, CSC Holding) (August 19, 2010)

Contributed by Shares Investment

By Shares Investment

US Stocks Rise On Strong Showing By Retailers
US stocks gained on Aug 18 as a strong showing by retailers offset the impact of high oil inventories that’s weighed on major energy stocks. The Dow Jones Industrial Average ended up 9.7 points to 10,415.54 amid thin volume. Most of the S&P sectors were higher, led by consumer discretionary, telecom and technology while energy and utilities were lower. Investors are awaiting more news on the employment front from the release of jobless claims on Thursday. Meanwhile, oil fell to US$75.42 after US government data showed crude inventories and oil products rose to a record high. The data follows Tuesday’s report from the American Petroleum Institute, which showed a surprisingly large build in supplies. Crude prices have fallen in six of the last seven sessions.

Soilbuild To Divest Logistics Warehouse For $60m
Integrated property developer Soilbuild Group Holdings is divesting Penjuru Logistics Hub, a purpose-built logistics warehouse located near Jurong Island and Jurong Port, for $60m. The integrated boutique developer is expecting to recognise a gain of about $16.3m from the sale of the property at 34 Penjuru Lane, which has a remaining lease of 22 years. The warehouse, which has 0.4m square feet of business space, will be leased back to Soilbuild for five years at about $5m per year. ‘As at end-June 2010, Penjuru Logistics Hub had been leased to a range of logistics support businesses, including those for petrochemical and maritime companies located at Jurong Island and Jurong Port respectively,’ said Soilbuild.
Significance: With a stronger balance sheet and lower gearing, Soilbuild is well placed to tap on new opportunities to optimize its portfolio mix and thereby enhance yields.

Genting Singapore Gets Majority Vote For Divestment Of UK Casinos; No Dividends This Year
Shareholders of Genting Singapore have approved the sale of its UK casinos, including Crockfords, the world’s oldest private gaming club to parent Genting Malaysia for ?340m ($716m) during an extraordinary general meeting (EGM) on Aug 18. Meanwhile, Genting Singapore posted a second-quarter profit of $397m, a sharp turnaround from the loss of some $51m on-year. A total of $860.8m in revenue for its Resorts World Sentosa integrated resort (RWS) has also been reported. Although Genting has not given a breakdown of earnings from its gambling operations, some analysts believe the segment contributes about 70% to 90%. Separately at the EGM, Genting Singapore revealed that it could issue its first cash dividends in as early as two years as current loan agreement had restrictions on its dividend issuance till 2011.
Significance: Regardless of the absence of dividends for 2010, investors should view the divestment as a positive move as the UK operations will no longer be a drag on the performance of RWS and enables Genting Singapore to focus on its large-scale integrated-resort development.

CSC Unit Sued For Over $10m By Penta-Ocean
CSC Holdings’ subsi, CS Construction & Geotechnic (CSCG) faces a $10.34m claim from Penta-Ocean Construction (POC). CSCG was sub-contracted to carry out certain piling and foundation works under Exxon-Mobil’s Singapore Parallel Train Project at Jurong Island. This project began in late 2007 and was reported to be costing more than US$5b in total. The piling portion of the project started in 2008 and was completed late last year. Penta-Ocean was supposed to pay CSCG progressively, and that the cost of CSCG’s work was more than $30m. By an Adjudication Determination dated August 5 obtained by CSCG under the Building and Construction Industry Security of Payment Act, POC were directed to pay, amongst other things, the adjudicated amount and interest thereon to CSCG. POC paid the adjudicated amount on Aug 10, and has now filed a lawsuit to get some of it back.
Significance: The downside risk caused by the lawsuit could be mitigated by a series of contracts secured of late, which booked CSC’s orderbook to more than $180m.

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