Warrants Highlight

Noble - an acquisition in sight?

+28.6% in less than 2 months
After hitting a two-year low on 25 July 2012, Noble has made a spectacular rebound. As of yesterday, the counter has added 28.6% compared to the July low of $1.03. For the same period, the benchmark STI has only gained 2.2%.

MER has a ‘outperform’ recommendation on the counter, with a 12 month price target of S$1.40.

Macquarie’s Noble warrants

Yesterday, Noble Group and Posco, a Korean steel producer, led a consortium to make a takeover proposal to the board of Arrium Ltd, an Australian resources company. Taking advantage of the 22% fall in Arrium’s share price this year, as well as the weak iron ore prices, the consortium offered an indicative cash price of A$0.75 per share.

Arrium rejects bid for now
In their statement, the bidding consortium said that the offer was a “compelling proposition” for Arrium’s shareholders since the company’s business faces “uncertainty” while the offer provides certain “cash outcome”.

However, Arrium rejected the bid although the offer was a 36% premium to the company’s closing price of A$0.55 on Friday. The company’s chairman, Peter Smedly, said the bid was “opportunistic” and that it undervalued the company and its growth prospects. Arrium shares rallied 25% yesterday to close at A$0.68 on news of the possible takeover.

Possibility of counter-offer?
Buying Arrium is a strategic move by Noble as it would give businesses including iron ore mines, steel manufacturing and distribution in Australia. As reported in Bloomberg, “the bidders, remain interested in working with Arrium to secure a deal”. Noble posted an announcement on SGX, suggesting that the matter is far from concluded.
 

Singapore Market Wrap

China's purchasing managers' index (PMI) weighs on regional shares

Singapore shares fell, largely in line with regional markets, after the latest survey of factory managers showed China's economy is seeing a seventh straight quarter of slowing growth. China's PMI stood at 49.8, falling short of expectations, with a PMI below 50 pointing at contraction. The STI ended the trading session down 0.08%, closing at 3057.86.

STI 3100MBeCW121031 (Q1AW) exercise level 3,100.*
STI 2950MBePW121031 (Q0ZW) exercise level 2,950.*

Singapore's Noble Group approaches Arrium Board with cash proposal
Singapore-listed commodities firm Noble Group Ltd said on Monday it is part of a consortium, Steelmakers Australia, that has made a formal approach to the board of Arrium Ltd to potentially acquire the Australian resources company. It is looking to acquire 100% of the issued share capital of Arrium for $0.75 per share by way of a scheme of arrangement.

Noble closed unchanged to end day-on-day at $1.325.

NobleGrpMB eCW130201(Q5OW) exercise level 1.40.*
NobleGrpMB ePW130201(Q8YW) exercise level 1.25.*

Ezra reinforces Its Asia Subsea Installation Market Share With Contract Win In Vietnam.
Ezra Holdings Limited announced that its subsea construction division, EMAS AMC, has been awarded a contract from Petroleum Technical Services Corporation Mechanical and Construction. The contract consist of the transportation and installation of facilities for the Dua subsea field, which will be developed as a subsea tie-back to the Chim Sao Field in offshore Vietnam. The contract value is approximately US$47 million and will commence in the third quarter of 2012.

Ezra rose 1.23% to close at $1.235 for the trading day.

Ezra MBeCW130603(Q8EW) exercise level 1.20.*

Overnight Market Wrap

Starting the week positively

Yesterday, the S&P rallied 0.3% dod, closing at 1444.49 after manufacturing data which may signal that global economies are showing signs of recovery.

In Europe, the manufacturing figure in September though still below 50, came in better than expected. The US manufacturing figure also beat the Bloomberg survey and unexpectedly expanded. The ISM US factory index rose to 51.5 this month, an above 50 reading may imply an expansion.

Last night, the Federal Reserve chairman said that policy makers do not expect the economy to stay weak through 2015 and that they pledge to sustain stimulus even after the US expansion gains strength.

Overnight Markets

Indices	Last	Change
STI	3060.34	0.0%
HSI	20840.40	0.4%
DJIA	13437.10	-0.4%
S&P 500	1440.67	-0.5%
Nasdaq	3116.23	-0.7%
China A50	7275.19	1.5%

Corporate News

Corporate Announcements

Noble Group Ltd part of the consortium Steelmakers Australia, has approached Arrium Limited (Arrium) regarding a cash proposal to acquire 100% of the issued share capital of Arrium for $0.75 per share by way of scheme of arrangement.

Earnings release dates:
Fri 12 Oct: SPH (4Q12)
Thu 18 Oct: SGX (1Q13)
Thu 18 Oct: Keppel Corp (3Q12)
Thu 25 Oct: NOL (3Q12)

Ex-dividend dates:
Tue 6 Nov: Olam ($0.05)