Yongnam won S$90 million contract

Dow dropped around 50 points last night, not too bad in my opinion. I was half expecting a bigger correction after citigroup report of more losses due to subprime AND the delay of the investment plans by China in HK. STI today went up 12 points to close at 3683 with a volume of 2.2 billion.

STI twice tested intraday support at around 3660 but it didn't gave way. It was somewhat helped by HK sudden reversal from negative region to +500 points. Ali baba is the major company, haha! Its warrants that debut today went from 0.320 to 0.775, representing a gain of nearly 200% in a day. Scary huh? That's the world of warrants for you - where the whole life cycle of a stock can be experienced in a single day.

Some news to share:

1. Long awaited contract wins came along - this time it's for Yongnam. Yongnam won S$90 million contracts for Marina IR, formula 1 and orchard turn projects. As far as I know, orchard turn project (ion orchard) is not new. Even walking past the site I can see Yongnam supplying the steel struts for its structural works. It's just strange that they choose to announce it now, unlike other companies which are normally more forward looking. Conservative nature of its management?

Maybe they purposely plan to put the contract wins near their XR so as to encourage more people to take up their warrants. Hmm...that would be smart indeed.

Here's the project timeline:

a. For the IR, Yongnam finish the hotel tower by 2nd half 2009 and then the northern podium by 1st quarter 2008.

b. For the F1, they are tasked to construct a 3 storey complex at republic boulevard, expected to be completed way before 28 Sept 2008 (that's the date for the F1 race in singapore)

c. Orchard turn project will be completed by 2nd quarter 2008

Some things to think about: why is the contract value for the 3 projects so low? 90 million isn't exactly that big you know. Hmm...can't help but to compare with CSC contract of 280 over million. Interesting...wonder who's margin is higher?

2. Swiber had a new direction - exciting! Firstly, they incorporated a new subsidiary company - swiber offshore drilling pte ltd. This company carries out deepwater drilling business.

Secondly, Swiber targets deepwater drilling business as their new engine of growth. They ateamed up with offshore oil and gas veteran to incorporate Swiber offshore drilling to spearhead the group's deepwater drilling business.

Swiber's main revenue and earning drivers is currently offshore EPCIC providers. This business is primarly in the shallow water. They wanted to focus into deepwater drilling business as their new engine of growth over the next few years. Their reason is that as energy demand grows and most of the easy oil (which are found in shallow waters) had been found, logically the next place to look for oil will be those in the deeper regions. As usual, Swiber likes to capitalise on industry veteran to gain entry into new areas and this is exactly what they did. They hired this Mr Glen which is a prominent industry veteran to help Swiber group in this new business. I like their active approach :P

Dow haven't opened yet. Their daylight saving is now on, so their opening will be at 1030pm instead of 930pm. Europe all green though :)