After a strong 1Q12, 2Q12 results for Singapore banks are likely to pale in comparison. Trading and investment income would likely slip while NIM is expected to remain flat at best. Muted trading income expected after strong 1Q12. Our analyst expects 10% earnings growth in 2012 to be intact with limited downside risks. Singapore banks are a safe bet but flattish ROE outlook may keep near term valuations range- bound. OCBC (BUY, TP: S$10.50) remains our preferred pick. Singapore's 3 banks contributed more than 90pts to STI's 330pts gain since early June. Between the 2 banks OCBC and UOB that DBSV Research covers, UOB has slightly exceeded our $19.50 TP and approaching Bloomberg consensus 12-mth target of $20.04.

Keppel Corp's 2Q12 results were above expectations on strong Property contributions and sale of investments. Weak O&M margin, however, disappoints. Catalysts will be from Petrobras and semisub orders. Outlook remains robust, with the return of semi submersibles orders to provide the next wave of ordering, given tight capacity. FY13F earnings were trimmed 5% on reduced O&M margin assumptions. Maintain BUY call and TP of S$13.20. We see Keppel Corp as a key beneficiary to ride the tightening rig market, with its solid execution track record and market leading position in jackups and semi- submersibles. Valuation remains undemanding at 12x PE with a dividend yield of 4.1%.

Frasers Centrepoint Trust reported a record DPU of 2.6 Scts for 3Q12. Operational performance stable, but expect acquisition catalyst only in the medium term. Maintain BUY, TP revised higher to S$1.93 (Prev S$ 1.76). Stock remains attractive for its defensive earnings profile and FY13/14F yield of 5.8-5.9%.

2Q12 results for Suntec REIT were sequentially lower but within expectations. Leasing activities remain strong for Suntec  Offices; pre-commitments for phase 1 of the new retail mall at 58%. BUY, TP raised slightly to S$1.61 (Prev S$ 1.58).

Heineken has made an offer to buy F&N's entire stake in Asia Pacific Breweries for S$5.1 bn. Heineken said it will offer S$50 per share for all of F&N's stake, which is S$5 more than the offer made by Kindest Place Groups for an 8.6% APB stake owned by OCBC and its insurance unit Great Eastern Holdings. F&N through its 50%-owned Asia Pacific Investment, has a 64.8% stake in APB and a direct 7.3% stake in the beermaker. Heineken, which owns the other half of Asia Pacific Investment, also has a 9.5% stake in APB.

SGX is raising the admission criteria for mainboard for the first time in more than a decade. The new criteria will be effective 10 August. This is aimed to improve attractiveness for large-cap stocks and industry brand- names and sharpen profile between Catalist and Mainboard companies. There will be no changes for existing listed companies. New Mainboard admission must have minimum IPO share price of S$0.50 and must meet 1 of the 3 criteria:

1. Have IPO market cap of at least S$150m if profitable last financial year and have 3-year operating track record

2. Have IPO market cap of at least S$300m if only have operating revenue in last financial year

3. Have at last S$30m consolidated pre-tax profit for last financial year and 3-year operating track record

There will be a grace period of 9 months from date for IPO companies which already have mandated advisors to obtain Eligibility to List status.

SIA Engineeringhas inked a new five-year contract worth $166m with Cebu Air. SIAEC will provide fleet management and maintenance, repair, and overhaul (MRO) services to Cebu Air. The carrier's fleet of 30 A320/A319 aircraft will grow to 48 as new A320s are delivered over the next five years. This latest contract brings the total revenue of SIAEC's contracts with the Philippine budget airline to $236m.

The Ascott Limited, Capitaland's wholly owned serviced residence business unit, has secured a contract to manage its third property in Chengdu. Ascott Raffles City Chengdu, which is scheduled to open in 2013, will offer 296 studio, one, two, and three-bedroom apartments.

China Automation Group expects to report lower 1H12 profits as compared to last year, as the majority of the projects related to national railways awarded to the group have either been suspended, slowed down or delayed. The group is also hurt by forex loss and high finance costs.

A rule change has been implemented that will make it easier for listed companies in Singapore doing business in China to achieve dividend tax savings. In particular, investment-holding companies with substantial stakes in Chinese businesses will now find it easier to qualify for a reduction in dividend-withholding tax from 10% to 5%. The move could result in hundreds of millions of dollars in tax savings for companies worldwide and encourage investment in China.

Better-than-expected corporate earnings continue to underpin US equities. IBM and EBay shares rose on after releasing results while Google shares also gained in after hours trade. Morgan Stanley shares fell after missing estimates. On the data front, initial jobless claims rose more than expected to 386k (consensus 365k) while June existing home sales rose less than expected to 4.37mil (consensus 4.62mil). In Europe, Spain's 10-yr bond yield edged back above the 7% mark following a bond auction.

Source: DBS