US stocks started the current week lower ahead of the slew of economic data releases ahead and as investors await the outcome of the FED and ECB monetary policy meeting. Expectations have built up on the August 2nd ECB policy meeting after ECB President Mario Draghi said last week the ECB will do whatever it takes to preserve the Euro. If the ECB disappoints, financial markets could react.

The STI rose above the 3025 immediate resistance yesterday but we remind that the index will have to face the even more important resistance around 3100. In other words, STI is looking more tired as it attempts to claw higher and technically, we still look for a pullback to the short-term support at 2930.

Small mid caps (SMCs) are susceptible to profit taking after recent market strength. Exit stocks with earnings risks as Q2 reflects weak near term demand and cautious outlook. Stay out of tech stocks given volatile and uncertain outlook. Lock in gains of stocks which have rallied close to their fundamental target prices. In the absence of further re-rating catalysts, we recommend taking profits on Wheelock, Raffles Med and Super Group. Not surprisingly, REITs are among the outperformers in this market. However, in view of limited upside to target prices and lack of strong re-rating catalysts, we would also lock in gains on CDL Hospitality Trusts, Cache and Ascendas India Trust. Take advantage of eventual pullback to collect stocks with strong and visible catalysts. Our bottom-up picks are Bumitama, Tiger Airways and Silverlake.

Our analyst expects Indofood Agri Resources' 2Q12 earnings to sequentially ease 7% to 16% due to weaker CPO prices. TP revised to S$1.60 from S$1.65; as he expects Indonesia's palm oil refining spreads to gradually taper off after FY14F ' on increased competition from new refining capacities entering the market then. He expects IndoAgri's profits to improve in 2H12. This would be backed by higher CPO prices, a seasonal uptick in CPO output; robust refining margins and a seasonal ramp up in sugar production volumes. BUY rating reiterated, accumulate on weakness.

2Q12 net earnings for Sakari Resources were below expectations, dragged down by one-off tax charges. ASPs held up in 2Q, despite sliding coal prices. While volumes from Jembayan mine should ramp up significantly in 2H12, the key to earnings will still be coal prices.  Benchmark Newcastle coal prices have been in the US$80-85/ton range in recent weeks, and upward momentum is lacking, given abundant supplies and macro uncertainties. This could cap share price performance in the near term, despite seemingly attractive valuations. We will provide more details after briefing today.

Underlying 1Q13 net profits of S$36.6m for Singapore Post were above estimates; 1.25Scts DPS in line. Operating costs are still rising faster than revenues. Business transformation is underway but earnings turnaround could take a while. Maintain HOLD for 6% yield; TP S$1.04.

Luye Pharma Grouphas been suspended as its public float fell below 10% after its majority shareholder raised its stake to 92.63% as a result of married trades made last Friday. Luye Pharmaceutical Investment had acquired about 75m shares at $1.30 apiece in married trades. This took its stake from 77.41% previously to 92.63%, triggering the suspension.

Dapai Internationalis expected to record a net loss for 2Q12 and half year (1H12) ended 30 June 2012, due to the substantial downward pricing adjustments for its products in order to remain competitive.

GOME Electrical Appliances is expected to record a net loss for the six months ended 30 June 2012, primarily due to a drop in the Group's sales revenue and loss attributable to the e-commerce business.

Trek 2000 also issued profit guidance. The group is expected to report a loss for 2Q12 and the six months ended 30th June, 2012 due mainly to a one-time write-off of ASIC chips due to a design flaw. The group has taken action and rectified the design flaw.

Courage Marineexpects to record a greater net loss for 1H12 as compared to the three months ended 31 March 2012. The expected loss was mainly attributable to (i) the cumulative losses on disposal of vessels arising from the disposal of 4 of the Group's older vessels and (ii) the continuing challenging operating environment for cargo shipment, necessitating provisions for impairment losses of the group's remaining vessels.

Source: DBS