US and European stocks fell ahead of the FED and ECB policy meetings this week, hardly surprising considering the built up in expectations late last week. Our economist thinks it's still too early for the FED to pull the trigger on additional stimulus. It was only two meetings ago that they raised the growth outlook for 2012 and while Europe has made a lot of headlines and remains a big risk, US growth isn't appreciably different from April when officials said things were looking up.

Our economist added that would be easier to vote for more stimulus if there were something more visible dramatic to hang the decision on. The FOMC is a slow moving vehicle. Our economist places 30-for/70-against odds for Fed action today.

2Q12 earnings for Sakari Resources were below on one-off spike in taxes. ASPs are set to decline sequentially, while production ramp up may not be as strong as expected earlier. Management has guided for a slower ramp up amidst the low return environment. With coal price recovery likely delayed,the slower production ramp up at Jembayan, and a higher effective tax rate, our analyst has cut FY12/13 EPS estimates by about 10-11% and downgraded the stock to HOLD with lower TP of S$1.40 (Prev S$ 1.80). Potential dividend yield of ~6% provides downside support but the lack of momentum in coal prices could cap share price performance in the near term.

Cambridge Industrial Trust reported an improved set of 2Q12 results. Acquisitions and asset enhancement initiatives are expected to underpin earnings growth in the coming quarters. Portfolio rebalancing continues, and redeployment is key. The manager has 4 properties (worth S$198m) for sale ' amongst them are two properties, valued at S$101.6m, which will be compulsorily acquired by SLA in Jan 13. We understand that plans are underway to redeploy capital towards new acquisitions. Maintain BUY, TP raised to S$0.65 (Prev S$ 0.58). CREIT continues to offer attractive prospective FY12-13F yields of 8.0-8.4%. Downside risks to our estimates hinges on the slower than projected deployment of divestment proceeds.

CapitaMalls Asiais acquiring two projects in Japan and Qingdao, China. The Japan deal is immediately earnings accretive. With the latest purchases, CMA's gearing is likely to move to a still very manageable 30% by year-end from 25% in 2Q12. Our analyst has raised FY12 and FY13 numbers to factor in these latest acquisitions as well as 1H12 results. Maintain Buy, TP raised to $2.08 (Prev S$ 2.06).

Sunpower Grouphas clinched a RMB55.1m deal with Beijing Huatai Runda Energy Technology for the provision of four sets of waste heat boiler systems. These orders will be partially delivered this year and is expected to boost its FY2012 performance.

1H12 loan growth still holding up but trends are clearly moderating. Jun-12 loans grew 21% y-o-y, a steady declining trend when compared to earlier this year (Jan- 12: 28% y-o-y). But this is within expectation. Banks have already guided for a slower trend into 2012. Q-o-q, loan growth is holding up at 4.6%, following an incremental 1.7% m-o-m growth in Jun-12. Business loans still led growth, while consumer loans remain fairly stable. YTD Jun-12 loan growth stood at 7.6%. With expectations of a slower 2H12, our analyst believes our 12% 2012 loan growth forecast remains intact. Deposit growth still lagged loans at 8% y-o-y and literally flat q-o-q and m-o- m. YTD deposit growth was only at 2%. Loan-to-deposit ratio further crept up to 92%, the highest since Jul-01.

In property news, a tie-up between Fragrance Group and World Class Land pipped CapitaLand unit Areca Investment by 1.8% to emerge as the highest bidder for a plum 99-year leasehold private condo site diagonally opposite Tanah Merah MRT Station that drew a massive 13 bids. They have submitted a joint bid of S$285.2m for the 13,998.5 sqm site. The break-even cost is about $1,000 psf and launch price could be about $1,300- 1,400 psf on average.

China announced a jump in planned railway spending. The Ministry of Railways, the nation's largest corporate debt issuer, plans to spend RMB470bn (S$91.8bn) on railroads and bridges this year, according to a bond prospectus issued on Monday. The new target exceeds last year's RMB461bn in spending. At the same time, Chinese officials are signalling the slowdown isn't deep enough to warrant a return to the RMB700bn level of railway construction funds in 2010.

Source: DBS