The shipping sector could continue to be in the doldrums for another 2-3 years while excess supply is absorbed by the market. Container shipping is still poised to recover earliest, but volume growth rate expectations are now pegged to a new lower normal, and the boom years of the last 2 decades seem well past, both for containerised trade and bulk cargo, as the developed world continues to deleverage. We maintain our HOLD call on NOL (TP: S$1.23). Shipyards, unfortunately, will continue to face trying times. Stronger yards like Yangzijiang (BUY, TP: S$1.55) should be able to weather the storm better than smaller private players in China, and potentially benefit from large-size containership orders once the tide turns.

As anticipated earlier, Tiger Airways has signed a MoU with SIA's medium and long haul budget subsidiary, Scoot, to offer joint itineraries on their websites from October onwards. In the initial phase, customers will be able to book flights from Sydney and Gold Coast in Australia (operated by Scoot) to select destinations in SE Asia (operated by Tiger), via Singapore, on a single ticket. Load factors for Tiger Singapore should get a boost, and hopefully yields as well. However, our analyst is keeping his estimates unchanged for the moment, as the partnership will take time to ramp up and most of Tiger's near term value addition is largely driven by the operational turnaround in its Australian operations. Maintain BUY. Improving earnings over the next few quarters and fresh ideas to drive Tiger's growth story forward should help the stock to re-rate. Tiger remains a turnaround play. The stock has been inching up albeit at a gradual and steady manner. Near-tem support is at the current level of $0.76. Impact to SIA should be negligible, as Scoot is only a small part of its portfolio, and earnings in start-up phase are not likely to contribute.

Biosensorsannounced that it has extended its existing global ex-Japan licensing agreement with Terumo Corporation for BioMatrix technology till December 2014. The original licensing agreement was first entered into in October 2003. Currently, Terumo has two licensing agreements with Biosensors for use of BioMatrix technology - 1) in markets outside Japan; and 2) in the Japanese market. The first licensing agreement was set to expire this year, while the Japan market agreement is due to expire in 2016. The new extension has similar terms to that of the original agreement entered into in 2003. This renewal is within our expectation and we view the partnership as mutual. No change to our earnings estimates; maintain BUY and TP S$1.57.

CSE Global has secured an order to engineer, procure and construct a Telecommunications Systems for a LNG Onshore Facility in Darwin, Australia. This order is one of a number of large orders that CSE have been tracking over recent months. The group has also recently been awarded two Mental Health projects in the UK. Total value of these projects is approximately S$33m. These projects will have a positive impact on CSE's profit for the 2012 and 2013 financial years.

Metro Holdingshas acquired a mixed development site in the new central business district area of Nanchang, Jiangxi province, China, for S$375m, together with Hong Kong- listed Chinese property developer Top Spring International. The 269,454 sq m leasehold land parcel in Honggutan New District has a plot ratio gross floor area of 795,000 sq m. Metro and Top Spring plan to develop a large, upscale urban mixed development - including commercial, office, residential and entertainment components - on the plot.

URA released 3Q12 residential property price flash estimate that showed a 0.5% q-o-q increase. The strongest showing was in the Outside Central Region (OCR) which saw prices ticking up 1% q-o-q while those in the Rest of Central Region (RCR) showed a 0.7% sequential improvement. Prices in the Core Central Region were the weakest with a 0.2% expansion. Cumulative price improvement for the 9M YTD is a positive 0.8%. HDB resale prices rose 2% q-o-q, bringing 9M increase to 3.9%. We expect policymakers to remain watchful amid the low interest rate environment and the new supply coming onstream, which will likely cap significant upside in property prices. Our current expectations are for prices to trickle down modestly by 5% pa over the next couple of years.

In property news, Villa Des Flores, a freehold development sitting along Whitley Road, is being re-launched for collective sale by tender with its asking price of $165m, unchanged from its previous launch in June. The cost of the 104,370 sq ft site for landed housing works out to a land price of $1,581 psf. No development charge is payable.

IATA has raised profit outlook for world's airlines. It now expects the airline industry to make a net profit of US$4.1 bn this year, up from an earlier forecast of US$3 bn but still less than half the US$8.4 bn achieved in 2011. IATA also said in its first forecast for 2013 that industry profits will rise further next year to US$7.5 bn, helped by passenger traffic expansion of 4.5% and cargo expansion of 2.4% as global economic growth quickens to 2.5% from an expected 2.1% this year. Profit margins will remain razor-thin at 1.1% in 2013 versus an expected 0.6% in 2012.

China's official manufacturing Purchasing Managers' Index improved slightly to 49.8 in September from 49.2 in August, but still languishing below the key 50-point level. A sub-index for new orders crept back towards the 50-mark, hitting 49.8, its highest point since May, while the output sub-index also strengthened to 51.3.

US stocks rose after the ISM manufacturing index for September returned to expansion territory of 51.5, better than consensus estimates for a 49.7 reading. Sentiment was also lifted after FED Chairman Ben Bernanke renewed a pledge to sustain record stimulus even after the U.S. expansion gains strength. This is a good start to the data heavy weak that culminates with the September job numbers. Consensus calls for non-farm payrolls to improve to 115k from 96k while the unemployment rate is seen inching a notch higher to 8.2% from 8.1%.China's September PMI also improved to 49.8 from 49.2 the previous month but still remained at slightly below expansion territory.

Source: DBSV