Singapore's 3Q GDP contracted 1.5% q-o-q, below consensus estimate of -1.0% and compared with an upwardly revised 0.2% increase in the second quarter. The contraction was due to lackluster manufacturing performance, particularly in the electronics sector. With the upward revision to the second quarter figure, the economy avoided meeting the technical definition of a recession, defined as two consecutive quarters of sequential contraction. On a y-o-y basis, the economy is estimated to have expanded 1.3%, just beating consensus of 1.2% increase. GDP rose a revised 2.3% y-o-y in 2Q.

Output in the manufacturing sector rose 0.7% y-o-y in 3Q compared with a 4.6% expansion in the previous quarter. Services sector output grew 1.1% y-o-y, while the construction sector expanded 8.6%. On a q-o-q basis, the manufacturing sector contracted 3.9% while the construction sector eased 7.5% and the services sector was marginally up 0.1%.

Investors are unlikely to be excited about the Singapore economy escaping a technical recession in 3Q as this is only because of the upward revision in the 2Q GDP number. The fact remains that growth has slowed. But what can lend temporary support to the STI is that MAS has decided to stand pat on monetary policy, leaving unchanged the SGD NEER appreciation pace instead of an earlier anticipated tweak to allow for a more gradual appreciation. This unchanged stance alleviates concerns about funds outflow from the currency angle.

STI has started to bounce around the 3020 level after falling nearly 90pts this week. The bounce should head to 3050 or even cross but not exceed 3088. It is likely that the index has started to consolidate the 400pt rally from 2700-3100 since June. Post current bounce, we do not rule out another decline to 2950 in coming week(s) given the continued concerns about global growth slowdown and as the traditional Nov-Dec year-end lull period approaches.

Myanmar is a land of opportunity with its abundant natural resources, cheap labour and attractive 60m-strong consumer market. Investment is not without risk and delays, but positive developments on the ground should drive near term growth in some areas. Despite already performing exceptionally well, 'Myanmar proxies' should continue to drive investor appetite, on positive news flow. With limited proxies in Myanmar, we pick Yoma Strategic, Super Group and Siam Cement (listed on Stock Exchange of Thailand). At the moment, foreign investors have limited access to Myanmar (no stock exchange, no foreign ownership of property) other than private equity or via regionally listed stocks with Myanmar exposure. We like Yoma's exposure to Yangon's property market and Super's direct access to the country's consumer needs. We are positive on Siam Cement

as it is well positioned to benefit from strong cement demand in Myanmar. Also interesting is Aussino'spending RTO, which would hold the gas station operations of Max Myanmar Group of Cos (Myanmar's 3rd largest conglomerate).

The Malaysian Cabinet is due to meet today to mull changes to the country's palm oil policy. Today's meeting is likely to focus on reducing inventories by raising the duty-free export quota. A potential jump in CPO exports may depress near term CPO prices, but pain should be short-lived. If status quo is maintained, CPO inventory will climb further and weak CPO prices linger. A new CPO export tax structure may be introduced, but possibly lower than Indonesia. Mewah and Wilmar are the main beneficiaries of bigger change in export tax.

Tiger Airways announced two key management appointments - Mr. Ho Yuen Sang as Managing Director of Tiger Airways Singapore and Mr. Alexander Knigge as Chief Commercial Officer of the Tiger Airways Group. Mr. Ho replaces Mr. Stewart Adams, who will be leaving at the end of 2012. He brings with him 26 years of experience in the aviation sector, having last held the position of Chief Operating Officer at Jetstar Asia, another major budget airline in the Asia Pacific region. The other appointment at the Group level is that of Mr Alexander Knigge, who will be Chief Commercial Officer (CCO) of the Tiger Airways Group with effect from 1 December 2012. This is a new position and follows a renewed focus on rejuvenating the brand through targeted marketing strategies, as outlined by the new CEO recently. Mr. Knigge also comes from the Jetstar stable. We believe these appointments add new layers of experience and a more settled look to the senior management team, and should be positive for the airline as it attempts to chart a turnaround course and follow new growth strategies in future. Maintain BUY with a TP of S$0.90.

SembCorp Industries'urban development business unit, has signed a JV agreement to co-develop a residential project, Gateway, in Binh Duong province, Vietnam. Its partner, Vietnam Singapore Industrial Park Joint Venture (VSIPJV), is the developer of the Vietnam Singapore Industrial Park (VSIP) projects across Vietnam. The total project development cost is estimated to be US$165m. Since the project is to be built in tandem with demand, investment will be over several phases from 2013 and could stretch over eight years or more. This transaction is not expected to have a material financial impact this year but it demonstrates SCI's continued effort to grow Urban Development into its third growth pillar, after Marine and Utilities, over time. Presently, this division accounts for only 5% of FY11 group profits.

Global Logistic Properties has signed a new US$1bn credit facility with China Merchant Bank. The 10-year, secured credit facility provides for borrowings at a preferential interest rate for up to US$1bn for onshore and offshore funding requirements for the company's development needs in China.

In property news, Forward Land emerged as the highest bidder in a state tender for a plot at the corner of Jalan Sultan and Victoria Street. The offer for the 0.84 hectare site, zoned for hotel development or commercial and residential development, came from the Choo family, which has a stable of hotel brands that include Hotel 81, Value and V. Its bid of $331.3m, or $993.71 psf ppr, pipped the one from a Hoi Hup-Sunway tie-up, which at $303.7m ($910.77 psf ppr) was 8.3% lower. The tender drew nine bids in all.

Source: DBSV