The stronger-than-expected US September industrial production adds to the recent string of better numbers that included ISM, initial claims, retail sales and consumer confidence. Stocks were higher on the hope that the recent data point to the US economy gradually picking up. In after hours, IBM and Intel shares fell in after hours trade after reporting results.

The STI should start the session higher but traders will be watchful of the weaker-than-expected Singapore September NODX and the likelihood of the US market unable to pull off a hat-trick third day gain. Near-term upside for the STI still stands, not exceeding 3088 with 3072 another resistance pt.

Singapore's non-oil exports unexpectedly declined in September as electronics shipments fell more sharply than in previous months. NODX fell 3.4% y-o-y, after falling a revised 10.7% in August, and below market expectation of +2.3% y-o-y. Compared with the previous month, exports rose 1.6%, vs consensus forecast of 4.4% expansion and 9.1% m-o-m contraction in August. Electronics exports declined 16.4% y-o- y, after falling 11.0% in August, while non-electronics shipments grew 4.2%, reversing a 10.5% fall last month. In the non-electronics sector, pharmaceutical exports fell 3.0%, after falling 3.2% in the previous month. Shipments to the European Union, its biggest export destination, fell 15.7% y-o-y, less severe than a 28.7% fall in the previous month. Exports to the U.S. fell 7.2% y-o-y after growing 0.7% in August. Exports to China, however, rose 1.8% after the previous month's revised 4.5% decline.

STX OSV Holdingsis expecting more offshore subsea construction vessels (OSCV) orders by year-end. Our analyst has raised FY12 order wins forecast by10% to NOK11bn. The group is also well positioned to capitalise on the tight Brazilian capacity, supporting growth in its order intake across FY13/14 to NOK12.5bn/NOK14.0bn. FY12/13 earnings raised by +1%/+15%; and earnings are expected to recover from FY14F. Maintain BUY, TP raised to S$2.10 (Prev S$ 2.00).

We believe that downside is limited on the possible stake sale by the parent. From latest media reports, we understand this could be completed by late October for between S$1.60-1.66/share. We like STX OSV for its undemanding valuation, its market leading position as a builder/designer of large complex and highly customised OSVs, and its strong execution track record.

Keppel Land added a fifth residential site to its Chengdu portfolio with a RMB680.4m acquisition of a China-domiciled real estate company that owns a 28.7-ha residential site in Xinjin County in Sichuan province, which is to be developed into landed homes.

Asian Micro is placing 46.2m new shares at an issue price of S$0.013 per share. The issue price represents a premium of 0.071 Singapore cents to the last done weighted average price. The proceeds will be used for the full settlement of debt.

A 99-year leasehold residential site along New Upper Changi Road has drawn a higher-than-expected top bid. The land parcel sitting next to Tanah Merah MRT received 11 bids in all. The highest offer came from Keppel Land unit Sherwood Development, which bid $434.6m or $791.42 psf ppr. This bid was 17% above that for a nearby plot in Tanah Merah Kechil sold to Fragrance Group and World Class Land in August and exceeded market expectation of between $630 and $680 psf ppr. KepLand said it plans to develop about 700 units measuring between 500 sq ft and 1,400 sq ft in one- to four-bedroom configurations when it secures the site.

Based on this land cost, the breakeven cost for this development is expected to be about $1150-1200 psf. Based on the recent transactions which averages at around S$1,280 psf, and its close proximity to the MRT station, we reckon the project could fetch up to an ASP of $1300-1350psf. This would translate to a PBT margin of c10% and boost Keppel Land's RNAV by 1ct.

Source: DBSV