Noble and Olam have underperformed the FSSTI by 32-35% since Jan11. With Chinese GDP growth bottoming out in 3Q12 and now expected to accelerate next year to 8.5% from 8% this year (according to our DBS Group economists), the macro backdrop for supply chain managers is definitely looking up. In addition, with several commodities now trading near their marginal cost of production, the risks of a negative shock to earnings from a severe price correction has receded. Noble is set for a re-rating on continued improvement in earnings and possible M&A. FY12-14F profits raised by 10-12%, given the expansion into higher margin metals trading and prospects of an improved Chinese economy next year.

Maintain BUY, TP lifted to S$1.60 from S$1.30 as we roll forward to FY13F. Noble is due to report its 3Q12 results on 8 Nov. We expect a marginal lift in profit to US$146-152m from US$144.9m in 2Q12. Olam, on the other hand is looking more subdued near term as it readjusts its cost base after a significant period of investment. FY13F-15F core profits were raised by 5-22% on new coffee plantations and Indian sugar capacity. We are cautious on Olam's near term share price performance as we expect 1QFY13 results on 14 Nov to be weak, down 21-27% y-o-y due to the impact of higher overheads experienced in 4Q12. Maintain HOLD, TP: S$ 2.00 (Prev S$ 1.80).

Golar LNG has announced that it will convert an existing Moss LNG carrier at Keppel Shipyard into a floating liquefied natural gas vessel (FLNGV). Along with this, it has options to convert two additional vessels with Keppel under the same agreement. Golar LNG is one of the world's largest independent owners and operators of LNG carriers. Note that at this point in time, Keppel Corp has yet to make an official announcement on this project. While no contract value has been disclosed, we believe this project could be worth >US$500m, significant enough to move the needle for non-Petrobras order wins, which stands at S$2.5bn YTD. This is a significant breakthrough for Keppel. FLNGV's are massive projects and have so far been awarded to Korean shipyards. We believe this award by Keppel underscores its capability and track record - it has previously converted two of Golar's Moss LNG carriers to Floating Storage and Regasification units (FSRUs), one of which was the world's first FSRU conversion. No change to our Buy call and S$12.65 TP for Keppel.

Hyflux's 3Q12 earnings fell short although margins have improved. Hyflux has a strong bidding pipeline but it needs more contracts wins to strengthen earnings visibility going forward. FY12/13F earnings cut by 16%/17% on lower margin assumptions. Maintain Hold on limited upside to lower TP of S$1.39 (Prev S$ 1.45).

ARA Asset Managementreported lower 3Q12 net profit y-o-y due to one-off gains recorded last year. Potential REIT acquisitions in 2013 could compensate for Dynasty REIT's disappointment. BUY maintained, TP S$1.70 (Prev S$ 1.72). ARA's stable, recurring and visible income business model is especially attractive in this current uncertain economic backdrop.

Cambridge Industrial Trust's 3Q12 results represent 6 consecutive quarters of growth. CREIT has made cS$220m acquisitions YTD, more expected to come. Maintain BUY, TP S$0.71 (Prev S$ 0.67).

Global Logistic Propertiesis sponsoring the establishment of a J-REIT through the sale of 30 of its 68 assets for JPY209b (US$2.6b). This will boost fee income platform and recycle capital. Maintain Buy.

OKP has secured S$39.8m contract to construct Seletar Airport's north-east aircraft parking apron, associated taxiways and ancillary works. The project is scheduled to start now and last till Dec 2014. With this new order, OKP has won S$125m of orders to date. This is within our FY12F order win expectations of S$137.4m. FY12F order book is now increased to S$385.9m, lasting till 2014. Maintain Hold and TP: S$0.49.

AusGroup has secured fabrication, supply and installation work with CSBP Limited for the prilling plant upgrade associated with its ammonium nitrate expansion project. With this contract award, AusGroup's orderbook now stands at AU$306m.

PEC has successfully clinched four new contracts worth approximately S$30m in total from three existing clients. The latest wins will boost PEC's orderbook, which stood at S$258m as at 30 June 2012, excluding maintenance projects. The above contracts are expected to contribute to the group's earnings for FY Jun 2013.

China's Purchasing Manager's Index (PMI) for the month of October rose to 50.2 against 48.9 in September. It was the first time the reading had crossed 50 since July and backed the view that activity is gathering momentum in the world's second biggest economy. Separately, HSBC also released its PMI data which edged up to 49.5 points last month from 47.9 in September. The index published by the investment bank is traditionally lower as it takes into account sentiment in China's small and medium enterprises (SMEs), which are more export-oriented and have less access to credit and government support than state- owned enterprises.

US markets rebounded as the ISM manufacturing (actual 51.7, consensus 51) and consumer confidence (actual 72.2, consensus 73) data releases pleased investors. US October employment data will be released tonight. Non-farm payrolls consensus expectation is 125k while the unemployment rate is seen edging a tat higher to 7.9%. Separately, China's Oct manufacturing PMI edged back to expansion territory of 50.2 from 49.8.

Source: DBSV