The recent rebound off 2930 for the STI is within our expectation, further bounces forward in the short-term capped at 3030; still in a year end lull period.

On the economic front, Singapore is expected to enter into a slow growth environment going into 2013. Growth will be below potential while inflation will be higher than normal, continuing the stagflation since 2011. With the expected slowdown in the domestic economy, we would prefer to go for stocks with exposure to the emerging economies or global.

These include stocks that are potential beneficiaries to a recovery in the Chinese economy - Capitamall Asia, HPH Trust, Midas, Sound Global and Wilmar, which we have highlighted earlier. On the global front, our picks are Keppel Corp and SembCorp Marine.

Boustead Singapore'swholly owned subsidiary, Boustead Projects, has clinched a $26m contract from Satair to design and build an integrated service repair, distribution and office facility at the 320-hectare Seletar Aerospace Park (SAP). The latest contract takes the firm's order book backlog to $314m.

Inflation eased to a lower-than-expected 4% in October, vs market consensus of 4.5%, a nd slower than September's 4.7%. October's inflation came in lower as accommodation and private road transport costs, which continued to make up two-thirds of overall inflation, rose at a more moderate pace. On a month-on-month basis, the CPI fell 0.2% in October, after rising 0.6% in September. Private road transport costs rose 8.3% in October from a year earlier, slowing from a 10.8% jump in September. Accommodation cost inflation was 6.8% in October, down from 7.7% in September. Stripping out accommodation and private road transport costs, the Monetary Authority of Singapore (MAS) core inflation measure fell to 2.2% in October from 2.4% in September. The government continues to expect inflation of slightly above 4.5% for 2012, and 3.5-4.5% in 2013. Core inflation, meanwhile, is expected to average around 2.5% this year, and 2-3% next year.

Industrial production index for October is on tap today and chance is high that it will be another disappointment. The headline number is expected to print a decline of 2.1% YoY.

That's about a drop of 1.0% compared to the previous month and following a 1.8% MoM easing in Sep12.

Source: DBSV