Singapore's non-oil domestic exports plunged 16.3% y-o-y in December, after falling a revised 2.6% in November, and also below market consensus for exports to contract 8.0% y-o-y. The lackluster performance from non-electronics exports, like ship parts and machinery, piled on a worsening decline in electronics shipments. Compared with the previous month, exports rose 1.8%, after contracting a revised 0.4% m-o-m in November. Electronics exports fell 19.1% y-o-y, after falling 16.5% in November, while non-electronics shipments sank 14.8%, compared with a 6.1% rise last month. In the non-electronics sector, pharmaceutical exports fell 11.5%, after growing 29.6% in the previous month. Shipments to the European Union, its biggest export destination, fell 7.3% y-o-y in December, compared with a 0.5% rise in the previous month. Exports to the US fell 27.7% on year after falling 7.0% in November. Exports to China slipped 1.2% after the previous month's 8.9% increase.

A modestly improving global economy and a firm Asian outlook, led by China's recovery, provide some tailwind for Asian airlines. More prudent capacity management, benign fuel price outlook, along with stronger demand, should lead to improved profitability for the sector. Tiger Airways should also see firm earnings recovery on stronger demand. Growth at Tiger Singapore will be key to restoring profitability in the near term. We continue to look forward to a turnaround in earnings for Tiger Airways group in the coming quarters. Maintain BUY with S$0.95 TP. SIA's prospects remain muted in a still soft global macro environment. Silkair has a good growth outlook whilst Scoot has potential, but losses at SIA Cargo are likely to continue to be a drag in 2013. Sale of stake in Virgin Atlantic would boost cash pile to over S$4bn net cash but questions remain over what SIA will do with its cash horde. Maintain HOLD with a TP of S$11.20 (1x FY13 P/B).

Downgrade Yangzijiang to HOLD as share price trades close to our TP of S$1.20, and also lower earnings and yield amidst a prolonged sector downturn. Shipbuilding outlook remains challenging while offshore penetration takes time. The proposed issuance of 330m warrants at RMB0.3072 (S$0.0605) may lead to a potential maximum dilution of 7.9% if fully exercised at S$1.50/share by 29 Apr 2016. There are better funding options in our view.

Midas's joint venture company, Nanjing SR Puzhen Rail Transport (NPRT) has won its first 100% low-floor tram project valued at approximately RMB338m. The contract is awarded by Suzhou New District Tramway, for the supply of 18 100% low-floor trams for the Suzhou National New & Hitech Industrial Development Zone Tramline, a light rail line that is currently under construction. Delivery of the trams is slated to take place in 2014 and is expected to contribute positively to the Group's financial performance for FY 2014.

Straits Trading's shareholders yesterday gave approval for the firm to purchase a further stake in WBL Corp by issuing new shares, paving the way for it to make a formal offer for other WBL shares it doesn't yet hold. Straits Trading has proposed to buy 64.02m WBL shares, or 23.61% of the firm, from Aberdeen Asset Management Asia and Third Avenue Management. This will be paid for with the 68.5m new Straits Trading shares to be issued, in a share swap of 1.07 shares for every WBL share. WBL shareholders will have the option of receiving either 1.07 new Straits Trading shares or $3.41 in cash - the average price of WBL shares on Nov 23 - for each WBL share they hold.

Mobile phone distributor mDR has incorporated a joint venture company known as MDR Myanmar in Myanmar with a paid up and issued capital of US$50,000. The new company will provide after-sales services of telecommunication devices to consumers in Myanmar.

Ntegrator International has secured new contracts worth approximately S$11.7m from Myanmar Radio and Television and the Viettel Group of Companies. Work on the new contracts is scheduled to be completed in 2013, and are expected to contribute positively to the Group's financial performance in FY 2013.

Swee Hong has secured a contract from Public Utilities Board worth approximately S$9.7m in relation to the proposed dredging of Sungei Sembawang. The commencement date of the contract is 22 January 2013 and the completion date for the Contract is 21 January 2015.

The Building and Construction Authority (BCA) expects demand to hit $26-32 bn this year through a strong pipeline of public sector projects. Mr Lee Yi Shyan, Senior Minister of State for National Development and Trade and Industry said the construction sector is having one of its longest growth runs since Singapore's independence, chalking up an average 10% growth annually between 2006 and 2012, and contributing 3 to 5% to GDP each year. Last year, the total value for construction contracts awarded was about $28.1 bn, he said, and "the growth momentum is likely to be sustained into 2013."

Around the middle of this year, Singapore telcos will together have to shell out a minimum of $360m for spectrum that they will require to run their fourth generation telephony network, also known as LTE (Long Term Evolution). The Infocomm Development Authority of Singapore (IDA) has set that figure as the reserve price for the spectrum that they would be auctioning in mid 2013. Since LTE has been built specifically with data in mind, it can offer speeds of around 75 megabits per second (mbps)

(which can go up to 100 mbps) as compared to speeds of up to 21 mbps that normal 3G services offer. IDA also intends to increase the spectrum that is available for 4G by putting as-of-now unused spectrum in the auctioning process.

The committee responsible for the expansion of Changi Airport appears to have deferred its decision on a third runway for the airport. The 2036 Steering Committee was due to make a decision on whether and how an existing runway, currently used by the Republic of Singapore Air Force, might be commissioned for co-use for civil aviation by the end of last month. Faced with increasing congestion, which is leading to flight delays as air traffic grows 5% annually, the committee has been looking into incorporating the military runway - located south-east of the existing Changi Airport complex - into its planned 1,000 hectare expansion of the existing 1,300 ha airport real estate.

In property news, a 21% strata interest in Orchard Towers comprising prime freehold retail and office space is up for grabs by tender, with an asking price of about $190m. For parties interested in just the retail space, owner Sinarmas is hoping to sell it at about $3,000 psf. For the office space, it hopes for a price just under $2,000 psf.

Source: DBSV