Optimism about an improving macro environment and fund flows from bonds to equities should continue to underpin equity markets. This even as investors faces a weak Singapore domestic economy that is also plagued by high inflation; and the near-term uncertainty from the end-Feb/early-Mar US debt ceiling deadline.

We believe 2013 could be another strong year for Offshore & Marine companies as sustained high oil prices continue to underpin investment into the sector. Taking the cue once again from oil majors, we note stable to increasing capex budgets for 2013, as they face an urgent need to reverse declining production volumes. Oil services & equipment providers are to outperform rigbuilders. Recovering earnings (ASL, Ezra, Jaya), sustainable earnings growth (Ezion, Jaya), and steady contract wins (Ezion, Ezra) leading to improving earnings visibility are expected to be the key drivers of outperformance. Singapore rigbuilders, Keppel Corpand SembCorp Marine, are key beneficiaries of an expected return of semisub orders.

4Q12 results for CapitaMall Trust in line with expectations. FY13 earnings are expected to be driven by full contributions from JCube, Bugis+ and The Atrium. Low gearing and strong balance can be utilised to drive inorganic growth. Maintain HOLD at an unchanged TP of S$2.15.

4Q12 results for Cambridge REIT in line. NAV has been raised by 4.4% to S$0.64. We believe that further NAV expansion is possible with its recent acquisitions (54 Serangoon North Avenue 4 and 3 Tuas South Ave 4), which are purchased at attractive valuations. Rental reversions in 2013-2014 are likely to remain stable. BUY call maintained, target price is nudged up to S$0.75 after taking account the latest announced acquisitions. CREIT continue to offer an attractive FY12-13F yield of 7.3-7.7%.

Mapletree Logistics Trust reported stable 3QFY13 result. Portfolio resilient; 17% positive rental reversion led by robust demand in Singapore and Hong Kong. Future acquisitions are re-rating catalysts; maintain BUY, S$1.22 TP offers 12% total return.

Singapore Post is buying a majority stake in a freight-forwarding company for $60m to help grow its logistics business. Following the acquisition, SingPost will hold a 62.5% stake in Famous Holdings (FH). Both companies have also agreed on an option to transact the remaining 37.5% stake at the end of 2015, at a price to be determined based on an agreed formula. FH is a Singapore-based company engaged in non-vessel operating common carrier operations, total logistics and supply chain management services. It has a regional network with offices in six countries, namely Singapore, Japan, Australia, China, Malaysia and the US.

Beng Kuang Marinehas entered into an agreement for the proposed sale and leaseback of a leasehold property at Tuas View Square for a proposed cash consideration of S$14.5m. The property is currently used by the group for warehousing facilities for its Supply and Distribution Division, which supplies mainly hardware equipment and tools to the marine and offshore oil and gas industries.

Chosen Holdingsis likely to report a loss for the first half of the current financial year. Its Singapore operation incurred losses due to lower revenue. Orders for data media storage products weakened due to the drop in global demand for personal computers. Demand for medical devices from European customers was also soft due to the sluggish European economy. Profitability of the Malaysian operation continued to be affected by high testing cost on new products.

Fabchem China is expected to report significantly lower profit for the third quarter of FY2013, i.e the period from 1 Oct 2012 to 31 Dec 2012 as compared to 3Q12. This was mainly attributable to lower market-driven prices of ammonium nitrate and the increase in raw materials prices for 3Q13.

In property news, a bungalow plot in District 11 has been put on the market for auction sale next month, and is expected to fetch more than $23m, said marketing agent Savills. The 15,184 square foot site - 8 Chee Hoon Avenue -is easily accessible and has a 37-metre frontage. In 2012, the average price of GCBs surged 12 per cent over 2011 to $1,376 per square foot.

Source: DBSV