The just concluded results season led to only modest change to STI's 14.13x (Ave) forward PE levels. Assuming STI continues to stick around the Ave 12-mth forward PE line, it should head for 3450 by end-June and 3600 by year-end. That's an average pace of 45pts/mth, much more gradual than the c.145pts/mth momentum that lifted it from 2945 in mid-Nov last year to 3320 by 4th Feb. While STI's major rising trend stays intact, we think a short-term consolidation has likely started that can resulted in a further dip to 3207 in coming weeks before the rising trend continues.

Hotel room rates in Singapore climbed to a record high, coming in at an estimated $261 for 2012 as a whole and Singapore's average rate among the priciest in the region. Those who stayed in luxury hotels here paid an average room rate of $428 last year. The hospitality industry closed the doors on 2012 with an estimated $2.8 billion in room revenue, up 5.9% from 2011. After slumping to $190 in 2009, the average room rate (ARR) has been growing steadily in recent years, increasing from $218 in 2010 and surpassing pre-crisis levels to hit $247 in 2011. ARR jumped further to $261 last year and although the average occupancy rate (AOR) was flat, it still registered a respectable 86%. This puts 2012 revenue per available room (RevPAR) - an indicator of performance - in the region of $226, up from $214 in 2011.

Far East Hospitality Trust has announced that they have obtained BBB- investment grade rating by Fitch. With this rating, the trust will be empowered with greater financial capability to increase its aggregate leverage limit to a maximum of 60% or a potential debt headroom of S$600m, allowing the trust to be opportunistic in executing acquisitions without its previous constraints of a c35% gearing limit (current gearing 29%). In the near term, we look forward conclusion of its negotiations (non-binding MOU) with Straits Trading Limited on the acquisition of Rendezvous Singapore and its accompanying Gallery Wing, of which we have yet to factor in this acquisition given the lack of financial details. While we estimate that the trust has the financial capability to fully debt-fund this acquisition, we believe that the manager could look to a fund this proposed acquisition through a mix of debt/equity given that FEHT is trading at c1.15x P/BV with low implied cost of capital of c5.0%.

Silverlake Axishas secured a new software and services contract from Hong Leong Bank, Malaysia to implement an Enterprise Payment Platform (EPP) Solution. The contract is expected to contribute positively to the Group in the current and next financial year.

SIIC Environment Holdings has been awarded an engineering, procurement and construction contract to a desalination system project in Guangdong Province, PRC. The total value of the contract is approximately RMB 80m and is expected to be completed in middle of 2014.

Advanced Systems Automation is placing 100m new shares at an issue price of S$0.0189 per share, a discount of approximately 10.0% to the last weighted average price. The net proceeds of about S$1.9m will be used for general working capital purposes.

EMS Energy is placing 60m new shares at S$0.042 per share, a discount of approximately 3% to last weighted average price, to raise gross proceeds of about S$2.5m. The proceeds will be used for the funding of the Group's order book and for other general working capital purposes.

China's non-manufacturing purchasing managers' index (PMI) stood at 54.5, down from January's 56.2 and the slowest pace of expansion since Sep 12. Although a five-month low, the PMI reading indicates that the services sector is still experiencing growth. The PMI new orders sub-index fell to 51.9 in February from 53.8 in the previous month. The sub-index for construction in February fell to 58 from 61.6 in January. But the sectors of air and rail transport, environmental protection, logistics, and retail maintained robust growth, with their sub-indices hovering over 60 in February.

Activity in the manufacturing sector also slowed in February. Two sets of purchasing mangers' index released came in below analysts' expectations. The official PMI published by the National Bureau of Statistics registered 50.1 points, the lowest since September. Meanwhile, the PMI compiled by HSBC and Markit stood at 50.4 points, a four-month low, in line with a preliminary reading published last week.

Source: DBSV