The downdraft from China in reaction to details of the property measures and weaker Feb PMI data ignited worries that the country's recovery is stalling, which spilled over the rest of Asia, triggering selling across the board. STI fell 30pts to 3239. Small caps were affected worse. STI's decline was within our technical view for it to consolidate towards 3207 resuming its major rising trend.

We maintain our view that STI's decline yesterday is part-parcel of a much needed short-term pullback to consolidate the gains in recent months. Otherwise, the major rising trend stays is intact that has the potential to head towards 3450 by end-June. The McClellan Oscillator, an indicator for short-term market breadth, fell to -53 yesterday, which is the lowest reading in recent months and nearing the extreme oversold of -70. A minor rebound is seen today. Post rebound, any further subsequent downside should be limited at 3207, in line with our earlier view.

We think the China property measures are sector specific and do not signal an imminent broad monetary tightening. The Chinese government has done the right thing by taking swift action to check asset inflation. Meanwhile, the weak Feb PMI numbers has got plenty to do with the Chinese New Year holiday effect. CNY fell on February this year while it was in Jan last year. Activities will usually slow during the festive period due to the lesser number of working days in the month plus workers going on vacation leave. The numbers should swing back to norm come March. The same goes for the weak Singapore February PMI data released yesterday that slipped into contraction. Despite the Feb CNY distortion, we observe that the Singapore electronics segment reading even rose to 52.1 from 49.9.

We think Sound Globalshares have fallen to good support yesterday. The stock tumbled 17% yesterday in reaction to news of a couple of changes in top management. Among the changes, Mr Wang Kai will cease to be the CEO of the firm but will take over CFO role with effect from 4 March following departure of the previous CFO. The newly appointed CEO, Mr Zhang Jingzhi, is Sound's old guard with 11 years of experience and with solid credentials. We do not expect any impact on business as Chairman and founder Mr Wen Yi-Bo remains a key pillar within the group. The decline to $0.53 yesterday coincides with a technical projection low point at $0.52. The sell-down has opened up an accumulate opportunity.

Singapore's purchasing managers' index (PMI) for February fell to 49.4 from 50.2 in January, despite an improvement in the key electronics sector. This was due to declines in new orders, production output and imports. The data was also partly distorted by the fact that Chinese New Year fell in January last year and February this year. The electronics reading rose from 49.9 in January to 52.1 in February, to signal expansion for the first time in five months. Our economist had expected the electronics cluster to turn around due to the improving demand. But the uptick comes earlier than predicted. Whether this improvement will be sustainable remains to be seen. Singapore's electronics cluster has been a laggard to the global electronics cycle. High cost, structural hollowing-out, the strong Sing dollar and the inability to be part of the regional supply chain for smartphones have affected the performance for this industry. Beyond the recent set of PMI numbers, we are sticking to our view that a more pronounced improvement will only be seen after the second quarter.

Indofood has doubled its shareholding interests in China Minzhong from 14.95% to 29.33%. The additional 14.38% stake came from the acquisition of 94.25m shares from Tetrad Ventures for about $105.6mn, or $1.12 a share. Tetrad, an investment company of the Government of Singapore Investment Corporation, sold its equity stake on Feb 28.

BBR Holdings wins new contracts worth S$61.6m. These include a contract for the construction of the prestigious Dulwich College in Singapore and a number of structural work and specialist engineering contracts in Singapore and Malaysia. With these recent wins, order book now stands at S$1.02 billion with projects lasting to 2015.

Logistics Holdingshas been awarded the building works at Bukit Merah Contract 19C & 19D and contingency works amounting to S$59.5m by the Housing & Development Board. With the award of the Project, the Group's current order book amounted to approximately

CSC Holdings has secured foundation contracts aggregating in excess of $100m in the past 4 months. Among the notable awards are foundation contracts for the Klang Valley Mass Rapid Transit (KVMRT) projects in Malaysia. As at 1 March 2013, CSC's order book stands at approximately $240m with the bulk of its projects expected to be completed over the next few quarters.

YHM Groupproposes to raise capital by way of a placement of S$30m 5.00% convertible perpetual capital securities. Each Capital Security will, at the option of the holder of the Capital Securities be convertible into fully paid ordinary shares at a conversion price of S$0.025 per new Share. The conversion price represents a discount of 40.5% to the last volume weighted average price of S$0.042. The proceeds will be mainly used to finance investments in the new business of offshore and on-shore oil & gas and marine related businesses.

Sino Grandness Food Industry Group is placing up to 28.5m new shares at an issue price of S$0.82 per Placement Share, a discount of approximately 9.66% to the last weighted average price. Net proceeds of about S$22.7m will be used for capital expenditure and sales and marketing expenses for domestic canned food products, and also as working capital for the Group.

Rescued by a giant Chinese fruit juice producer, New Lakeside Holdings, an apple juice concentrate maker with a troubled past, resumes trading on Catalist today. It has swung back to the black in its latest financial results, had its debt restructured with a capital injection, and is now known as Zhongxin Fruit and Juice Limited. Key to the restructuring was Shanghai-listed SDIC Zhonglu Fruit Juice, which now owns a 53.11% stake in the company. SDIC Zhonglu accounts for 15% of China's total fruit juice exports and up to 10% of the global fruit juice market.

In property news, Guthriehas picked up 2HR at 2 Havelock Road in a deal that value the asset at $282.88mn, or $1,626psf, based on its current net lettable area (NLA) of 173,912 sq ft. The seven-storey commercial building is on a site with a remaining lease of about 69 years. It is the last of AEW's major property assets in Singapore.

Source: DBSV