Our Singapore economist notes that while growth momentum has been sluggish thus far, it is expected to pick up in the coming quarters. As it is, the PMIs of key export markets have been inching northward, reflecting an expectation of improving demand in the coming months. Globally, economic conditions across Asia are improving, led by a pick-up in in-vestment activity in China. As long as the US continues to march along its recovery path and that the risks from Europe contained, this year could possibly mark the start of a gradual normalisation process for the global economy. This essentially implies that Singapore, being a global city, and highly dependent on global demand will get its fair share of the positive spill-over. Coupled with the low base last year, overall GDP growth this year (3.2%) will very likely be higher than what was recorded last year (1.3%).

Myanmar is expected to pre-qualify applicants on 11 April and announce two telecom license winners on 27 June, 2013. The winners will participate in a virgin market with <10% mobile penetration. SingTel and Digicel are well placed due to their solid track record of international operations and partnerships with strong Myanmar parties. SingTel's partner KBZ is an influential conglomerate. Digicel's partner Yoma is Myanmar's only listed real estate company with broadening business interests. Myanmar aims to achieve 75%-80% penetration by 2015-16 with four operators but we believe Myanmar's current penetration target is aggressive. Cambodia, the closest country in terms of GDP per capita and population density (although equal to only 25% of Myanmar's) took almost five years to grow from 9% penetration in 2006 to 76% penetration in 2011 with nine operators.

In terms of impact, for SingTel, our estimated enterprise value (EV) of the Myanmar market could potentially add only 3-4% to SingTel's current EV of US$53b, implying this would be a small market relative to SingTel's existing coverage. For Yoma, Digicel's win would add new business. But, we believe Yoma's stake in the consortium would be small and could probably only qualify as an investment.

Midas has won a S$17.3m supply contract for train car body module components for new trains on Singapore's North East Line (NEL) and Circle Line (CCL). This will grow their order book to c. RMB800m. The supply contract is for 2013 to 2015, for 18 train sets or 108 train cars for NEL and 24 train sets, or 72 trains for the CCL. This is positive for Midas as they have been winning export orders and metro contracts in China of late, especially as we wait for high speed train orders to come through. Maintain BUY, TP S$0.60.

Chasen Holdingshas secured a contract worth RMB48m. The latest deal involves the move-in of equipment and related services for an 8.5G TFT/LCD (thin-film-transistor liquid-crystal display) manufacturer in Hefei in China.

Matex Internationalis placing 25.5m new shares at an issue price of S$0.0563 per share. The issue price represents a discount of 10% to the last weighted average price. Gross proceeds of approximately S$1.4m will be used for general working capital purposes.

China's inflation eased in March, dropping from a 10-month high. The consumer price index rose 2.1% last month, less than the consensus estimate of 2.5% gain. This was due to a sharp drop in food prices and in particular pork. Pork prices are cyclical in China due to the structure of the industry made of many small producers who are unable to hedge prices and have a history of sparking strong inflationary trends. Food inflation retreated quickly to 2.8% in March from 6% in February. Pork prices alone fell 5.5% y-o-y in March. Meanwhile, other price increases remained in line with consensus' estimations as prices tend to seasonally drop after the new year spending binge.

US stocks rose with investors hopeful that the 1Q results season can continue to underpin equities. Alcoa, the 1^st Dow company to release results had reported earnings that beat analysts' estimates. According to Bloomberg, earnings for S&P500 companies are seen dipping 1.8% y-o-y for the current results season.

Source: DBSV