Singapore's PMI advanced higher into growth territory with a reading of 51.1 in May, up from 50.3 in April. The electronics sector also signalled a fourth consecutive month of growth with a reading of 51.4 in May versus 51.2 in April. New orders and new export orders both grew more strongly in May than in April, as did the imports and employment sub-indices. Furthermore, restocking is still in progress within the industry, judging from the decline in stocks of finished goods as well as the persistent increase in electronics imports and inventory. Nonetheless, the key risk to note for the manufacturing sector in the coming quarters is that the decline in overall competitiveness due to the rapid increases in business and labour costs will continue to hamper the performance of this sector. 

Regional PMIs, including the HSBC-Markit PMIs for China, Taiwan and Korea, however, all deteriorated, flagging a loss of momentum in Asian manufacturing. China's PMI fell to 49.2, suggesting that factory activity shrank for the first time in seven months as new orders fell. Even though the official PMI, said to poll larger firms, showed a slight rise, the drop in the HSBC PMI which covers more privatesector SMEs, fanned fears that the world's second largest economy is losing steam. Taiwan's PMI fell to 47.1 too - the first deterioration in six months - as new orders and export orders tumbled. And Korea's PMI signalled slower growth with a lower reading of 51.1 in May, down from 52.6 in April.

SingTel and its partners - KBZ Group and Myanmar Telephone Company - have submitted a bid for a telco licence in Myanmar. This makes it one of 11 applicants competing for the two available telco licences in Myanmar.

The Digicel consortium has also submitted its tender application for a nationwide mobile phone licence to the Government of the Republic of the Union of Myanmar. The Digicel consortium comprising of YSH Finance (a joint venture between First Myanmar Investment Co. and Yoma  Strategic Holdings, 'FMI/Yoma'), Digicel Group and Quantum Strategic Partners, features three of the world's most recognisable businessmen - Serge Pun, Denis O'Brien and George Soros.

Improved performance and softening fuel prices are expected to help the airline industry net a profit of US$12.7 bn this year, making it the third strongest year for the industry since 2001, the International Air Transport Association (Iata) said as it upgraded its forecast from an earlier projection of US$10.6 bn in March. The 20% boost to the bottom line is against an anticipated revenue of US$711 bn, even as margins remain razorthin. This year, net profit margin is expected to be an anaemic 1.8%, nearly half the 3.3% chalked up in 2010.

Asian Micro Holdingsis planning to acquire Oxley Global in a proposed reverse takeover (RTO) deal. Oxley Global is the holding company of the Oxley Group of companies, a fund management, private equity and multi-family office firm, focusing on sectors such as real estate, power generation, natural resources and infrastructure across the Asia-Pacific region and other jurisdictions. In Singapore, the Oxley Group jointly manages the listed Cambridge Industrial Trust. Under indicative terms, Asian Micro will issue new shares for the acquisition, resulting in the vendors of Oxley holding about 90% of the enlarged share capital of Asian Micro.

NH Ceramics has entered into an agreement with five parties to buy BlackGold Asia Resources and BlackGold Energy for US$150m. The proposed acquisition will enable the company to gain entry into the growing Indonesian coal mining industry. The acquisition, first announced on March 28, will be funded entirely by the issuance of 3.18 billion shares at 5.9 cents each.

Natural rubber producer Halcyon Agri Corp, has agreed to acquire assets of Malaysian natural rubber producer Chip Lam Seng group for MYR63m. This will lift Halcyon Agri potential annual production capacity by 180,000 tonnes to over 300,000 tonnes.

Roxy-Pacific has entered into an agreement to acquire a freehold residential site situate at Telok Kurau, also known as Sunnyvale Apartments at the purchase price of S$25m. The freehold residential site has a total land area of 23,160 sq ft and an existing plot ratio of 1.4 for residential apartment development.

US stocks rose after a FED official said the FED remains committed to record stimulus. Separately, the weak May PMI that sank into contraction (actual 49, consensus 51) may suggest that the US economy is not strong enough for the central bank to pare down on stimulus. The data trend continues with the ADP employment change (consensus 165k) and ISM non-manufacturing (consensus 53.5) for the month of May scheduled for released tomorrow.

Source: DBSV