The recent sell-down in the shares of ST Engineering is unjustified as the stock offers upside from US recovery, backed by an attractive yield. Visible growth drivers are in place at Aerospace and Marine divisions, and also in Asia as well as in the US. With its strong balance sheet and net cash position, the group is well positioned to source for M&A for longer term growth. The stock is a proxy to recovery in the US economy with 27% of sales from the US. Appreciation of the US$, if sustained, will provide earnings upside. Maintain BUY, TP S$4.80.

Singapore Airlineshas posted a lower passenger load factor (PLF) of 74.6% for May, which was down 1.2 percentage points compared to the previous year. Systemwide passenger carriage grew 1.3% y-o-y against a 3.1% increase in capacity. The number of passengers carried in May increased by one per cent to 1.47 million. Meanwhile, load factors posted a decrease across all regions, with Europe and South West Pacific registering the highest declines as the growth in passenger carriage was outstripped by the increase in capacity. For Europe and South West Pacific regions, PLF fell 2.4 percentage points and 1.9 percentage points respectively. Overall cargo traffic was 5.1% lower y-o-y, while capacity decreased by 3.8%. Consequently, cargo load factor decreased by 0.8 percentage point.

Roxy-Pacific has acquired the freehold Yi Mei Garden in Tampines Road through a collective sale for $136m. The price works out to $856 psf ppr inclusive of a development charge of $4m-plus. The site is zoned for residential use with a 2.1 plot ratio. Located about 600 metres from Kovan MRT Station, Yi Mei Garden is currently a 14-storey residential block comprising 44 apartments and four penthouses. It was completed in 1984.

Mencast Holdingswas awarded a three year contract from 1 January 2013 to 31 December 2015 (plus one year option to renew) by Keppel FELS for the provision of general underwater services. This long term contract affirms its growing leadership in maintenance, repair and overhaul (MRO) services to the offshore industry.

Texhong Textile Groupannounced that based on a review of the Group's unaudited management accounts for the five months ended 31 May 2013, the earnings of the Group has more than doubled that of the six months ended 30 June 2012. This was mainly attributable to the continuous strong demand of its yarn products in the PRC and reduction in production costs due to low international cotton price, although such competitive advantage has been partly offset by the weak yarn selling prices in the PRC.

Lian Beng Grouphas secured a contract for a project in Singapore for the proposed construction of 12-storey office block and 11-storey car park including additions and alterations to existing office block. The contract is worth approximately S$85m. The contract period shall be 26 months and is expected to commence in June 2013.

New private home sales climbed 5.4% in May to 1,455 units, reversing the previous month's 50% drop. Posting the largest increase in take-up for the month was the Rest of Central Region (RCR), which contributed 41.4% of sales. The proportion of transactions within RCR has been on the rise, from 14.3% in Q3 2012, to 22.7% in Q4. In Q1 2013, 24.9% of homes sold were within RCR. On the other end of the spectrum, the high-end market was fairly muted, despite developers continuing their launch momentum.

The government will release five 99-year-leasehold land parcels that can yield 3,600 private and executive condominium (EC) housing units, with two of the sites allowing for commercial development as well. Four of the five sites come under the confirmed list of the Government Land Sales programme. They include two EC sites at Punggol Drive and Yuan Ching Road; these were launched for sale yesterday. The other two sites are a residential plot at Mount Sophia and a mixed-use commercial and residential plot at Yishun Central 1, and will be both put up for sale next Friday. The fifth site, a commercial and residential site at Meyappa Chettiar Road in Potong Pasir, will be put on the reserve list next Friday.

US stocks ended off session highs but still managed to recover Friday's decline ahead of the FOMC meeting tomorrow. Asian bourses are putting up a more mixed performance this morning with the Nikkei and KOSPI currently moderately higher while ASX All-Ords is lower. Equity markets are likely to be in a holding pattern ahead of Ben Bernanke's press conference tomorrow night. A recap our base view is that the FED will not signal QE tapering anytime soon because the US economy is not strong enough and last week's low at STI 3100 signals the short-term low to the recent correction. Also, if a timeline is given for withdrawal and set conditions for it, it's for positive reason that the US economy can sustain its recovery.

Source: DBSV