Stocks across the region are currently lower by more than 1% after FED Chairman Ben Bernanke set the conditions and timeline for QE tapering:  1) QE will start to taper in the later part of the year in measured steps and end by mid-2014 IF incoming economic data supports the view that the US economy can grow by 3-3.5% and unemployment rate decline to 6.5% by next year. 2) QE tapering is NOT automatic. IF the economy does not improve as expected, QE will continue 3) The FED might aim for a lower 6.5% unemployment threshold before rising short-term interest rates. Any interest rate hike is still 'far into the future', this according to the FED Chairman.

The first 2 points with regards to timing and QE cut was already anticipated in the recent sell-down. Consensus had expected the FED to start tapering QE from September and complete the withdrawal by mid-2014. The 3rd point reiterates that any interest rate hike is still far away.

Thus, while we expect STI to decline more than 1% that is in line with region, we see the recent low at 3100 holding as there is nothing that the FED said that the market has not expected. If anything, it's worth to note that timing for rate hike might be pushed by if the unemployment rate recovers too soon. We see STI support at 3145-3160. Focus should shift out from yield/defensive into growth/recovery names. Yield/defensive and companies with high gearing are expected to decline more compared to growth and recovery names.

Other thing to keep investors this morning is the HSBC June flash PMI at 9:45am this morning with consensus expectations of 49.1.

Our analyst hosted Midasfor a two-day roadshow in Hong Kong, and key concerns revolved around when the new high-speed train orders would be coming through. With China planning to double its high speed railway (HSR) network to 18,000km by end-2015 and lack of orders for rolling stock in the last two years, there is firm optimism that the newly-formed China Railway Corporation could be placing orders for new HSR rolling stock in the second half of 2013, which should lead to substantial contract wins for Midas. Meanwhile, the group has won a number of metro and overseas train contracts to boost its order book to Rmb650m, up from Rmb400m at the end of 2012. Maintain BUY with S$0.60 target price. Midas is currently trading below 1x P/B, which we see as attractive for a stock that is due for an earnings recovery from 2H13 onwards.

Mapletree Logistics Trust (MLT) has acquired its eighth piece of property in South Korea for 28.75 bn Korean won (S$32m). The property, a warehouse facility called The Box Centre, is being purchased from Oakline, a supply chain management company in South Korea that stores and distributes spirits and wine. Oakline will lease back the property for six years with built-in rental escalation from the second year onwards. Based on the purchase price, the property will provide an initial net property income yield of 8.4% and is expected to be distribution per unit-accretive. MLT's current gearing of 34.1% is likely to inch up slightly to 34.6% post acquisition. This acquisition is in line with our expectations as management has previously advocated taking a more aggressive stance towards growth this year. Maintain BUY, TP: S$1.37.

OUE's executive chairman Stephen Riady said in an interview with BT that it will make a payout to shareholders following the listing of its hospitality and retail real estate investment trust (Reit), which is expected to be launched soon pending market conditions. OUE has yet to announce the size of the listing, but reports have placed it at between US$600m and US$800m.

Tat Hong Holdingshas established a $500m multicurrency medium term note (MTN) programme. Net proceeds will be used for general corporate purposes, including refinancing of existing borrowings, and financing capital expenditure and general working capital of the group.

Fitch Ratings has affirmed Genting Singapore's long- term foreign and local currency debt rating at A- and its Singapore-dollar denominated perpetual capital securities at BBB. Its parent Genting Berhad's long-term foreign currency issuer default rating and senior unsecured rating have also been accorded a credit rating of A-.

Jubilee Industriesannounced that it will raise approximately S$15.0m via a proposed placement of new shares to fund its strategic diversification into investing activities in addition to its current precision plastics core business. Jubilee will place out 97.5m new shares at approximately 15.4 Singapore cents each, a discount of 10% to the last volume weighted average price. 

ISDN Holdings is proposing to undertake a renounceable non-underwritten rights issue of up to 179.97m warrants at an issue price of S$0.02 for each Warrant, each Warrant carrying the right to subscribe for one (1) new share at an exercise price of S$0.60, on the basis of one (1) Warrant for every two (2) existing shares held. The Issue Price and Exercise Price together represent a discount of 55.6% from the last closing price of S$1.35.

Matex Internationalis placing 12.4m new shares at an issue price of S$0.0961 per share. The Issue Price represents a discount of 10% to the last weighted average price. The gross proceeds of approximately S$1.2m will be used for general working capital purposes.

Source: DBSV