Today's Focus

- STI - Expect minor pullback in current session, immediate support at 3248-3258

- Frasers Commercial Trust - Attractive growth over next 2 years; forward yields of 6.0%-7.1% attractive. Maintain BUY, TP S$1.61

STI rose above the 3266 near-term resistance yesterday, which positions it at or slightly above the 13.9x (average) 12-mth forward PE mark. While further gains towards 3310 is possible from a technical view point, we think continued short-term rise towards that level will result in a pullback as bond yields stay underpinned by QE tapering, the uneven global economic recovery and the low single digit EPS growth for the STI this year. For the current session, we expect a modest pullback for the STI, immediate support at 3248- 3258.

3Q13 results for Frasers Commercial Trust in line. Operational outlook stable; expiry of lease at Alexandra Technopark in 2014 could lead to higher earnings. Maintain BUY, TP revised to S$1.61 (Prev S$ 1.69) after adjusting our risk free rate assumptions from 2.0% to 2.9%. FCOT offers attractive growth over the next 2 years. Forward yields of 6.0%-7.1% is strong and above the commercial and the sector average.

Cache Logistics Trust reported 2Q13 DPU of 2.147 Scts, in line with expectations. Gearing remains conservative at c.29%, which is below management's optimal range of 35%. Looking ahead, we continue to see opportunities for the Manager to utilise its balance sheet to fund acquisitions. There could also be opportunities to extract further GFA in its existing portfolio. Maintain BUY, TP S$1.45 (Prev S$ 1.47).

Starhill Global REIT's 2Q13 results in line. We expect strong reversions for Singapore and Malaysian properties, while income growth prospects still strong. Maintain BUY, TP S$0.94 (Prev S$ 0.98), after accounting for a larger share base and a higher risk free rate. Going forward, we believe that 2H13 will reflect a stronger set of results as reversions from the master leases in Ngee Ann City, Starhill Gallery and Lot 10 begin to contribute on a full quarter basis.

2Q13 results for Cambridge Industrial Trust in line with expectations. Portfolio remains resilient; earnings growth to be led by opportunistic acquisitions or development projects. HOLD maintained, TP S$0.78.

Keppel Land plans to transfer its 51% interest in integrated township Jakarta Garden City to its partner PT Modernland Realty for S$290.5mil. Keppel Land expects a net proceed of S$275mil from the sale, for a profit after tax of S$186mil. The transaction is expected to be completed by the fourth quarter of the year.

The deadline for Yoma to accept the offer to acquire the land development rights of and to participate in the development of the approximately 12-acres site located along the Hlaing River has been extended till 31 December 2013.

Hisaka has entered into an agreement to acquire the entire stake in Temasek Regal, a Malaysian entity principally involved in property development, construction / project management, investment, trading of construction materials, asset management and real estate marketing in Malaysia. This acquisition allows the group to diversify from its core semi-conductor business. The purchase consideration of S$127.3m will be satisfied via the issue of 195m new shares at an issue price of S$0.55 per share and cash of S$20m. The issue price is at a 20% premium to its last 5-day average price.

Mirach Energy said it will commence drilling another 4new infill wells that form part of the nine wells to be drilled this year, having received the approval from Pertamina EP.

Crane operator Tat Hong and crane maker Yongmao are restructuring their alliance in China after numerous issues over the past few years. Tat Hong will allot shares in its wholly owned Tat Hong Equipment (China) unit to 23.9% associate Yongmao in exchange for Yongmao's stake in two China subsidiaries. The value of the Tat Hong Equipment shares is RMB78.7m, which is equal to Yongmao's original cost of investment in the two China subsidiaries.

China Essence Group expects to register a net loss for the quarter ended 30 June 2013 in the financial year ending 31 March 2014 (1Q FY14), due to a decrease in salesvolumes for all its products, despite the increase in average selling price.

China Kangda Food is expected to record a significant decrease in profit or a loss for the six months ended 30 June 2013 compared to the same period last year. The expected decline is mainly attributable to the decrease of demand and selling price of chicken meat products because of the negative impact from H7N9, which was detected in chickens in the southern China.

The flash HSBC/Markit Purchasing Managers' Index for marking a third straight month below the 50 line. It was also the weakest level since August 2012. A sub-index measuring employment slid to 47.3 in July, the weakest since March 2009. It stood at 47.6 in June and has been below 50 for four months in a row. The new orders subindex fell to its lowest level in 11 months, and stayed below 50 for a third straight month. Output declined to 10-month low and remained in contraction for a second month.

China will scrap business and VAT for small companies from Aug 1st and roll out more measures to help exporters. The tax exemption will cover over 6mil firms whose monthly sales revenues are below 20,000 yuan (US$3,300). To help the ailing trade sector, the State Council said banks should increase support for exporters while the government will simplify customs clearance procedures, cut administrative fees and provide zero tariffs for exporters in the services sector.

Las Vegas Sands posted 2Q results that fell short of analysts' estimates after winnings in Singapore and Macau came in lower than projected. The company cited a lower win percentage at the Marina Bay Sands in Singapore and the Sands Cotai Central in Macau as well as competitive pressure on hotel room rates in the Nevada market. CEO Sheldon Adelson said he saw no evidence that reports of a slowdown in China were impacting business in Macau.

US index dipped modestly as weaker forecast by Caterpillar & Broadcom weighed while utility and home builder shares fell amid rising interest rates. The US 10-yr yield rose to 2.588% (from 2.505%).

Source: DBSV