Markets have been weighed down by the anticipation of FED QE tapering; emerging markets sell-off and the risk of a military strike on Syria. We look for bargain/value hunting opportunities should the STI dips moderately lower towards 2900 that coincides with 12.3x (-1SD) 12-mth forward PE. Guided by a 10.4% EPS growth forecast for FY14, the Singapore market currently trades at 12.6x FY14F PE, which is reasonably attractive. Singapore market should recover past the September-October period of uncertainty. Expect the STI to recover pass 3200 (13.1x (-0.5SD) FY14F PE) but cap below 3400 [(13.9x (average) FY14F PE) by year-end. 

We continue to prefer stocks with exposure to developed markets, and avoid emerging markets. Stocks with earnings visibility supported by yield are likely to remain in favour. Our picks are SingPost, Comfort Delgro, ST Eng, HPH Trust and Overseas Education.

DBSV Research issues an Equity Explorer report on OUE Hospitality Trust with a fair value of S$0.93, offers 8% upside. OUE HT is a Singapore-based REIT with an initial portfolio of two properties in prime locations - the 1051-room Mandarin Orchard Hotel, and the accompanying Mandarin Gallery retail mall. The properties are collectively worth S$1.7bn as of 31 Mar13. The Trust has resilient earnings structure with strong visibility. Multiple growth drivers are also in place. While earnings are sensitive to RevPAR changes, we expect earnings volatility to RevPAR changes to be limited given a high % of income pegged to fixed rates. In addition, yields of 7.6%-8.0% are higher than S-REIT peers.

Ramba Energy has received an offer from a Jakarta-listed company for a 51% stake in the firm. Sugih Energy, an Indonesian energy producer, will make a voluntary conditional cash offer at 65 cents a share. This represents a 3.2% premium over Ramba's last traded price. Sugih, which has a market capitalisation of 10.73 trillion rupiah (S$1.22 billion), holds equity interests in two exploration blocks in Sumatra in Indonesia, namely a 49% stake in Lemang block, and a full stake in Kalyani block as an operator.

XMH Holdings has entered into an agreement to acquire Mech-Power Generator for approximately S$17.4m. Boasting a history of about 30 years, the target company is engaged in the manufacturing, assembly, sale and servicing of diesel powered generator sets and has operations based in Singapore and Malaysia. The acquisition will be synergistic to XMH's existing operations and would also help to grow more in the non-marine sector applications. This is the first major M&A for XMH since building a war chest of cash at its IPO and after investment by Credence Capital.

Hotel Grand Centralis purchasing Lot S3 of 300 Finders Street Building, Melbourne, Australia for A$48.5m. The proposed acquisition will enable the group to diversify its investments in Australia to the commercial market in Melbourne, Australia.

Sunpower Grouphas clinched a contract of RMB85.1m with Shenhua Group, one of the largest coal companies in China, to supply ZLD technique & key equipments and Flare System EPC service for Shaanxi Methanol downstream processing project of Shenhua Group. The securing of contract underscores the long-standing relationship between the Group and conglomerate Shenhua Group.

China's exports rose more than expected in August, boosted by improving demand for the country's goods in major markets. Exports rose 7.2% y-o-y in August and imports rose 7%, leaving the country with a trade surplus of US$28.6 bn for the month. The figures are better than market expectations of a rise of 6% in exports, an 11.3% rise in imports and a trade surplus of US$20 bn. Exports to ASEAN nations jumped 30.8% in August, outpacing July's gains, while exports to the US rose 6.1%, faster than July's 5.3% gains. Exports to the European Union rose 2.5%, little changed from July's gain, while exports to Japan contracted for the seventh straight month.

Source: DBSV