Follow through gains in early trade is seen riding on the overnight strength on Wall Street. With recent data suggesting that the slowdown in the Chinese economy may be stabilizing, the possibility of a resolution to Syria's use of chemical weapons without having to commit a military strike and short-term stability returning to emerging markets, STI looks to have found an important low late last month at 2990. Investors also have had more than ample time (about 4 months since May 22) to react to the possibility of the start of QE tapering come next week's FOMC meeting.

STI current trades at slightly above 13.1x (-0.5SD) 12-mth forward PE. In the immediate term, slight pullback off 3132 is possibly but this should find support at/above 3055-3060. The index has the capacity to head towards 3220 in coming weeks should recent uncertainties continue to ease.

United Envirotechhas secured a RMB286m (S$59m) Transfer-Operate-Transfer (TOT) cum Build-OperateTransfer (BOT) agreement with the municipal government of Hong Wei District in Liaoyang City, China. Upon completion, the plant will treat 30,000 m3/day of municipal wastewater and 30,000 m3/day of industrial wastewater. This contract win is positive and material. Firstly, the construction of the BOT would add RMB261m to UENV's EPC orderbook, lifting YTD new win to RMB451m, slightly ahead of our RMB400m assumption. Secondly and more importantly, the additional 60,000m3/day capacity will add 6% to existing phase 1 capacity, lifting UENV's total treatment capacity to 1.45m m3/day. Based on minimum offtake for TOT and staggered guaranteed offtake from 70% of the design capacity for Year 1, this contract will boost our target price of UENV to S$0.98 from S$0.90 previously. In view of the improved upside, we upgrade United Envirotech to BUY with revised TP of S$0.98.

Malaysia's Aug13 palm oil output of 1.735m MT was in line with forecast. Strong export of 1.524m MT (+7% mo-m) was offset by 25% m-o-m drop in domestic intake; keeping stockpile flat at 1.666m MT. We expect Malaysia's palm oil stockpile to re-accumulate to 1.824m MT by end Sep13. We do not expect the Indian government to raise import duties on refined oils. The Indonesian government's new policy to raise biodiesel blend, if realised, could have positive impact on CPO prices. Our picks for SGX-listed CPO stocks are First Resources and Bumitama Agri.

Overseas Educationhas awarded the construction contract for the building of the new school campus. The contract sum is S$233.5m and the contracted construction period is 19 months from September 2013 to April 2015. Situated at the junction of Pasir Ris Drive 3 and Elias Road, the new school campus will consist of two 12-storey teaching blocks, a 7-storey administration block, a performing arts centre and auditorium, elevated sports field and 50-metre swimming pool, covered car park and bus park lots and other facilities and amenities.

Asiatravel.com Holdings has appointed Green Olive Travel & Tours as its General Sales Agency for TAcentre.com; its online wholesale system. This appointment empowers Green Olive to manage Myanmar's growing travel trade segment and develop new business through its sales and customer service teams in their Yangon and Mandalay offices.

Asia is not on the verge of financial crisis, despite the recent turmoil in regional equity and currency markets, Prime Minister Lee Hsien Loong said. He highlighted that the Asian economies are in a stronger position than they were in '97 when the crisis came, and we have got more safeguards instituted now over the last decade and a half since the Asian crisis, to deal with the likely consequences of big capital flows.

 In property news, a consortium comprising Hoi Hup Realty, Sunway Developments and SC Wong Holdings has narrowly emerged as the top bidder of a plum, 99-year leasehold residential site at Mount Sophia. It drew as many as nine bidders, on the higher end of consultants' expectations. The trio's bid of $442.3m - or $1,156.53 psf ppr - was just 0.06% higher than the second highest bid.

China's industrial production grew 10.4% in August, its fastest in 17 months, accelerating from 9.7% in July. Retail sales, a key indicator of consumer spending, rose 13.4% y-o-y last month, and fixed asset investment, a measure of government spending on infrastructure, increased 20.3% in the first eight months of the year. The better-than-expected data comes on the back of strong trade figures and PMIs published earlier in September.

US markets extended gains as China's August industrial output and retail sales rose slightly better-than-expected and as tensions surrounding Syria eased. US President had asked senators to delay a vote authorizing military strikes to allow time for talks on eliminating Syria's chemical weapons.

Source: DBSV