We think that there will be no asset bubble leading to a boom and bust situation in the Singapore private residential market owing to forward thinking brakes put in place. However, price and sales volume in residential sector are expected to fall from the latter half of this year until the supply peak in 2016-17. We expect a 5% contraction in private home prices annually over the next 2-3 years as vacancies rise to a projected 8-9%. In terms of primary transaction volumes, we estimate that primary demand could contract by 20-30% this year to 17,000-19,000. Meanwhile, prospects of rising positive real mortgage rates amid downward pressure on rental yields and caps on financing capabilities are also likely to keep investment demand in check. We prefer retail, office and residential sector in this order on the bases of rental and price resilience. In terms of stock pick, we prefer diversified developers with strong cashflow generating capabilities such as UOL, Global Logistic Properties, CapitaMalls Asia and Keppel Land.

Rex Internationalis acquiring stakes in two more licences in Norway. Total licences to increase to 15 in four regions from initial 10 as at listing on 31 July.  Rex anticipates announcing more deal flows in the coming months as it intends to grow its portfolio of licences to 20 by next July.

Global Logistic Properties has leased 26,000 sqm at GLP Park Beijing Capital Airport to DHL Supply Chain China. The company will lease the facilities to meet growing demand for its warehousing and distribution solutions from customers in the consumer sector expanding their reach across Northern China.

Asiasons Capitalbreaks into oil & gas sector by acquiring a 27.5% stake of US-based Black Elk for S$218m. The acquisition will be funded by the issuance of 194.6m new shares at S$1.1948 per share. Producing about 14,000 barrels of oil per day from assets located in the Gulf of Mexico, Black Elk represents Asiasons Capital's second acquisition of resource-based companies following the acquisition 10% in LionGold Corp.

Jet fuel trader China Aviation Oil (CAO) will have global expansion on its mind for the next three years, with plans for all the major regions in the world. Over the next three years, CAO plans to consolidate its position in the Chinese market and increase its jet fuel trading market share in the region. Where gas oil, fuel oil and petrochemicals are concerned, CAO plans to secure supply contracts and increase its trading activities. 

US markets rose ahead of the conclusion of the FOMC meeting that will decide on interest rates and the possibility of the start of QE tapering. Consensus expects the FED to reduce QE by some USD10-15bil/mth from the current USD85bil/mth. US 10-year treasury yield eased to 2.8366%. Singapore's STI could start the session firmer but gains will likely be modest while awaiting tonight's FOMC outcome. To the upside, we peg resistance at 3210-3225 that is just slightly below the 13.9x (Ave) 12-mth forward PE.

Source: DBSV