The FED refrained from reducing the USD85bil/mth QE program, saying it needs more evidence of lasting improvement in the economy and warning an increase in interest rates threatens to expansion. Interest rates will remain near zero 'at least as long as' unemployment is higher than 6.5% and outlook for inflation is no higher than 2.5%. FED officials also reduced their forecasts for economic growth this year and next. 2013 US GDP is now lowered to 2-2.3% from 2.3-2.6% this year.

Our economist notes that the 'taper postponement' this month does not mean that one is automatically scheduled for October.  Employment growth has been very weak.  We estimate that less than half the people who lost their jobs back in 2008/09 have them back again, 5 years after the fact. Inflation - the biggest risk to the QE program - is nowhere to be seen.  Core PCE prices are running at 1.2% YoY, half the Fed's target.  Private sector GDP growth is slowing, not accelerating.  And long-term interest rates have risen by 100 basis points and appear to be having a negative impact on housing.  That's a pretty solid package of information that told the Fed to sit tight. As yesterday's Statement says, "asset purchases are not on a preset course" - they will remain contingent on the data.  The data are key.  And they're not looking like October at the moment.  

Expect the STI to rise in a positive reaction to the FED decision. SREITs and emerging markets exposure names should outperform in the near term. Our SREITs picks are Suntec REIT, MCT, AREIT and CDL HT. Recovery names with US recovery exposure should lag. While a positive reaction for the STI is seen, we note that the recent rise has lifted it closer to 13.9x (ave) 12-mth forward PE at 3250, which is seen as a near-term cap. This line rises to 3330 by year-end based on current forecast. Post FOMC outcome, attention will switch to more data watch, the October debt ceiling debate and the upcoming 3Q results season. Thus, further gains for the STI in the near-term should be capped at/slightly below 3250.

We initiate coverage on Centurionwith a BUY call and target price of S$ 0.77. Centurion is a premier player in the foreign worker dormitory business, garnering c.11% market share with 18,000 beds in three dormitories in Singapore. The Group has also expanded into Malaysia since 2011, operating 11,000 beds as the first and only purpose-built dormitory operator in the country. It is a key beneficiary of demand/supply imbalance, and the enforcement to raise living standards of workers. Key growth drivers are continued rent increases (we assumed 5% p.a.), higher occupancy and 50% expansion in beds in Singapore from 2013 to 2015 and 120% in Malaysia by 2015.

Keppel Corp has secured two Floating Production Storage and Offloading (FPSO) conversion contracts from repeat customers worth a combined value of S$190m. These contracts are from SBM Offshore and M3nergy Offshore. The latest win brings Keppel's YTD new orders to S$4.5bn, forming 75% of our full year assumption of S$6bn. Maintain BUY and TP of S$12.90 on Keppel.

Nam Cheong has entered into an agreement to acquire 49% equity stake in PT Bahtera Niaga Indonesia for US$1.5m. The purpose and objectives of the acquisition is the owning, operating and chartering of marine vessels for transportation, exploration and production activities in the oil and gas industry and to manage the maintenance of marine vessel and provision of offshore marine service and all other related businesses and activities.

BBR secures S$105.8m worth of new contracts in Singapore and Malaysia. These include a contract for the construction and maintenance of Phases 14 and 15 of the mixed-use development at The Springside at Jalan Ulu Seletar/Sembawang Road, Singapore and a number of specialised engineering contracts in Singapore and Malaysia.

OUE Hospitality Trusthas been granted right of first refusal to acquire the entire stake in Meritus Mandarin Haikou, a hotel situated in Haikou, China for S$58.7m and 80% stake in Meritus Shantou China for S$49.3m but it has declined the offer. The managers are of the view that such acquisition would not be accretive to the distribution per unit at the proposed purchase consideration levels.

China Environmental Resources is expected to record a decrease in losses for FY Jun 2013 as compared to last year, mainly attributed to the decrease in loss on changes in fair value of biological assets. 

Flight bookings into Singapore for the 2013 Formula One (F1) Grand Prix, already up 12.6% from last year, according to a forecast from travel technology firm Amadeus and market research company Forward Data, point to a bumper year. There could be a last-minute surge in bookings based on last year's data, since the report took into account bookings only until Sept 1, 2013. Some 30% of the final tally for 2012 started to flood in only in the three weeks leading up to the race.

Source: DBSV