Global palm oil stockpile is at one-year low on stronger-than expected demand, despite global Slowdown. Near-term weakness in CPO prices may not drag planters much, given output and earnings recoveries. Our analyst has adjusted CPO prices for CY13F/14F/15F by -4%/-10%/-11% in USD, 0%/+1%/-1% in MYR. Beware of upside risks from FY16F, as supply growth decelerates. We expect multi-year CPO price gain from here. For the SGX-listed CPO stocks, we upgraded Indofood Agri to BUY on higher forecast output and ASP, target price raised to S$0.93 (Prev S$0.81). We believe the counter is oversold. Maintain BUY on Bumitama Resources (TP: S$1.26) and First Resources (TP: S$2.19) and HOLD on Wilmar (TP: S$3.53).

In SPH's upcoming full year results (11 Oct 2013), we expect final/special DPS of 16Scts with payout in Dec, equating to 4% yield for a c.10-week period. Going forward, we believe earnings could improve, going by recent upward adjustments to consensus' 2013 GDP growth forecast for Singapore. We also noted that AdEx growth for the period from May to Aug'13 has been stronger y-o-y. With the listing of SPH REIT, we project that SPH's cash pile has risen to c.S$1.1bn. We estimate SPH can well afford to pay out at least another 20-30 Scts per share, on top of its usual DPS (FY14F: 22 Scts) to shareholders. We reiterate our BUY recommendation, with TP adjusted to S$4.53 (from S$4.75) to account for the S$0.18 special DPS paid in Aug and 5-10% cut to our earnings forecasts.

SATS is acquiring Singapore Cruise Centre for S$110m to further develop its gateway services. The purchase price implies historical PE of c.7.9x and 1.7x P/BV. This acquisition is mildly positive given immediate but minor earnings accretion. 

SembCorp Industries(SCI) reported a successful close of Sembcorp Salalah IPO last night. The IPO offering of 33.4m shares (~35% of share capital) was comfortably oversubscribed with strong demands from investors. Shares are expected to commence trading on 10 Oct 2013. SCI is expected to recognise a total gain of S$117m, higher than our S$109m forecast. This divestment gain would boost PATMI to S$864.8m. Stripping out exceptional items, core profits would be S$772.8m from S$753.3m in FY12. No change to our BUY recommendation and TP of S$5.60.

TriTech is proposing a share split of every one (1) existing share into two (2) Shares and upon completion, up to 386.6m new Shares will be issued. Following completion of the proposed share split and the issue of the additional shares, TriTech is proposing to issue bonus warrants of up to 386.6m non-renounceable bonus warrants on the basis of one (1) Warrant for every two (2) Shares held.

Singapore's manufacturing output in August fell 1.4% from July, marking a third consecutive month of decline despite expanding 3.5% y-o-y. Last month's growth in factory output was bolstered by a 5.3% increase in electronics production, thanks to a 12.7% expansion in the semiconductor segment. Electronics, which make up about a third of the entire manufacturing sector, helped to offset a 1.9% contraction in biomedical output as a result of a 3.4% decline in the pharmaceuticals segment. Excluding biomedical manufacturing, Singapore's output grew 4.8%. With this set of weak data, the market is expecting GDP in the third quarter to contract 3.5 to 4%, in line with our expectations.

In property news, demand in all segments of the property market slumped in July following the introduction of the total debt servicing ratio (TDSR) framework in late June. Transactions of strata industrial and commercial units fell 20.9% and 31% respectively from June. But residential deals dropped even more, by 56.6%. These were findings made by property consultancy CBRE.

Singapore's population expanded at its slowest pace in nine years. Latest government figures released showed that the total population stands at 5.4 million, a 1.6% increase from the 5.31 million recorded last June. The resident total fertility rate (TFR) had increased to 1.29 last year from 1.2 in 2011, but is still far below the replacement level of 2.1 - a trend that has remained for more than three decades.

US markets rebounded Thursday lifted by a better-than expected initial jobless claims (actual 305k, consensus 325k). But August pending home sales declined a worse than expected -1.9% m-o-m compared to the -1% expected. The US 10-yr treasury yield held stabilized off the 2.61% level in recent sessions heading into next week's data heavy week that culminates with the September employment numbers.

Source: DBSV