We see uncertainty rising for Hi-P. Customer demand is falling short on weaker than expected reception to 5C iPhones and rising stockpiles. We expect 3Q to be on track but momentum is likely to fizzle out, thus weakening the outlook for 4Q and even FY14. Downgrade to HOLD, TP cut to S$0.65 (Prev S$ 0.97).

Yangzijiang has secured massive orders worth US$871m of contracts comprising: i) New orders for four 208k dwt bulk carriers (with options for two identical vessels) and ii) Exercise of 13 options including five 82k dwt bulk carriers, three 64k dwt bulk carriers and five 10k TEU containerships (Seaspan). The 208k dwt bulk carrier orders are the first capesize contracts for Yangzijiang, reinforcing company's strategy to move up the value chain to build more sophisticated vessels. Prior to this, the largest bulk carrier Yangzijiang undertook was 95k dwt panamax. The contract prices seem in line with Clarkson's average newbuilding prices for respective vessels. We understand the payment term varies but collection prior to delivery is at least 30%. These new orders have lifted Yangzijiang's YTD wins from US$1.22bn to US$2.10bn, outpaced our expectations of US$2bn this year. We raise FY13 order win assumption to US$2.5bn in anticipation of more options exercising in the coming months. Yangzijiang has remaining 28 options worth US$1.36bn consist of 11 containerships worth US$0.85bn and 17 multi-purpose bulk carriers worth US$0.51bn. Our FY13-15F forecast are largely intact as the additional order wins are expected to contribute more to FY16 earnings. These latest 17 orders are scheduled for delivery in 2015-2016. Reiterate BUY with unchanged target price of S$1.32.

Keppel Corp has secured contracts from repeat customer Clearwater to build two jackup rigs worth US$440m in total. The contract price of US$220m each is 7% higher than the last order clinched in Aug, as it includes owner furnished equipment and project management fees. The rigs are scheduled to be completed in 4Q 2015 and 1Q 2016. YTD order win is now S$5bn, making up 83% of our full year assumption of S$6bn. We like Keppel's market leadership, global network of yards and proven track record. Maintain BUY and TP of S$12.90.

Yoma Strategichas together with SPA and First Myanmar Investment (FMI), signed a non-binding memorandum of understanding (MOU) with Mitsubishi Corporation and Mitsubishi Estate to invest in the prestigious Landmark project (excluding the Peninsula Yangon) in Yangon, Myanmar's capital. This latest development follows an earlier agreement which established Yoma, SPA and FMI as the preferred business partners of Mitsubishi Corporation as it invests further in Myanmar.

Rail operators SMRTand SBS Transit (SBST) will be fined a total of $1.11m for five rail incidents. The Land Transport Authority (LTA) yesterday said it intends to impose total financial penalties of $860,000 on SMRT for four separate incidents on the North-South and East-West Lines, the Circle Line and the Bukit Panjang LRT. At the same time, a financial penalty of $250,000 will be imposed on SBST for a service disruption on the North East Line. The money collected will be used to help needy families with transport fares.

The Total Debt Servicing Ratio (TDSR) framework has made its presence felt, crimping prices and volumes in pocket segments of the private and public residential markets. Prices of Singapore's private homes rose a marginal 0.4% in Q3, compared with the one per cent gain seen in the previous quarter. Both the Core Central Region (CCR) and Rest of Central Region (RCR) posted price declines simultaneously. Specifically, prices of non-landed homes in the CCR slipped 0.5% in Q3, compared with a 0.2% dip the previous quarter. In a similar vein, prices of city-fringe homes dropped 1.1%, reversing a 0.2% rise in Q2. This is the first decrease since the first quarter of last year.

HDB resale prices slip in Q3. Flash data from HDB shows a 0.7% fall in index to 205.1, the first decline in over four years. Consultants were not surprised by the drop, and expect further decline, as a combination of cooling measures, and new or tweaked government regulations over the year took their toll. On the supply side, the pipeline remains ample, with HDB on track to launch 25,000 Build-to-Order (BTO) flats this year. Next month, it will offer close to 8,000 units under BTO and Sale of Balance Flats exercises.

China's official purchasing managers index (PMI) came in at a lower than expected 51.1, the second set of disappointing data in less than a week. While the index hit a 17-month high, it was only fractionally higher than August's and stood below a Bloomberg poll of analysts that forecast a figure of 51.6. There had been hopes for a stronger rebound amid recent signs that the economy was on the road to recovery. On Monday, the PMI published by investment bank HSBC came in at 50.2, a whole point lower than the flash version. A breakdown of figures of both sets of data - official and HSBC PMI, shows that while exports are picking up on the back of stronger economies in the United States and Europe, demand at home and business activity of small enterprises still lag.

US markets rose despite the first government shutdown in 17 years as investors bet that work stoppage will end in time for lawmakers to tackle the need to raise the debt ceiling. According to Bloomberg, CEOs say that a prolong shutdown of the US government has the potential to hurt the already fragile economic rebound. The USD Index dipped and against the SGD, the cross rate retreated to 1.2518. Yields on the US treasury edged 0.04% higher to 2.65%.

Source: DBSV