Today's Focus

On the STI, we maintain our view that in the immediate term, a rise above 3200 should see resistance increasing towards 3250 as the index moves closer towards its average 12-mth forward PE at slightly above 3250.

For this week, the results reporting will go into full swing, starting with REITS and the Keppel Group. We are not expecting any negative surprises for this quarterly results reporting for REITS.

Singapore's 3Q GDP contracted 1.0% q-o-q, better than consensus estimate of 4.0% contraction, due to a strong performance by the services sector and improvement in manufacturing. This compared with an upwardly revised 16.9% increase in the second quarter. On a y-o-y basis, the economy is estimated to have expanded 5.1%, compared with the market estimate of 3.9% increase. GDP rose a revised 4.2% from a year earlier in the second quarter. Output in the manufacturing sector rose 4.5% in the third quarter from a year earlier compared with a 1.3% expansion in the previous quarter. Services sector output grew 5.7% on year, while the construction sector expanded 3.6%.

MAS kept its monetary policy unchanged and said it would continue to guide the local dollar on its current appreciation path, citing an improved global economic situation. The central bank said it would maintain the policy of a modest and gradual appreciation of the Singapore dollar's nominal effective exchange rate policy band. There would be no change to the slope and width of the policy band, as well as the level at which it is centered.

Our site visit to Perennial China Retail Trust'sportfolio of assets reaffirms our view that operating performance is improving with 85% of its IPO portfolio completed and operational. New completions like Chengdu Qingyang Mall and Dongzhan Mall which are to open in 2014, are expected to boost income visibility. We maintain our Buy call on PCRT with S$0.84 TP for its attractive 0.8x P/bk NAV valuation. As its properties ramp up operations and improve earnings visibility ad sustainability, we believe the gap between share price and asset backing will narrow.

SPH FY13 results were within expectations. Net earnings ended 25% down y-o-y to S$430m on the back of a 3.9% drop in newspaper & magazine ad revenues, higher operating expenses (+29.6%) and higher finance costs (+30.6%). More importantly, final and special dividends of 15 Scts are in line with forecast. SPH declared a final dividend of 8 S cts & special dividend of 7 S cts, bringing total dividend in FY13 dividends to 40 Scts. This implies a dividend yield of 9.7% for FY13. In terms of the outlook, advertising performance is dependent on macro, which remains uncertain while newsprint prices are expected to remain flat in the near term.

Del Monte Pacific - which is dual-listed in Singapore and the Philippines - is acquiring the consumer food business of privately-owned Del Monte Foods of the US for close to US$1.7 bn. Del Monte Pacific said it will fund the US$1.675 bn transaction using a combination of US$745m of equity in Del Monte's new acquisition vehicle - Del Monte Foods Consumer Products - as well as long-term debt financing of US$930m that has been committed by a syndicate of banks. As part of its equity financing, Del Monte Pacific also plans to issue common and preferred shares in the market. The acquisition opens doors for Del Monte Pacific to enter the US, one of few key markets it neither has a direct presence nor its own brands.

AusGroup anticipates that it will incur a net loss for Q1. The anticipated loss is due to :-

1. Cost overruns from two contracts that are approaching completion;

2. Delays in the commencement of new contracts; and

3. Restructuring costs.

IEV Holdings has been awarded three pile grouting and two free span correction contracts by three engineering, procurement, installation and commissioning ("EPIC") contractor. The work program for the pile grouting service covers seven offshore platforms in Malaysia and Indonesia, while the free span correction service will be performed on four pipelines in Indonesia. The contracts, with aggregate value of approximately US$2.2m are expected to be completed in 4Q2013.