Today's Focus

The 3Q results season that spans till mid-Nov should set the tone as the calendar year heads towards the traditional year-end holiday lull period. With few exceptions, we expect a generally lack lustre 3Q reporting season. We maintain our view for the STI to be range bound from c.3150-3250 before heading towards 3300 by year-end on the assumption that the current reporting season turns out benign with no major downward revision to FY14F earnings forecast.

Traders looking to position into stocks that have the potential to not only report healthy growth but also stand a good chance of beating forecasts in their upcoming results should consider Nam Cheong, Ezion, Centurion & Yoma given their ample upside to TP.

Investors expect the FED not to start tapering QE at Thursday's FOMC meeting. The recent US federal government partial shutdown has pushed back consensus expectation for the start of QE tapering to March 2014. to leave While long bond yields should remain suppressed in the short-term and S-REITs continue to be underpinned by tapering delay, further gains for the sector could be tame. Delay does not mean terminate and it won't be too long into early 2014 when QE tapering concerns re-emerge. Our SREITs picks are Fraser Centrepoint Trust and Cache.

Investors who seek exposure to REITs without the interest rate risk can consider ARA. Technically, we continue to see $1.82 upside for this stock.

 4Q13 results for Ezra beat our estimates. Subsea division turns around; we expect stable margins hereon with legacy projects completed. FY14 core earnings were raised by 33% on better margin assumptions, in line with improving execution and charter market recovery. TP raised to S$1.34 (Prev S$ 0.90); upgrade to HOLD.

3Q13 results for Starhill Global REIT in line. Weaker overseas income mitigated by strong performances at Ngee Ann City and Wisma Atria. Backed by a quality portfolio with good

earnings visibility, we believe that positives have already been priced in at this level. Downgrade to HOLD, given limited upside to our rolled-forward TP of S$0.87 (Prev S$ 0.84).

Strengthening SGD-INR continues to be a drag on Ascendas India Trust earnings. Gross revenues and NPI declined by a 9% and 14% y-o-y to S$28.9m and S$16.4m respectively. Development of Aviator is on track, with 100% of space committed. Low gearing of 21% opens opportunities for growth. Maintain HOLD, TP revised to S$0.73 (Prev S$ 0.75).

3Q13 results for Ascott Residence Trust slightly ahead. Refurbishments completing in subsequent quarters are expected to drive organic growth. Divestment of Somerset Grand Fortune Garden Beijing is positive. Maintain BUY with TP S$1.42 for its attractive 6.8%-7.2% yields.

Hi-P slashed its 3Q13 earnings guidance despite higher revenue because of a S$4.4m inventory provision due to lower orders from an existing customers. Y-o-y, the company now expects 3Q13 profits to be flat. For the full year, Hi-P now expects higher sales in 2H13 vs 1H13 but expect lower

profits. We had earlier warned of earnings downside risks for Hi-P due to demand weakness and rising stockpiles for both smartphone customers Blackberry and Apple. However, the magnitude of decline is much substantial than we had expected. Although our current forecast is already the lowest in the street, we now expect at least another 15% downside to our FY13F of S$38m. This is assuming 2H13 is 20% lower h-o-h. We will review our earnings as well as TP (last @ S$0.65) and HOLD recommendation pending details from management.

Ezion has received a letter of intent with a contract value of up to about US$ 65m over a 3 year period to provide a Service Rig to be used by an oil major to support its oil & gas activities in South East Asia.

Triyards has secured 2 contracts worth an additional US$59mil that includes its 10th Self-Elevating Unit (SEU) order and the construction of a turret for a Floating Storage Offloading (FSO) in Indonesia. The latest contract win lifts total orders over the past 12 months to about US$209mil.

Rex is proposing to place up to 70m new shares at the placement price of S$0.755 per share. The Placement Price represents a discount of 9.6% to last weighted average price. The company intends to use the net proceeds of about S$50.5m mainly for exploration and drilling activities.

Lum Chang has been awarded the construction contract worth S$178.6m for the Glades condominium at Bedok Rise. This latest award brings the total outstanding value of construction projects still in progress to S$566.4m.

Boustead Singapore enters into joint venture for developments in Iskandar Malaysia. The JV Company intends to develop six parcels of vacant industrial land in Nusajaya, Iskandar Malaysia's Flagship Zone B.

Sheng Siong has acquired 18,000 sq ft of shop space at Junction Nine, a mixed development located at 18 Yishun Avenue 9. The property has a 99 year lease period and costs S$55m. Funding will be by internal cash. As of 3Q13, SSG has net cash of S$107m. Immediate impact on cash; no change to our earnings estimates and dividends.

Singapore's industrial production for September posted its biggest rise since February 2012, expanded by 11.3% y-o-y, following a revised growth of 4% y-o-y in August, and better than market expectation of a 9.3% growth. This rise is on the back of a 20% surge in electronics output and a busy time for rig and ship-builders. After adjusting for seasonal factors, manufacturing output rose 3.7% m-o-m. Excluding the biomedical cluster, output would have grown 5.8% from August.

Source: DBSV