Chart for Indo Agri and Wilmar

Indofood Agri +3.1%; Wed Selloff Overdone - DMG

[Dow Jones] Indofood Agri Resources (5JS.SG) +3.1% at S$2.66, recovering part of Wednesday's 10.1% tumble, as bargain hunters swoop in. DMG, which has Buy call with S$3.34 target, says earlier selloff due to higher Indonesia CPO export tax levy and weaker Malaysian CPO exports data, not warranted as macro outlook remains positive; "we believe that IFAR will continue to enjoy the present conducive environment, especially with its high ratio of mature acreage." But thin volume suggests investors still watchful of potentially more negative surprises, indicating this week's highest close of S$2.87 unlikely to be disturbed.

On the chart, there is a bearish divergence, likely we have seen a short term high and more correction in store in the coming days for Indo Agri. In fact Wilmar and First Resources are also exhibiting this same scenario. Only Golden Agri among the CPO stocks is spared this scenario.

End of decline for China Stock?

China Life Insurance Co. has been snapping up ``large quantities'' of open-end stock funds, a move that signals the end of China's equity market slump, the China Securities Journal reported, citing unidentified people.

Chinese insurers have been following China Life's lead in buying index-linked funds, boosting optimism that Shanghai's key Composite Index may rebound at about 2,800 points, the state-owned newspaper said, citing analysts without naming them. The move by China Life, the country's largest insurer, is significant because of its bellwether size and its influence in the industry, especially its tendency to ndertake large-scale purchases, the newspaper said.

Sales of China's stock funds may be bolstered, reversing an equity market slump that had limited the new funds this year to 1 billion yuan ($145.6 million) each, the newspaper said.


Just support from the government to pop up the stock market?

Outlook For S-REITs Bleak As Inflation Weighs -KE

Singapore REITs may face strong headwinds amid steepening Singapore bond yield curve, potential risks of higher interest rates, says Kim Eng Securities. Notes 10-year bond yield has spiked more than 100 basis points to 3.5% in past two weeks - fastest pace in 26 years - on inflation fears (Singapore's May CPI reading at 7.5%); "the issue here is that S-REITs will face difficulties in securing long-term funding to fund their acquisition growth and/or refinance short-term borrowings." Says current yield spread between S-REITs and 10-year SGD bonds has narrowed to under 200 basis points (below historical average), making REITs unattractive. FTSE ST Real Estate Investment Trust Index off 0.7% at 735.15

CIMB Turns Tad Cautious On Asia Palm Oil Sector

Asian plantation sector is still good bet but a potential crude oil price pullback is a worry, says CIMB. Broker says crude palm oil (CPO) price well supported by strong fundamentals, remains optimistic on sector, but is "turning a bit cautious owing to concerns over a potential correction in crude oil price." Says major unwinding of funds out of commodities, global recession could put crude oil price under pressure; CPO price closely linked to fate of crude oil price. Makes no change to big-cap picks, which remain Wilmar (F34.SG), IOI Corp. (1961.KU), Astra Agro (AALI.JK). Among the mid-cap planters, broker prefers Asiatic (2291.KU), Indofood Agri (5JS.SG), Sampoerna Agro (SGRO.JK). Of the Singapore-listed stocks, Wilmar currently +1.2% at S$5.15, Indofood Agri +1.8% at S$2.83.

STI Down 1.3%, 2950 Support; Outlook Choppy-CIMB

STI down 1.3% at 2962.37, its lowest level since March 27 as Wall Street's Friday selloff on oil, financial sector jitters spills over into regional markets; support for STI tipped at 2950. CIMB says near-term outlook remains choppy; "unless the flow of negative news flow reverses this week, it looks like it will be another testing week for holders of equities." Majority of blue chips lower with particular weakness in property heavyweights; CapitaLand (C31.SG) down 3.0% at S$5.90, Keppel Land (K17.SG) down 2.7% at S$5.06. Broad market volume thin; losers outnumber gainers 196 to 53.

Wilmar up news of plantation purchase

Reuters) - Wilmar International, the world''s largest listed palm oil trader, rose as much as 2.6 percent to hit a one-week high on news that it will buy an edible oil business of Unilever in Africa. TheAnglo-Dutch consumer goods group said on Thursday that it has agreed to sell its edible oil business in the Ivory Coast to SIFCA and a 50:50 joint venture between SIFCA and two Singapore-based companies, Wilmar International and Olam International .

Credit Suisse and Goldman Sachs also issued bullish research reports on the Asian palm oil sector, helping Wilmar jump to S$5.22, with over 2 million shares changing hands. In its report, Goldman Sachshighlighted Wilmar as one of its top picks for its strong long-term growth potential, saying palm oil prices could rise further. "Current crude palm oil prices are ndervalued relative to crude oil and soybean oil," the bank said. CreditSuisse noted that exports of malaysian palm oil to the U.S. have increased significantly since the trans-fat labelling legislation in 2004, and that it remains bullish on palm oil prices.

"Wilmar should be a core holding for long-term investors a it offers high-quality, high-growth exposure to the palm oil sector given market leadership in its downstream businesses and strong organic growth potential," said Goldman Sachs which has a "buy" rating on Wilmar with a target price of S$6 a share.

Indofood Agri To Buy Sugar Plantation Co Stake For S$56M

Indofood Agri Resources Ltd said Friday that it is buying a 60% stake in a sugar plantation company in Indonesia for about S$56 million.

The company, PT Lajuperdana Indah, currently owns a sugar cane plantation in South Sumatra, Indofood said in a statement.

Indofood is the Singapore-based unit of the world's largest instant noodle maker, Indonesia's PT Indofood Sukses Makmur.

Source Dow Jones Newswires

JP Morgan postive on CPO

In our view, crude palm oil (CPO) prices are undervalued relative to crude oiland soybean oil, and we expect some convergence going forward. Over the last 2 months, crude oil and soybean oil prices have risen 17% and 7%,respectively, while CPO prices have gained 1%. Over this period, CPO’s price discount to soybean oil has widened from 24% to 28%. We see more upside potential for CPO prices over the next 3-6 months on higher CPO biodiesel demand, potentially higher soybean prices and a narrowing price discount to soybean oil. We maintain our positive view on the plantations sector.


Watch Indo Agri, Wilmar, Golden Agri and First Resources.

STI +0.3% On US Cue; May Rebound To 3100-Chartist

Singapore shares heading higher in early trade as better Wall Street lead sparks some buying interest; STI +0.3% at 3002.29, off earlier high of 3012.34, with resistance tipped at 10-day moving average of 3027. Several blue chips seeing good gains; best performers are CapitaLand (C31.SG) +2.6% at S$5.88, NOL (N03.SG) +2.8% at S$3.36. Technical analyst at local house tips market to head higher in near-term; "I think we will rebound to 3100 on the back of a rebound in the Dow, before we come back and test recent lows." But thin volumes and move off early highs suggest today's upside may be limited; gainers outnumber losers 121 to 84 in broad market.

Play still on resources. Noble, Olam and CPO counters.

STOCK CALL: JPMorgan downgrades Synear Food (Z75.SG) to Underweight from Overweight, cuts target price to S$0.35 from S$1.30. Broker says the frozen food maker is likely to continue to face margin pressure due to loss of market share to major rival Sanquan and rising advertising, labor costs; warns "the downside risk from these has yet to be built into the market consensus." Cuts FY08, FY09, FY10 earnings estimates by 13%, 24%, 23%, respectively. Says big target price cut reflects move to different valuation method, now uses P/E rather than DCF approach, new target implies forward P/E of 7X. Share down 6.0% at S$0.47.

Target price of 0.35 is lower than current price. Expects futher downside pressure. At 0.35, the P/E is 7X which is higher than most S-share issue.

STI Off 1.8%; Extends Fall, US Futures Bearish

Singapore shares head lower at start of afternoon session as bearish lead from pre-market Dow futures adds to already subdued mood; STI down 1.8% at 2984.45, nearing support at last week's intraday low of 2979, lowest level since March 27. AmFraser senior VP of research Najeeb Jarhom tips index to find buying support soon; "the STI should be able to hold around 2970-80, traders with a month-end/midyear window dressing view, as well as 2Q reporting season in mind and who do not expect a repeat of the 1Q series of plunges should begin to accumulate below 3000." Broad market volume remains thin; losers outnumber gainers 3 to 1.

STI +0.5%; China, Commodity Plays Up; 3056 Cap

Singapore shares holding onto gains at start of afternoon session as China market rally lifts mood, pre-market Dow futures give bullish lead; STI +0.5% at 3044.33 with resistance tipped at 10-day moving average of 3056. But marketwatchers remain cautious of calling breakout rally; "our short-term view is still that the market is rangebound between 2800-3200," says UOB-KayHian research head Nancy Wei. S-chips rallying, FTSE ST China index +3.4% at 453.16; commodity plays also doing well on continued optimism that commodities offer bright spot amid wider economic uncertainty, Olam (O32.SG) +6.6% at S$2.75, Noble (N21.SG) +4.4% at S$2.35

Singapore Complex Refining Margins Fall To 5-Week Low-Merrill

Singapore complex refining margins fell to a five-week low, suggesting fading regional demand and a pickup in supply continue to weigh on most oil products in the region, a report by Merrill Lynch showed Tuesday.

Complex refining margins in Singapore fell by $1.61 to $12.52 a barrel in the week ended June 13, while simple refining margins were down $1.95 at minus $8.36 a barrel, the lowest in at least 18 months. The weakness in simple margins was due mainly to softer fuel oil, whose refining margin hit a fresh record low of minus $31.48 a barrel.

Middle distillates' spot margins also narrowed due to rising regional supply with the maintenance season coming to an end. But gasoil margins were still the best among all products, partly because "strong near term demand from China and Australia are keeping prices on the boil", the report said. Gasoil's refining margins slipped by $1.37 to $39.47 a barrel, while jet kerosene's margins were down $1.88 at $38.22 a barrel.

Gasoline's margins remained strong, though down for the third straight week, largely because China, the largest exporter of gasoline in the region, has become a net importer since May due to continuous domestic shortages. Gasoline spot margins were down $1.84 at $13.34 a barrel.


Bad news for SPC. With a drop in refining margin, SPC bottom line could be hit as well.


Crude Oil price may be heading towards record high but if there is a real demand for oil, shouldnt there be strong demand to refine the products? The rise in Crude Oil could in a large part be due to speculation!

US Flood Damage Positive For Palm Oil Price -CS

Flood damage for corn and soya crops in U.S. midwest is good news for crude palm oil (CPO) prices, says Credit Suisse. "The crop damage in the U.S. could become a big positive catalyst for oilseed and vegetable oil prices," says broker. Notes U.S. is world's largest producer of corn and soya, too late to replant corn crop that has been destroyed. Adds, continued strength in crude oil prices, falling vegetable oils stock-to-use ratio, strikes in Argentina hitting soybean exports also positive for CPO prices. But says rising Malaysian palm oil inventories is a potential negative. Maintains Overweight call on Asian palm oil sector with Indofood Agri (5JS.SG) a top pick; rates Outperform with S$3.40 target. Indofood Agri shares closed +2.1% at S$2.42 yesterday.


Bad for
Corn - China Sun, Luzhou
Soya - Celestial, Pine Agritech

STX PO Outlook

STX Pan Ocean (V33.SG) reverses early gains, heads lower as worries over outlook for shipping rates weigh; share down 4.4% at S$2.61. Korean-listed shares (028670.SE) down 5.0% at KRW1,980. Stock had earlier shrugged off continued slump in Baltic Dry Index (BDI) as investors appeared to have taken view that weaker shipping rates priced in, but share now in negative territory, suggests some investors worried that BDI could continue to tumble, putting stock under pressure. "STX Pan Ocean's share price is a mirror image of the BDI, it's a trading stock and there's no point trying to bottom fish it when the BDI is going to keep falling; it's like trying to catch a falling knife," says analyst at local house. Foreign house analyst says parent STX Corp.'s (011810.SE) plan to issue 5.39 million common shares to raise KRW307.84 billion not impacting STX Pan Ocean share. Singapore share now below support at S$2.68 (78.6% Fibonacci retracement of rise from March 20 low of S$2.32 to May 20 high of S$4.00) with next key support tipped at March 20 low of S$2.32.

UOBKH 2H08 Strategy

UOBKH Singapore 2H08 Strategy: Staying Ahead Of Inflation
We are facing a difficult environment of slowing economic growth and rising inflation on the back of high commodity prices.

l The best thematics are companies with strong pricing power or those that can grow their revenue faster than rising costs. There include plantation and upstream oil & gas-related companies. Selected REITs will benefit from rental reversions in 2008-09. Rising interest rates, coupled with a strong loan growth, will be positive for banks. S-chip companies that have a strong brand name and are seeing strong domestic demand should stay ahead of inflation. On the flip side, we are negative on the aviation sector and neutral on traditional defensive/yield stocks whose cost increase will likely outpace their revenue growth.

l On value picks, property developers are deep in value following a sharp price decline since 3Q07. Share prices should be supported by their worst-case RNAVs despite negative sentiments in the physical market throughout 2008.

l The FSSTI will likely be range-bound in the 2,800-3,200 region in the short term. A new low is not envisaged at this stage. Our 12-month bottom-up FSSTI target is 3,630. The market's 2008 PE of 13.6x is at the bottom of its long-term historical PE band and FSSTI’s P/B of 1.70x is below Asia ex Japan's average of 2.3x. FSSTI's core EPS growth is forecast to contract 2.6% in 2008 before rebounding to a growth of 12.6% in 2009. We are OVERWEIGHT on the Singapore stock market.

Top BUYs: DBS, OCBC, SembCorp Marine, AusGroup, ASL Marine, First Resources, Indofood Agri Resources, City Developments, Ho Bee, A-REIT, CCT, Parkway Life REIT, China Hongxing, China Sports.

Top SELL: SIA

Another downgrade for STX PO

[Dow Jones] STX Pan Ocean (V33.SG) continues to slump as investors fret dry bulk shipping rates are set for seasonal weakness; share down 8.3% at S$2.77. "Our short-term positive view on rates is drawing to a close, as the spring fling gives way to the summer slump," says Goldman Sachs. Broker notes iron ore negotiations are key to timing, magnitude of shipping rate correction; says if negotiations are delayed further, shipping rates likely to correct soon, and more sharply than market expects. Advises investors to sell dry bulk shippers into strength; maintains Neutral rating on STX Pan Ocean with S$2.50 target price. Next support tipped at S$2.68 (78.6% Fibonacci retracement of rise from March 20 low of S$2.32 to May 20 high of S$4.00. Korean listing (028670.SE) down 9.2% at KRW2,070.

STX Pan Ocean Off 5.9%; S$2.82 N/T Support

STX Pan Ocean (V33.SG) down 5.9% at 2-month low of S$3.06, hurt by 2.7% fall in BDI, overall market weakness. But rebound off morning low of S$2.95 suggests bargain hunting or short-covering at work, although unlikely to help push share price into positive territory. On charts, technical indicators looking bearish, with Direction Momentum Indicator on ADX recently triggering Sell signal, while RSI still heading south but yet to reach oversold region. Near-term support at S$2.82, based on 61.8% retracement of rise to May high of S$4.00 from Jan. 22 low of S$2.09.


STOCK CALL: Credit Suisse keeps STX Pan Ocean (V33.SG) at Neutral with S$3.75 target price. Says lead indicator Baltic Dry Index (BDI) has only fallen back slightly so far but tips index to head lower in near-term due to seasonal weakness, reduced iron ore cargo as a result of China's stockpiling. Says shares in dry bulk shippers have corrected as worries priced in, but could still go lower; "we think there is still downside share price risk in the short-term on BDI weakness and thus it is too early to pick them up." Share down 6.2% at S$3.05 vs FTSE ST All Share down 1.7%. Korean-listed share (028670.SE) closed down 7.3% at KRW2,280.

OIR Property Sector Outlook

Outlook in the property sector still remains uncertain. Whileproperty price index has remained resilient, the lack of transactionvolume, low take-up rate and delay in launches by developers raised moreconcerns about a deteriorating property market. Historically, lower priceswould follow after a period of sharp decline in volume and the expectationof slower rental rates growth provide an additional catalyst to dampenproperty prices going forward. In particular, we see the high-endproperties at greater risk to further price corrections, as there is stilla substantial pipeline of projects waiting to be launched. Mass marketsegment was weak in 1Q08, most probably due to fears of oversupply afterdevelopers rushed to launch their mass market projects during the period.Going forward, pipeline of mass market launches appear limited and thisshould ease concerns of oversupply and drive take-up rate higher. Wereiterate our NEUTRAL view on the Singapore residential property sector asour expectation of price weakness in the high end and price stability inthe mid to mass market properties remain unchanged. Thus, we remaincautious over developers that have large land bank exposure in the high endmarket, like CapitaLand and Keppel Land. We are currently reviewing ourcalls on CapitaLand, City Developments, Keppel Land and UOL Group due to achange in analyst coverage.

In the STimes today, there is a report of new launches being priced 10% lower. Could this be the start of more to come?

STI Down 1.6%; Breaks Below Key 3000 Support

Singapore shares following Wall Street lead, sharply lower in early trade as resurgent inflationary, credit crunch fears grip investors; STI down 1.6% at 2997.66, goes below 3000 for first time since April 1, next support tipped at 2950. "Sell in May and go away looked like the right call, people are panic selling and there are no buyers around to support the market," says strategist at local house. Most blue chips in negative territory with property stocks particularly weak, likely on renewed global economic jitters; Hongkong Land (H78.SG) worst performer, down 4.9% at US$4.44. Broad market volume slightly above yesterday's but still low by normal standards, losers outnumber gainers roughly 5 to 1

DJ MARKET TALK: ABN Amro Starts China Milk At Buy; S$1.10 Target

STOCK CALL: ABN Amro initiates China Milk (G86.SG) at Buy, sets S$1.10 target price. Broker says raw milk, bull semen producer is good play on rising food prices in Asia with rising disposable incomes in China driving demand for dairy products. "China Milk is an excellent play on the Chinese food theme: it is the largest company in China in the bull semen, cow embryo and raw milk businesses, in terms of market share." Adds valuation undemanding, stock trading at steep discount to Asian agricultural peers. Share currently up 6.2% in active trade at 2-week high of S$0.775.

STI +0.6%, Still In Tight Band; 3200 Resistance

[Dow Jones] Singapore stocks manage to cling on to gains, but upside appears limited as market still unable to shrug off recent sluggish tone, judging from thin volume. STI +0.6% at 3163.75 midday after drifting in tight 3162-3184 band for whole morning. Resistance remains at 3200. "It's very rangebound. There's no incentive. The market is looking for direction but there's not much," says trader at bank-backed brokerage. FTSE ST All Share Index +0.6% at 807.31. New listing China Taisan Technology (F2X.SG) most active on SGX with 54.3 million shares traded, +2.1% at S$0.245.

Lehman Downgrades STX Pan Ocean To Underweight

Dow Jones] STOCK CALL: Lehman Brothers downgrades STX Pan Ocean (V33.SG) to Underweight from Equalweight, citing limited upside to reduced target price of S$3.10 vs S$4.00 previously. New target, based on sum-of-parts valuation, assumes fleet value multiple of 1.3X vs 1.5X earlier. Says larger-than-expected supply imbalance in dry bulk shipping industry likely to drag down sector-wide freight rates, earnings from 2009, hence hurting STX. Expects share price to remain volatile in near term due to seasonally weak BDI, with upside expected during seasonal end-3Q BDI bounce. Stock off 0.8% at S$3.64. Korean listing (028670.SE) closed down 0.6% at KRW2,680

Olam Off 7.0%; Confirms Dairy Farmers Interest

Olam (O32.SG) shares heading lower as convertible bond issue, news of potential M&A unsettles investors; stock down 7.0% at S$2.77 with support tipped at S$2.60 (May 26 low). Commodities player confirms it is mulling bid for Australian branded dairy business Dairy Farmers; CFO says on conference call, "our M&A team is having a look at it, but no formal bid has been made by us." Analysts estimate Dairy Farmers could fetch up to A$900 million, with rising commodity prices generating lots of interest in the takeover target. CFO also confirms that company has submitted bid for assets of Ivory Coast Cotton producer La Compagnie Cotonniere Ivoirienne, with Ivory Coast newspaper Fraternite Matin reporting assets worth around US$19 million. While investors may like that company is keen to expand its footprint as it rides the soft commodities boom, moves being overshadowed at present by worries over dilution from fund raising, execution risks.

STI May Open Up But Retreat Later On Short Sales

Dow Jones] Singapore stocks may repeat Wednesday's pattern of opening higher, aided up further pullback in oil prices, and giving up gains later in day, as Wall Street's mixed performance overnight not expected to offer any clear direction for investors. Market volume likely to remain thin as players lie low given lack of leads. "I think nothing much is going to happen. People are shorting at every available opportunity. The market is more inclined towards short positions," says local house trader. Immediate support for STI at 3100, resistance at 3180; closed down 0.6% at 3134.80 yesterday.

Phillip Sec Raises Sinopipe Target To S$0.60

Phillip Securities raises Sinopipe Holdings (X06.SG) target price to S$0.60 from S$0.575; reiterates Buy call. Broker says target price upgrade reflects recent win of CNY660 million build-transfer-operate piping and infrastructure contract. Says contract win was much larger than expected, outlook promising, "significant further earnings growth looms." Says stock looks attractive with cheap valuation, trades at FY08 P/E of only 5.5X due to rapid forecast earnings growth. Adds revised target price only factors in phase 1 of the contract as details for phases 2 and 3 are yet to be announced. Shares currently down 1.2% at S$0.405.

Mid Day Market Update

[Dow Jones] Singapore blue chips may close tad higher as bargain hunters nibble away amid pullback in oil prices. STI now +0.5% at 3169.15, with most components higher, but any further gains likely to meet resistance at 3200 as leads few. "The office is so damned quiet, I'm almost falling asleep," local dealer says of his house's trading desk. Shares in broader market also tad firmer, with FTSE ST All Share Index +0.4% at 808.31. Still, thin market volume suggests investors generally sitting out session.

Cosco Corp May Be Surprise Petrobras Winner -CS

[Dow Jones] STOCK CALL: Cosco Corp. (F83.SG) may emerge as the
surprise winner of Petrobras (PBE.BA) rig boom despite Keppel Corp.
(BN4.SG) being the first yard to win one of Petrobras 12 rig charters, says
Credit Suisse. Broker says Norwegian driller Sevan (SEVAN.OS), tapped for a
Petrobras charter, has 2 newbuild options with Cosco; "Sevan is already
contracted to Petrobras and Petrobras has awarded a second semi-sub charter
contract to Sevan. It would not surprise us if Sevan were to use its option
with Cosco for the construction of the new semi-sub." Broker tips Cosco to
secure at least one, if not two contracts, conservatively worth US$170
million apiece. Maintains Outperform rating, S$4.40 target price. Share
+0.6% at S$3.36.

If Cosco were to win these contracts, it would be a huge boost to its share price. Keep an eye out for the news and results

Wilmar falls after UBS downgrade

Wilmar International fell as much as 3.9 percent after UBS
downgraded its rating for the palm oil firm to "neutral"
from "buy", citing a lack of short-term upside to its share price.
Wilmar, the world's largest palm oil trader, hit an intraday
low of S$5.20 with over 1.8 million shares traded.
UBS analyst Alain Lai said in a broker note Wilmar's share
price is fairly valued after it rose 52 percent from a low of
S$3.60 on March 18.

But he raised the plantation firm''s price target to S$5.90
from S$4.55, citing long-term exposure to a surging Chinese
oilseed and edible oil demand.

"We think there is strong upside to Chinese edible oil and
soybean demand. Wilmar''s 20-25 percent marke share of the
Chinese soybean crushing market and 40 percent share of palm oil
refining capacity imply it is best positioned to benefit," Lai
said.

Potential currency devaluation in Vietnam - Keppel Land

Vietnam’s inflation rate soared to 25% in May, the highest since 1992. There are rising concerns that this may result in a financial crisis and the Vietnamese currency, the dong, could see a hefty devaluation. There are talks that Vietnam’s currency crisis could rival Thailand’s currency crisis in 1997. We have examined Singapore stocks in our coverage and there are four stocks that significant business presence in Vietnam. They are Keppel Land, Ascot Residence Trust, Low Keng Huat and SembCorp Industries.

Singapore Property Developers
Singapore property developers have ventured into Vietnam across all major property segments that include residential, office, retail, hotel and serviced residences. The table below provides the exposure of the property developers under our coverage. Keppel Land is the most exposed to Vietnam drawing 19% of its gross RNAV from Vietnam. The exposure of other property developers is quite small and limited up to 3% of their gross RNAV.

Keppel Land
We understand from Keppel Land management that the company does not borrow funds for its Vietnamese projects locally due to the high funding costs involved (around 12-15% levels). Instead it follows the approach of group borrowing mainly in S$ at relatively low interest rates (blended borrowing rate around 3.2% as at 1Q08) to fund the needs of its various subdivisions. This approach however is prone to risks associated with a severe devaluation of the Vietnamese currency.
We further understand that prices and rentals are quoted in US$ but the collection is done in Vietnamese Dong offering some protection against currency fluctuations. However, in the event of a severe devaluation of the Vietnamese Dong, the affordability constraints will pose a downward pressure on the prices and rentals.

Mid Day Market Update

Singapore stock market bogged down by investor inertia as Wall Street's overnight fall crimps appetite, keeping players sidelined until firm catalysts emerge. STI down 1.2% at 3150.83 midday after drifting in tight 19-point band for entire morning. Immediate support tipped at 3140, followed by 3100. AmFraser Securities' Najeeb Jarhom says upside for STI in near term may be capped at 3200 as investors expected to take profits around that level after accumulating at 3100; "this pattern may continue throughout much of this holiday and soccer-filled month while waiting for another round of window-dressing at end-June." UEFA Euro 2008 kicks off June 7. Overall market volume thin, with only 566.7 million shares traded. FTSE ST All Share Index off 1.0% at 803.58

DJ MARKET TALK: Goldman Cuts SPC Target To S$8.65 From S$9.20

STOCK CALL: Goldman Sachs cuts Singapore Petroleum (S99.SG) target price to S$8.65 from S$9.20; maintains Buy rating. Broker says new refinery capacity coming on stream is likely to depress refining margins; "we believe that Reliance Petroleum's new refinery, representing almost 50% of our estimate of global oil demand growth in 2009, is likely to have ramifications for refining margins globally." Broker adds gasoline spreads likely to be particularly affected as Reliance's gasoline and diesel output expected to be entirely exported out. Cuts FY08, FY09 earnings estimates by 15.8%, 23.4%, respectively to account for lower assumed refining margins, which leads to lower earnings target price. But says Singapore Petroleum remains one of broker's preferred oil refining plays globally with stock still on conviction Buy list. Share closed down 1.6% at S$6.79 yesterday

Ripples from a potential Vietnam meltdown

CIMB-Singapore Strategy
Investors have been concerned about exposure to Vietnam among major Singapore stocks recently. This is especially so after Vietnam’s inflation rate galloped to +25% recently and the dong’s 12-month forward rates weakened suddenly last week. We profile Singapore stocks with major exposure to Vietnam. A few property stocks are more vulnerable than others, namely ART, F&N and KepLand. Most of the other sectors have limited exposure. Two of the three banks in Singapore also bought 10% stakes in Vietnamese banks not too long ago but contributions are very small. The other stock with some exposure is Olam. Maintain Neutral on the Singapore market with an unchanged STI target of 3,480 for end-2008

DJ MARKET TALK: Take Profits On Wilmar, Straits Asia -DBS Vickers

[Dow Jones] Investors should consider booking gains in some Singapore palm oil and commodity plays after their recent run up, says DBS Vickers strategist Yeo Kee Yan. Broker says plantation stock Wilmar (F34.SG) is now trading close to fair value, advises investors to exit stock. Adds, First Resources (EB5.SG) is preferred Singapore palm oil play as valuation still looks very attractive. Strategist says coal miner Straits Asia Resources (AJ1.SG) also now looking stretched with stock trading above fair value, suggests investors book profits. Wilmar down 2.0% at S$5.45, First Resources +3.4% at S$1.21, Straits Asia +1.2% at S$4.14.

Genting Intl

(Bloomberg) -- Genting International Plc, owner of
the biggest U.K. casino operator, rose the most in six months in
Singapore trading after announcing a venture with Mark Burnett
International Inc. that will develop game shows and reality
programs in Asian countries.
Genting gained 2.5 Singapore cents, or 4.1 percent, to 63.5
cents as of 11:10 a.m., rising the most since Nov. 30. The stock
is headed for its highest close since Feb. 15. Genting shares
have fallen 6.6 percent this year, compared with the 7.7 percent
decline in the benchmark Straits Times Index.
The 50-50 venture, called Mark Burnett Productions Asia Pte
Ltd., will use the facilities and attractions at Resorts World
at Sentosa, an integrated resort being built by a unit of
Genting, for some of its productions.
Mark Burnett produces the reality-television shows,
``Survivor'', ``The Apprentice'' and ``Contender.''
Genting International is a unit of Genting Bhd., Asia's
biggest publicly traded casino operator.

Singapore Hot Stocks-Genting Int''l soars to 5-mth high

Genting International rose as much as 10.7 percent to a five month high of S$0.675 withover 81 million shares traded, with some dealers citing eased concerns over construction costs for a Singapore casino. Malaysian parent Genting Bhd posted on Thursday a less-than-feared fall in first-quarter earnings.

"The belief is that the development of casino cost over-runs is no longer a concern," a Singapore based dealer said. Sister company Star Cruises gained as high as 8.9 percent to S$0.245 with more than 13 million shares changing hands. Genting International is building a casino at a cost of up to S$6 billion ($4.4 billion), about S$800 million or 15 percent above its initial budget, due mainly to higher construction expenses.

Last month, Genting''s Chairman and CEO told Reuters he does not expect further increases in cost for the casino. "The construction progress at Resorts World at Sentosa is on schedule at the revised budgeted costs of S$6 billion and all the funding for the project has been secured," Kim Eng Securities said in a broker note.

STI +0.1%; Reverses Early Loss, Nears 3200

Singapore shares erase early losses to move slightly higher in early trade; STI up 0.1% at 3197.05 vs session low of 3182.14 with immediate resistance tipped at 3200. Index bucking falls for other regional markets as bank heavyweights head higher, but CIMB says charts tip capped upside; "with its indicators showing mixed signals, we do not think that the current rebound would be strong." Support tipped close to 10-day moving average at 3160 if index heads into negative territory again. Broad market volume thin, similar to last week''s levels, with losers just outnumbering gainers 119 to 113.