Update...

Market commentary

-with US market closed last night, STI will likely keep to a tight range
-"correlation between the STI and DJI been near perfect for the several months"

Theme
-shipping & marine sector: kepcorp, sembmar, ezra, cosco, yangzijiang
-CPO:goldenagri, indoagri, wilmar

SIA

-international air passenger traffic dip 1.3% oct yoy
-air frieght traffic dip 7.9% oct yoy

outlook
-news of global GDP contraction, global traffic dip and capacity cuts by Quantas
-likely to suppress share price as demand remains on the downtrend

Offshore & marine

-more order cancellations going forward

kepcorp
-9.6% of order books are being reviewed including established regular customers

Ezra
-re-thinking $69m orders signed with Kepcorp
-re-thinking 4 vessel orders with Pan U marine & shipyards in Norway

conclusion
-fears of more order cancellations going forward will trigger sell down in
-O&M counters anticipating further down revisions in earnings forecast

MI reits

-91% of total debts due in April 09

catalyst
-possible further downgrade by moody
-outstanding put & call option in business park will lift gearing from 39% to 47%

conclusion
-uncertainty in refinancing, possible dilution, downgrades all post as negative
catalyst on MI's share price

Advance SCT

-profit guidance for 2H08

dip in copper price
-likely to suffer from inventory impairment and losses in copper business

due diligence
-special audit have detected likely additional doubtful debt provision

conclusion
-with downside expectations, Advsct price will likely be depressed

Short Selling

-SGX seeks public view on transparency
-mark short orders and publish statistics daily
-short positions >1% on individual security required to report positions to
exchange monthly

Int roller

-won 3 airport projects in India worth $6m to be completed in 6 months

prospects
-India government targets 500 airports, budget of USD50b in 10 years

fundamentals
-strong cash position but concerns on operating cash flows
-cash more then short term debt and covers 78% of total debts
- running on negative operating cash flow for 9 months

risks
-volatile earnings considering last 9 months loss of $2m versus $21m profit yoy
-with political issues and demand slowdown, the risk of airport projects delayed
by government is high

conclusion
-avoid counter considering the lack of liquidity and potential earnings & CF risks

PNE ind

-FY08 profit dip 24% yoy

fundamentals
-strong cash position but concerns on cash flows
-cash covers 94% short term debts and 73% total debts
-flat operating cash flow and net out flow of $3.7m

prospects
-no growth catalyst going forward as business competitive with 4% net margins

conclusion
-avoid on poor liquidity, cash flow risks and lack of positive catalyst

Morning Conference

1. DBS
1. Dip due to fears in capital raising possibility
2. Potential impairment of goodwill in 4Q results of $50-$100m
3. PBv will jump from 0.7x to about 1x
2. olam
1. foreign house raised target to $1.7 with buy call
2. gearing reduced from 5x to 2.7x
3. impact from banks not issuing letter of credit to traders is insignificant
4. 90c level held well
3. kepcorp
1. 3 contracts amounting to 10% of order book, $1.3b under review

i. semi sub from Scorpion

ii. 2 jackup from Seadrill

iii. 1 specialized tuck from Subsidiary of Ezra

2. impact on delivery for 2010 is 20%
3. impact on earnings is 3-6%
4. foreign house target $3.4 sell
3. sembmar
1. 32% of contracts are unsecured and holds the risks of defaults

STI
-down 0.7% at 1698 as compared to hangseng up 2.2% @ midday
-partly due to O&M sector drag after kepcorp's news on orders review
-window dressing later in the day as today's the last trading day of the month
-(Nomura)
-SG earnings forecast still too high

valuation
-PB 1x at historical lows, PE 8.7x near Asian crisis levels

risks
-4% EPS dip FY09 concensus too optimistics
-larger earnings erosion from unexpected provisions at banks
-impairment of landbanks by developers

selection
-strong balance sheet and high dividend yield
-ex. UOB, Sembmar, Singtel

Japan
-industrial output fell 3.1% in oct above concensus of 2.5%
-expecting record 8.6% contraction for 4Q
-retail sales dip 0.6% oct yoy above concensus
-household spending dip 3.8% oct yoy, below concensus of 3.4%

outlook
-recession in 3Q08, economics warns of it being longer and deeper

key markets
-US likely to follow in 4Q and China slowing growth concerns

Targets for the day
---Starhub hold - BNP $2.25 vs $3.71
-bid for EPL rights hit earnings growth and margins
(Source DJ newswire)
- ---Venture - Macquarie $8.3 vs $15
-customer growth, free cash yield 16%, CDO issue smaller, good BS
---Singtel - UBS $3.09 vs $3.39
---M1 - UBS raised to $2.4 vs $2.21
---Ezra - OCBC $1.17 (prudent cash management)
---DBS - UBS maintain buy $15.3 target
---Sembcorp - Goldman cuts to $2.05 vs $2.5
---sembmar - CIMB $2.28 vs $3
---Kepcorp - Goldman $3.4 vs $4.85
---STX - ML calls underperform
---Hongguo - Citi 19c vs 48c

Marco polo marine
-earnings FY08 jump 33% yoy

fundamentals
-strong margins but unattractive cash position
-net margin 24%, strong operating cash flow,
-cash covers 50% short term debt and 12.5% total debt

catalyst
-9 new ships in 2009 will be a drag considering the bleak demand and oversupply

SembMar
-Seadrill, client of kepcorp reviewing orders is also a client of sembmar
(Amfraser)
-4th nov 08, yet to be chartered orders from Seadrill amounts to 11% of order book
-earnings impact estimate 8% FY09 and FY10

Ezra
-Capex restructure inline with demand outlook
---reconsidering vessel order of $69m from Kepcorp and another for delivery in 2010
---net of 3 new vessel order for next 2 financial year

fundamentals
-
---strong cash flow, cash position and margins
---profit grow 157% FY08 yoy
---consistent operational cash flow
---net cash position covering short term and total debts at 181% and 112% respectively
---FY08 net margin of 65%

others
-Little concern on fleet maintainance and re contracting
---young fleet of average 2years
---average contract period of 4.5years

Valuation
---PB 0.6x PE 1.3x P/cash 1.5x

conclusion
-proactive management in protecting shareholders value a plus
---strong fundamentals and little expense concerns going forward reduces solvency
-risks, ability to maintain dividend payout and ability to make cheap acquisitions
-OCBC place a target $1.17 as at 28 nov 2008

money supply
M1-currency in active circulation and demand deposits
M2-M1 + fixed and savings deposit
M3-M2 + net deposits at non bank institutions