SG Market

SG Market: Spore shares are likely to rise after firm close on Wall Street as Portugal's better-than-expected debt auction alleviated some sovereign debt concerns over the euro-zone. We see the next resistance for the STI at 3280 with 3200 acting as short term support. Materials & agricultural plays may fare well after commodity & oil prices rise overnight & markets may have their eye on US$100/barrel oil again.

KepCorp & SembMarine may benefit from newsflow that Hercules Offshore is considering 2 new harsh environment rigs for delivery in 2013. Ezra unlikely to stir market after reporting unsurprising 28% drop in 1QFY11 earnings & new charters. News of tropical cyclone forming in Western Australia poses further problems for the mining sector and does not portend well for Ezion & Ausgroup, which has exposure in the region.

Stock ratings:
* STX OSV: Credit Suisse initiates at Buy with $1.55 TP.
* Palm oil: Deutsche raises CPO price assumptions by 10% to RM3300/mt for FY11E, underpinned by tight supplies, rising demand. Maintains Buy on IndoAgri (TP $3.70), Golden Agri (TP $0.90).
* CapitaLand: Nomura upgrades to Buy, raises TP to $4.37 from $4.25. Positive on China, while valuations are attractive.
* Gallant Venture: DBSV to hold non-deal roadshow in the US over 13-14 Jan.

Stock highlights:
* Ezra: decent operating results for 1QFYAug11, with higher sales and margins. But net profit tumbled 28% yoy due to weak associate contributions (mainly EOC). Still mgt retains optimistic outlook. Also announces new charters worth up to US$73m in total for 3 of its offshore support vessels
* Yangzijiang: Update on contracts won between 1 Sep - 31 Dec 2010. Total of 15 shipbuilding contracts (dry bulk carriers) worth US$415.3m.
* NOL: shipping consultant, Drewry highlights container shipping profits set to halve this yr to US$8b from est US$17b in 2010, as liners fight for market share and new ships come onstream.
* Keppel / SMM: Hercules Offshore considering to order 2 new harsh environment jack-ups from a Spore yard.
* Olam: Cargill tripled profits in its 2Q, boosting the share prices of US-listed supply chain mgrs last night. Interest may spillover to Olam today as well.
* Lian Beng: 1H net profit doubles to $22.6m.
* DBS: CEO says net interest margin may improve later this year if interest rates start rising and as the repricing gap for its mortgage-loan book narrows.
* Ezion / Ausgroup: Cyclone in Western Australian may disrupt operations there.