Singapore market (13 Dec 12)

Singapore market: may open slightly higher, on optimism about the Fed’s plans to buy more US$45 b a month of Treasury securities starting in Jan, matching forecasts from economists in a Bloomberg poll. The Fed also plans to maintain its accommodative policy “as long as needed to promote a stronger economic recovery in the context of price stability”, saying rates will stay low “at least as long” as unemployment remains above 6.5% and if inflation is projected to be no more than 2.5%. The thresholds replace the Fed’s earlier view that rates would stay near zero at least through the middle of 2015. Bernanke said tying the outlook for interest rates to economic variables is a better way to communicate the policy outlook than using a time horizon because markets can “infer our how policies will evolve.” In the region, Kospi and Nikkei are up 0.6% and 1.2% respectively, at 8.20am. Technically, the STI continues to test new highs following the breakout above the key resistance-turned-support at 3,111. While near term momentum remains positive, we highlight that the indicators are starting to look stretched at overbought levels, hence traders would continue to stay nimble in view of the possibility of a slight pullback at some point. Seeing more corporate news flow today. The rig builders may be in focus, after Keppel Corp announces a US$420m contract from Mexican national oil company Pemex, and after SMM provides color on Phase II of its new integrated yard facility. STX OSV and STX PO may see continued interest after parent STX Group says it is in talks about selling its stakes in the two companies to pare debts. Biosensors may see price support on positive broker calls by Nomura and Maybank KE. Far East Orchard inks MOU to explore forming JV co with Australian property developer Toga property, to manage the hotel and services apartment assets.