Manufacturing, which accounts for more than a fifth of the economy, gained 10.5 percent from a year earlier after a revised 16.2 percent drop in May, the Economic Development Board said in a statement today. That was more than the 8.6 percent median estimate of 14 economists surveyed by Bloomberg News.

Singapore is vulnerable to swings in pharmaceutical production by companies such as Sanofi-Aventis SA and changes in overseas demand for manufactured goods, making it the most volatile Asian economy according to Credit Suisse Group AG. Exports are forecast by the government to grow in 2011 at less than half last year's pace.

The growth in drugs output "will provide a much needed jab in the arm for the ailing manufacturing sector and help pick up part of the slack from a sluggish electronics sector," Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore, said before the report. "Electronics manufacturers have remained cautious and are holding back their production."

North American orders for semiconductor equipment fell 4.4 percent in June from a month earlier, a trade group report showed. The book-to-bill ratio, a gauge of industry health, was 0.94, meaning chip-equipment companies received $94 in orders for every $100 in sales. A ratio below 1 indicates a contracting market for chip-equipment tools.

Eoin Treacy's view Singapore has one of the strongest currencies in the world so it is admirable that is manufacturing sector can hold its own on aggregate with the rest of the world. At 20% of the economy manufacturing has paled in comparison to the weight now occupied by financial services. Tourism is now also a growth market for Singapore.

The Singapore Dollar hit another new high against the US Dollar today and remains in a consistent medium-term uptrend. Whereas only a decade ago parity was a fanciful idea, it is becoming an increasingly likely proposition over the medium-term. A sustained move below 80¢ would be required to question this hypothesis.

The strength of the currency has acted as a headwind for the domestic stock market but when viewed from the perspective of a foreign investor it has performed considerably better; surmounting the 2007 peak in US Dollars last week. The Index currently trades on a reasonable P/E of 10.77 and dividend yield of 2.81%. It has rallied to break the eight month progression of lower rally highs and a sustained move below 3000 would be required to check potential for additional upside.

In the financial sector OCBC with a yield of 3.04% has been consolidating in the region of the 2007 peak and mostly above the 200-day MA. A sustained move below S$9 would be required to question potential for a successful upward break. United Overseas Bank yields 2.93% and hit a new 12-month high today. It has been ranging between S$18 and S$20 since late 2009 and a sustained move below the former would be required check medium-term upside potential.

United Overseas Land is one of the better performing real estate companies. It has a P/E of 4.51, dividend yield of 1.51% and hit a new recovery high today; reasserting the medium-term uptrend.
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As with so many other countries, healthcare is among the leaders in Singapore. The FTSE ST Healthcare Index took out the 2008 peak last year and has been consolidating mostly below 1400 since November. It has held the progression of higher reaction lows and a sustained move below 1300 would be required to question potential for a successful upward break. Raffles Medical Group has a similar pattern. Bio Sensors International has held a progression of higher reaction lows since late 2008 and a sustained move below S$1.20 would be required to question the consistency of the medium-term uptrend. OSIM, in the health food and nutrition sector, has rallied from the lower side of its 7-month range and is currently testing the 200-MA. A sustained move above it would confirm a return to medium-term demand dominance.

The FTSE ST Consumer Services Index retested its 2007 peak late last year and pulled back to the region of the 200-day MA. It continues to steady in the region of 900 and a sustained move below it would be required to question potential for some additional upside. Elsewhere in the consumer sector, Hsu Fu Chi International does not appear to be particularly liquid but has a stunning consistent medium-term uptrend nonetheless. Asia Pacific Breweries has probably entered a process of mean reversion following an impressive acceleration. Dairy Farm International Holdings, despite some volatility over the last six months, has held its progression of rising reaction lows. These would need to be taken out on a sustained basis, with a move below S$7.50 to question medium-term uptrend consistency. Fraser & Neave has been consolidating in the region of the 2007 peak since late last year. A sustained move above S$6.33 would break the six-month progression of lower rally highs and confirm a return to medium-term demand dominance.

Palm oil producer, Golden Agri-Resources has found support in the region of the 200-day MA on successive occasions since 2008 and rallied to break the short-term progression of lower highs last week.

Singaporean telecommunications stocks, in common with those in the USA and Europe, have some attractive yields. The FTSE ST Communications Index has been largely rangebound since late 2009 but broke upwards last week and has improved on that performance this week. A clear downward dynamic would be required to check current scope for additional upside. Singapore Telecommunications (4.74%) has a similar pattern. MobileOne, with a yield of over 5%, has been a clear outperformer. It is currently somewhat overextended relative to the 200-day MA but a sustained move below S$2.4 would be required to begin to question medium-term uptrend consistency. Starhub, with a yield of 6.94%, continues to trend consistently higher.

Coal miner, Straits Asia Resources, has a great deal of commonality with global coal companies. (Also see Comment of the Day on July 21st) . It has held the breakout above S$2.80 and a sustained move below it would be required to question medium-term upside potential.

Casino operator Genting International needs to sustain a move above S$2 to question potential for additional downside.

Jardine Cycle and Carriage has rallied impressively over the last two months but is becoming increasingly overextended relative to its 200-day MA. The first clear downward dynamic, sustained for more than a day or two is likely to indicate that a high of medium-term significance has been reached. Jardine Matheson has a similar pattern.

Keppel Corp, with a yield of 3.6%, found support last month in the region of the 200-day MA and a sustained move below S$10.35 would be required to question medium-term upside potential.