SINGAPORE (Oct 12): DBS Vickers warns that most companies might continue to post disappointing earnings for the coming 3Q reporting season.

The brokerage reminds investors to keep note on the level of provision and non-performing loans that the banks will be reporting. They should also see how plantation companies, consumers companies and rig builders are coping with margins pressures.

Furthermore, the volatility of regional currencies will affect the earnings of plantation companies and also REITs with regional assets, says DBS Vickers. The rig builders are also bracing themselves for possible order cancellations or rescheduling.

“The only bright spot could come from better earnings from airlines and shipping companies, as we expect the positive impact of lower fuel costs to filter through,” states DBS Vickers in an Oct 12 note.

The brokerage recommends stocks with better earnings visibility, or possibility of higher dividends. The list includes Thai Beverage, Riverstone Holdings, Sheng Siong, Sembcorp Industries, ST Engineering, CapitaLand, Singapore Airlines, and Venture Corporation.

Meanwhile, with the US rate hike not likely till next year, DBS Vickers sees the Reits as a “temporary shelter” for investors seeking yields. Its recommends Mapletree Greater China Trust and Frasers Centrepoint Trust, for their ability to offer sustainable growth.