(SINGAPORE) Analysts are expecting corporate Singapore to continue to turn in solid numbers in the coming second quarter reporting season, but a lot of the positives are already priced in and investors may actually see the good results as an opportunity to take some profits off the table.

Still, if there are going to be any positive surprises, it will be in the property, and possibly construction and banking sectors.

'For property, the big boys should continue to do reasonably well,' said Song Seng Wun, CIMB-GK's head of research. But the magnitude of surprise, if any, may not be as great as in the first quarter.

For the period between January and March, many property companies surprised on the upside, and that led to quite significant upgrades in their earnings per share, he said. 'For the second quarter, we may not see the same kind of upgrades.'

Yang Sy Jian, incidentally serving his last day last Friday as UOB-Kay Hian's head of research after close to 20 years in the broking firm, thinks there is still room for property stocks to turn in better-than-expected results.

'New projects continued to be launched at much better prices. Then there's also the possibility of revaluation surpluses boosting bottom-lines,' he said.

Meanwhile, the construction sector will show the strongest performance when the government releases Singapore's second quarter GDP numbers this week, said Mr Song. But the big profits may not yet show up in construction companies' financial statements as contracts for the integrated resorts are only just being awarded. 'It is still early days yet for construction companies, but the shares have already reflected the rosy prospects,' he said.

Mr Yang, however, is more sanguine and thinks some numbers in the construction sector may come in better than expected.

Daiwa Institute of Research's report on the Singapore economy, with the catchy headline 'Welcome back to boom town', said it expects the construction sector to expand by 15 per cent year-on-year for 2007.

'But the 'risks' here are clearly on the upside, as reflected in the very strong pipeline of contract awards, which suggest that the construction sector could expand by 20 to 30 per cent year-on-year over the next 12 months,' it said.

As for banks, their outlook continues to be healthy. Kim Eng Research, in a report entitled 'Sunny Horizon', said Singapore banks are poised to benefit from Singapore-dollar loans growth.

Business loans, building and construction loans and housing loans are all growing strongly. Banks may also pleasantly surprise on their fee-based income, said Mr Song, particularly UOB and OCBC.

Stock-broking firms also are set to reveal strong sets of results given that trading volume on Singapore Exchange rose 110 per cent in the first half of 2007, said OCBC Investment Research's Carmen Lee. In value terms, a total of $265.7 billion worth of transactions were done in the first six months of this year, just shy of $290.9 billion for the whole of 2006.

Ms Lee expects the second quarter earnings of UOB-Kay Hian, Kim Eng Holdings and GK Goh Holdings to exceed the 35 per cent to 89 per cent improvement chalked up in the first quarter.

A question mark, however, remains for the manufacturing and electronics sector. UOB-Kay Hian's Mr Yang thinks some of the plastic injection moulding companies and contract manufacturers may turn in strong results. But Mr Song's view is that results will be mixed with the positive numbers likely to come through only in the second half of the year.

So overall, how much of the bullish outlook has been reflected in the stock price? In terms of stock market returns, the construction sector is the best performing sector in the last one year. It surged a whopping 185 per cent. In comparison, the property sector managed 101 per cent, while the Straits Times Index advanced 51 per cent.

But despite its strong performance in the last 12 months, according to data from Bloomberg, the construction index's 10-year return only worked out to 0.5 per cent per annum.

The best performing sector in the last decade is hotel, with just under 22 per cent return per annum. It is followed by multi-industries (16.1 per cent) and finance (13.6 per cent).

Both Mr Song and Mr Yang agree that current stock prices are already reflecting the healthy prospects. And given its strong market performance in the last 12 months, Singapore may not offer as much upside as other markets in the short term.

'But over the longer term, Singapore still has the strongest earnings drivers among the regional economies,' said a foreign fund manager. The earnings drivers are primarily domestic factors, such as the development of the integrated resorts, the increase in population, and the continued resilience in property prices.