Daily Morning Watch - 28 August 2012

SINGAPORE

Asia Pacific Breweries Ltd (APB): Heineken said it bought 845K shares, or 0.33%, of the Co at S$53 per share through open-market purchases, raising its direct holding in the Co to 13.16%.

Olam International (OLAM): FY results expected.

US indices fell on Monday pressured by commercial professional services and transportation sectors. On the US economic data front, Dallas Fed Manufacturing Activity index improved to -1.6 in August (-6.5 expected) from -13.2 the previous month. Looking at some major US company news, Tiffany & Co (TIF +7.2% to $62.71) reported for its 2Q ended July 31 net income of $92M or $0.72 per diluted share compared to $111M or $0.85 per diluted share (ex-items basis) a year ago on sales up 2% YoY to $887M. In other news, Apple (AAPL +1.88% to $675.68): a US Jury awarded the Co $1.05B in a patent case against Samsung who will appeal the ruling. Separately, Hertz (HTZ +8.06% to $14.21) agreed to acquire Dollar Thrifty Automotive Group (DTG +7.51% to $87.08) for $87.50 a share in cash or $2.3B in total.

In Europe, IFO index regarding business climate in Germany dropped to 102.3 in August (102.7 expected) vs 103.2 in July. Still in Germany , import prices increased 0.7% in July (+0.9% expected) vs -1.5% in July. Regarding the stocks, Q-Cells jumped as Hanwha Group agreed to acquire the Co. This morning, the Nikkei225 index opened slightly higher, and is currently challenging the support of its 10-day moving average.

CHINA - HK

Hong Kong 's mortgage loans drawn down fell 20.0% MoM to HK$16.1B during July vs +3.6% in June according to the Hong Kong Monetary Authority. Mortgage loans approved in July dropped 8.1% MoM to HK$19.5B including HK$4.3B (+2.1% MoM) in primary market transactions and HK$12.7B (-9.9%) in secondary market transactions. The mortgage delinquency ratio remained unchanged at 0.01%.

Foxconn International Holdings (2038) said 1H net loss widened to $226M from $17M a year earlier on turnover of $2.5B, down 16.4%. The Co pointed out: "Market dynamics shifted drastically and created tough challenges for some industry players as well as the Group. Though we spent major efforts in soliciting new customers' businesses and streamlining our operations, it was clear that our total capacity was still over our demand level."

BYD Co (1211)'s 1H net income plummeted 94.1% YoY to 16M yuan on turnover of 21.4B yuan, down 0.4%. The Co forecast 9-month net income to drop 75-95%, pointing out: "The demand in China 's automobile industry is expected to remain weak with more intense market competition, (...) The performance of the handset components and assembly business is expected to decline (...) due to decline in sales at major customer."

Angang Steel (347) swung to a 1H net loss of 2.0B yuan vs a net income of 220M yuan a year before on turnover of 39.4B yuan, down 15.0%.

ENN Energy (2688) reported 1H net income up 16.1% YoY to 730M yuan on revenue of 8.8B yuan, up 21.8%. Piped gas sales rose 32.2% to 5.1B yuan while gas connection fee revenue was up 7.2% to 1.7B yuan.

Sinopec Yizheng Chemical Fibre (1033) posted 1H net loss of 215M yuan vs net income of 585M yuan a year earlier on turnover of 8.3B yuan, down 19.4%.

China Longyuan Power Group (916) announced 1H net income up 3.6% YoY to 1.5B yuan on revenue of 8.4B yuan, up 8.3%.

Hunan Nonferrous Metals (2626) swung to a 1H net loss of 70M yuan from a net income of 166M yuan in the previous year on revenue of 11.5B yuan, down 4.3%.

China Southern Airlines (1055) said 1H net income plunged 84.6% YoY to 424M yuan and operating profit dropped 30.0% to 1.8B yuan on revenue of 45.4B yuan, up 13.7%.

Guangzhou Automobile Group (2238) said 1H net income fell 13.7% YoY to 1.4B yuan and operating loss widened to 588M yuan from 308M yuan on revenue of 5.5B yuan, up 5.7%.

Shimao Property (813) unveiled 1H net income down 5.5% YoY to 3.1B yuan on turnover of 13.7B yuan, up 12.4%.

Parkson Retail Group (3368) announced the acquisition of 95.91% of Qingdao Parkson, 100% of Dalian Parkson and 100% of Shenyang Parkson from its parent group for 420M yuan.

Baoshan Iron & Steel (600019) announced plans to repurchase up to 5B yuan worth of shares at prices not exceeding 5.00 yuan per share.

Google Trend HK - popular searches: China Life Insurance-H (2628), Ping An Insurance (2318), ZTE Corp (763)

China Life Insurance-H (2628), China Communications Construction (1800), Guangshen Railway (601333) , China Life Insurance (601628): 1H results expected.

China Baoan Group (000009), Weifu High-Technology Group Co (000581), FAW CAR (000800), Bank of Ningbo (002142), Rongsheng Petro Chemical Co (002493), Shanxi Lu'an Environmental Energy Development (601699), Jiangxi Hongdu Aviation Industry Corp (600316), Shanghai Zhenhua Heavy Industry (600320), China Avic Avionics Equipment Co (600372), Zhongjin Gold (600489), Xiamen Tungsten (600549), Kingfa Sci & Tech (600143), China Sinoma International Engineering Co (600970), Daqin Railway (601006), Bank of Beijing (601169), Inner Mongolia Junzheng Energy & Chemical Industry Co (601216), expectedChina Shipbuilding Industry (601989): 2Q results expected.