Daily Morning Watch - 8 August 2012

SINGAPORE

Singapore 's foreign reserves climbed to $244.1B in July from $243.4B in June according to the Monetary Authority of Singapore.

Fraser & Neave Ltd (FNN) announced it has received an unsolicited offer from Kindest Place Groups Ltd today to acquire the Co's directly-held 18.75M shares, or 7.3%, in Asia Pacific Breweries Ltd (APB) at S$55.00 per share.

United Overseas Bank (UOB) posted 2Q net income up 12.1% YoY to S$713M, adding: "Net interest income increased 7.4% (to S$981M) due to higher loans volume. Net interest margin was maintained at 1.92%. Non-interest income grew 20.0% (to S$629M) led by strong fee income as well as higher trading and investment income. (...) Total impairment charges were higher due to higher individual impairment on loans in Singapore ." Meanwhile the Bank announced Chairman Wee Cho Yaw will step down and be succeeded by Hsieh Fu Hua from Temasek Holdings as non-executive chairman.

Oversea-Chinese Banking Corp (OCBC) has enlarged its 2004-established Euro Commercial Paper Programme to $10B from $5B.

SembCorp Marine (SMM) said it has secured $4.0B contracts from Sete Brasil Participacoes SA for the design and construction of 5 drillships.

Neptune Orient Lines (NOL) Starhub (STH): 2Q results expected.

US indices closed higher on Tuesday. On the US economic data front, consumer credit rose $6.5B ($10.25B expected) in June according to the Fed. Stocks in the automobiles and consumer durables & apparel sectors traded higher while shares in the real estate and utilities sectors were under pressure. Regarding some major US corporate releases, Office Depot (ODP -5.17% to $1.65) reported 2Q net loss of $64M, or $0.23 a share, vs a net loss of $29M a year earlier. Separately, Chesapeake Energy (CHK +9.44% to $19.37) posted 2Q EPS of $1.29 vs $0.68 a year earlier and adjusted EPS of $0.06 ($0.08 expected) vs $0.76. After the US market close, Walt Disney (DIS) posted a 3Q EPS of $1.01 vs $0.93 expected ($0.77 a year ago) on revenue of $11.09B vs $11.30B expected, up 4% YoY. Priceline.com (PCLN) reported 2Q adjusted EPS of $7.85 vs $7.36 expected ($5.49 a year ago) on revenue of $1.33B vs $1.35B expected, up 20.3% YoY. The company forecast 3Q adjusted EPS of $11.10-$12.10 vs $12.79 expected.

In Europe, Germany factory orders fell 1.7% (-0.8% expected) in June after a 0.7% gain in May (revised from +0.6%). In UK , industrial production plunged 2.5% in June (-3.5% expected) after increasing 1% in May. Still in UK , BRC sales like-for-like YoY gained 0.1% in July (-0.2% expected) after +1.4% in June. Separately, S&P reaffirmed the "CCC/C" foreign and local currency credit ratings on Greece , but revised the outlook to "negative" from "stable". Regarding the stocks, Xstrata and Danske Bank gained ground as quarterly results beat estimates. This morning, the Nikkei225 index opened extremely higher with a bullish gap.

CHINA - HK

Hong Kong 's foreign currency reserve assets climbed to $296.2B at end-July from $295.0B at end-June according to the Hong Kong Monetary Authority.

Hong Kong Aircraft Engineering (44) posted 1H net income up 13.4% YoY to HK$482M on turnover of HK$2.9B, up 14.0%. The Co declared an interim dividend of HK$0.88 per share vs HK$0.70 a year earlier. The Co added: "2H2012 is expected to be challenging. Demand for HAECO's airframe maintenance and line maintenance in Hong Kong is expected to remain firm. Forward bookings for TAECO (Taikoo ( Xiamen ) Aircraft Engineering Co Ltd)'s airframe maintenance services in the second half of the year are weak. HAESL (Hong Kong Aero Engine Services Ltd)'s performance in 2H2012 is expected to be adversely affected by a reduction in demand for engine overhaul services resulting from Cathay Pacific's decision to accelerate the retirement of its Boeing 747-400 aircraft. The joint ventures in Mainland China are expected to continue to be affected by increased wage costs and to be affected by increased competition."

Melco Crown Entertainment (6883) reported 2Q net income up 23.4% YoY to $82M and adjusted EBITDA down 5.8% to $204M on revenue of $939M, down 2.2%. The Co pointed out: "The year-over-year improvement in net income was primarily a result of improvements within the mass market gaming segments, reduced non-operating expenses, including lower net interest costs and one-off costs associated with the refinancing of the City of Dreams Project Facility ."

China Resources Land (1109) said it has signed a HK$3.4B three-year term loan facility with a number of banks.

KWG Property (1813) said July pre-sales grew 6.0% YoY to 1.1B yuan.

Chongqing Iron & Steel (1053) reported steel production up 1.4% YoY to 460K tons in July and down 9.4% to 2.91M tons in January-July.

Shanghai Electric Power (600021) posted 1H net income up 67.1% YoY to 306M yuan on turnover of 7.1B yuan, down 19.9%.

Shanxi Guoyang New Energy (600348) reported 1H net income down 17.0% YoY to 1.3B yuan on revenue of 33.6B yuan, up 33.3%.

NARI Technology Development (600406) unveiled 1H net income up 15.5% YoY to 308M yuan on turnover of 2.1B yuan, up 24.2%.

Western Mining (601168) said 1H net income plunged 79.3% YoY to 134M yuan on revenue of 10.7B yuan, up 7.9%.

Cathay Pacific Airways (293): 1H results expected.

Hong Kong Exchanges & Clearing (388). Luzhou Laojiao (000568). Henan Shenhuo Coal & Power (000933. Tianjin Tasly Pharmaceutical (600535) China Sinoma International Engineering Co (600970): 2Q results expected.

Google Trend HK - popular searches: Esprit Holdings (330), Standard Chartered (2888)

China Resources Sanjiu Medical & Pharmaceutical (000999): ex-div CNY0.24