Daily Morning Watch - 26 September 2012

SINGAPORE

SingTel (ST): Singapore state investor Temasek Holdings is selling up to 500M shares in the Co at S$3.20-3.25 per share, a move that will lower its holding to 51.3% from 54.4%, reported Reuters citing a term sheet.

Fraser & Neave Ltd (FNN) announced the appointment of Goldman Sachs and JPMorgan as its advisers on the take-over offer made by Thai tycoon Charoen Sirivadhanabhakdi's TCC Assets Ltd.

Genting Singapore (GENS) said it has sold its entire 4.8% stake in Australian casino operator Echo Entertainment Group for A$158M.

DBS Bank Ltd (DBS), Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank Ltd (UOB): Fitch Ratings says in its latest report that these three banks are likely to be opportunistic in diversifying their borrowing sources as they continue to rely on deposits for their core funding. The rating firm added: "Low interest rates and investors' preference for highly-rated financial institutions have presented an opportunity for Singapore banks to procure cheap funds from debt capital markets. Raising funds from the capital market in moderation not only aids the banks' funding diversity and flexibility, but also improves their assets/liabilities maturity profile."

US indices fell on Tuesday pressured by technology hardware & equipment and automobiles & components sectors. On the US economic data front, the Conference Board's consumer confidence index rose to 70.3 in September (63.1 expected and 61.3 for the period of August). Also, Richmond Fed Manufacturing index rose to 4 in September (-5 expected) from -9 the previous month. Finally, house price index rose 0.2% MoM (0.6% expected) in July. Regarding US stocks, Caterpillar (CAT -4.25% to $87.01) revised its 2015 EPS guidance to a range of $12-$18 from $15-$20 previously. In other news, Vertex Pharmaceuticals (VRTX -4.19% to $56.26) was under pressure after study results of the adenosine nucleotide analogue pro-drug ALS-2158. Separately, Red Hat (RHT -4.28% to $55.08) reported a 2Q adjusted EPS of $0.28 vs $0.29 expected ($0.29 a year ago) on revenue of $322.6M up 15% YoY.

In Europe, in Germany , the consumer confidence index remained at 5.9 points in October, the same level as the reading in September. In France , the business confidence remained unchanged in September at 90, slightly higher than expected. Regarding stocks, Lonza Group jumped amid reports of takeover speculation. Weir Group rebounded sharply as analysts said General Electric may be interested in buying the mining-equipment maker. This morning, the Nikkei225 index opened extremely lower.

CHINA - HK

The People's Bank of China said in a statement after its 3Q monetary policy meeting: "The current economic and financial performance shows signs of stabilising and the price situation is basically stable."

Hong Kong 's total exports rose 0.6% YoY to HK$311.7B in August (-4.8% expected) vs -3.5% in July according to the government. Imports increased 0.9% to HK$347.7B (-3.5% expected) vs -1.8% in July, resulting in a trade deficit of HK$36.0B in August (HK$38.8B deficit expected) vs a deficit of HK$40.1B in July.

Nine Dragons Paper (2689) posted FY net income down 27.8% YoY to 1.4B yuan on sales of 27.2B yuan, up 11.4%. The Co said: "A combined assessment of the trend of raw material prices and the current industry conditions makes the Group believe that the industry has now reached the bottom of the market, and is forecast to rebound gradually when entering into 2013. With its efforts in actively expanding production capacity in the past few years, the Group will be able to outperform industry peers in various aspects."

CLP Holdings (2) may delay its 40% tariff rise originally planned for the next 3 years reported Ming Pao Daily News citing a senior company executive.

Standard Chartered (2888) will spend HK$1B setting up its private and consumer banking flagship shop in Hong Kong , reported Oriental Daily News citing the Bank's local chief.

GOME Electrical Appliances (493) announced it has redeemed 2.4B yuan (almost all) of new convertible bonds due 2014.

New World Development (17), Esprit Holdings (330): FY results expected.

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Daily Morning Watch - 24 September 2012

SINGAPORE

Singapore Exchange (SGX) announced the appointment of Timothy Utama as its Chief Operations and Technology Officer, effective 1 December 2012.

US markets were mixed on Friday. On the US economic data front, no major data were released today. Stocks in the telecommunication services & health care equipment & services sectors traded higher while shares in the transportation and automobiles & components sectors were under pressure. Looking at some US news, Oracle (ORCL +0.65% to $32.47) posted 1Q adjusted EPS up 11% YoY to $0.53 (inline) on non GAAP revenue down 2% YoY to $8.21B ($8.4B expected). Texas Instrument (TXN +0.49% to $28.99) boosted its quarterly dividend to $0.21 a share from $0.17. Research In Motion (RIMM -6.52% to $6.46) was under pressure as it BlackBerry services suffered some disruptions end of last week just at the same time as Apple (AAPL +0.2% to $700.1) started selling its iPhone 5.

In Europe , French wages gained 0.5% in 2Q in final estimation, as in prior one. In UK , Public Sector Net Borrowing (PSNB) ex Interventions was an excess of £14.4B in August vs +0.1B in July. Regarding the stocks, Elan Corp gained ground after naming Hans Peter Hasler, currently chairman of HBM BioVentures, as COO of the Co. This morning, the Nikkei225 index opened slightly lower.

CHINA - HK

The World Trade Organization has cut its 2012 global trade growth forecast to 2.5% from 3.7%, citing the eurozone debt crisis and the slowdown in the US and China.

Home prices in China are not expected to show a broad-based rebound in the near future as supply will not significantly fall short of demand, reported the People's Daily citing an unnamed official from the Ministry of Housing and Urban-Rural Development.

Standard Chartered (2888) announced it has finalized the terms of its $340M settlement with the New York State Department of Financial Services over allegations of violating US trade sanctions by handling transactions for Iranian customers. The Bank added: "The Group continues to engage with the other US agencies on their review of the Group's historical US sanctions compliance. The Group cannot predict when this review and these discussions will be completed or what the outcome will be and therefore potential liabilities cannot be reasonably quantified at this point."

CNOOC Ltd (883): Chinese Commerce Minister Chen Deming is expected to mention the Co's bid for Canadian oil producer Nexen Inc during his visit to the country this week, according to Canada China Business Council president Peter Harder cited by Reuters.

Glencore International Plc (805) and miner Xstrata Plc announced an extension, to October 1, to the deadline by which Xstrata's independent non-executive directors are to announce their response to Glencore's revised merger proposal.

China Coal Energy (1898) said its parent group has completed a year-long scheme to buy 24.2M A-shares and 120M H-shares in the Co raising its stake to 57.52%.

ZTE Corp (763) announced plans to sell its 68% stake in Shenzhen ZTE Special Equipment Co Ltd to 10 investors for 528M yuan, saying the deal would generate an investment income of 360M-440M yuan.

Metallurgical Corp of China (1618) said some of its directors and senior managers increased their holdings in the Co's A-shares and H-shares in September 20-21.

First Tractor (38) proposed issuing 1.5B yuan of corporate bonds.

Google Trend HK - popular searches: China Coal Energy Co (1898), Jiangxi Copper (358), SPDR Gold Shares (2840), Zhaojin Mining Industry Co (1818) ZTE Corp (763)'s board approved the disposal of 68% equity interests in Shenzhen ZTE Special Equipment Company Ltd to several investors for 360M-440M yuan.

Belle International (1880): ex-div HK$0.08

Daily Market Watch - 21 September 2012

SINGAPORE

Genting Singapore (GENS) price target was raised to S$1.45 from S$1.17 at DBS Vickers.

Overseas Union Enterprise (OUE) price estimate was upped to S$3.35 from S$2.85 at Credit Suisse.

Tiger Airways (TGR) was downgraded to "hold" from "buy" at OCBC.

US markets were mixed on Thursday. On the US economic data front, initial jobless claims for the week ended September 15th rose to 382K (375K expected), Also, Philly Fed Manufacturing Index increased to -1.9 in September from -7.1 in August (-4.5 expected). Also, leading economic indicators index from the Conference Board fell 0.1 (-0.1% expected) in August. Stocks in the pharm biotech & life sciences and food beverage & tobacco sectors traded higher while shares in the transportation and automobiles & components sectors were under pressure. Looking at some US company news, Adobe Systems (ADBE +4.26% to $34.53) posted a 3Q adj EPS of $0.58 vs $0.59 expected ($0.55 a year ago) on revenue of $1.08B vs $1.10B expected ($1.01B a year ago). Separately, Bed Bath & Beyond (BBBY -9.75% to $62.08) reported a 2Q EPS of $0.98 vs $1.02 expected ($0.93 a year ago) with net sales up 12% YoY to $2.59B. In addition, JC Penney (JCP -11.21% to $25.83) was under pressure after presenting its outlook at an investor presentation. After the US market close, Oracle (ORCL) posted a 1Q ADJ EPS of $0.53 vs $0.53 expected on non GAAP revenue of $8.21B vs $8.42B expected.

In Europe , euro zone PMI composite decreased to 45.9 in September vs 46.3 the month before. PMI manufacturing increased to 46 vs 45.1 in August while PMI services fell to 46 vs 47.2 the month before. In Germany , PMI services advanced to 50.6 in September vs 48.3 in August. UK retail sales were down by 0.2% in August after gaining 0.3% in July. They were anticipated to be down by 0.3%. Regarding the stocks, Daimler gained ground after issuing a profit warning regarding its Mercedes Benz Cars unit. Telenet Group Holding jumped as Liberty Global offers E35 a share for the rest of the Co it doesn't already own. This morning, the Nikkei225 index opened slightly higher.

CHINA - HK

Overdue loans at China 's ten largest listed banks by assets rose by 112.88B yuan from the end of last year to 488.97B yuan  for the first half of 2012, Pricewaterhouse Coopers reported.

Some large cities in China , including Hangzhou , Nanjing , Wuhan and Wenzhou are unveiling large-scale land sales, Economic Information Daily reported, citing local authorities.

Hong Kong August composite CPI rose 3.7% YoY vs +3.9% expected and +1.6% for the previous month.

Macau government is unlikely to grand casino land this year, Jornal Tribuna de Macau reported.

CNOOC Ltd (883): Nexen shareholders approved the Co's takeover offer on Thursday.

Glencore International (805) and Xstrata boards are both holding a meeting today to discuss Glencore's revised takeover offer. Xstrata board may announce its decision Saturday, the Financial Times reported.

Li & Fung (494)'s unit, Direct Sourcing Group, entered into a new agency agreement with Wal-Mart Stores.

Sands China (1928)'s parent Las Vegas Sands Corp to invest $2.5B to build its new resort in Macau .

Great Wall Motor (2333) is in talks to build a plant in Brazil (Valor Economico).

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Hengan International Group Co (1044): ex-div HK$0.75 Ping An Insurance (2318): ex-div HK$0.135

Daily Market Watch - 20 September 2012

SINGAPORE

Genting Singapore (GENS) is selling its entire 4.8% stake in Echo Entertainment Group, the Australian gambling company for appx. A$131.7M (Dow Jones).

Cosco Corp Singapore (COS) price estimate was lowered to S$0.83 from S$0.87 at Daiwa Securities.

US markets closed slightly higher on Wednesday. On the US economic data front, MBA Mortgage Applications for the week ended September 14th dropped 0.2%, Housing starts rose 2.3% MoM in August (+2.8% expected) and Building permits decreased 1% for the period of August (-1.9% expected) according to data released by the US Commerce Department. Finally, existing home sales for the period of August increased 7.8% according to the National Association of Realtors (+2.0% expected). Stocks in the automobiles & components and media sectors traded higher while shares in the energy and commercial professional services sectors were under pressure. Regarding some major US company news, PulteGroup (PHM +4.25% to $16.43), KB Home (KBH +3.62% to $13.16), DR Horton (DHI +4.07% to $22.22), Toll Brothers (TOL +3.47% to $36.41), Lennar (LEN +1.88% to $36.26) gained on the back of good statistics for the housing sector in August. Separately, Autozone (AZO +3.35% to $369.84)'s 4Q EPS was $8.46 vs $8.4 expected and $7.18 a year ago. Net sales increased 4.6% YoY to $2.8B. After the US market close, Adobe Systems (ADBE) posted a 3Q ADJ EPS of $0.58 vs $0.59 expected ($0.55 a year ago) on revenue of $1.08B vs $1.10B expected ($1.01B a year ago). Bed Bath & Beyond (BBBY) reported a 2Q EPS of $0.98 vs $1.02 expected ($0.93 a year ago).

In Europe , euro zone construction output decreased 0.3% in July after falling 0.6% in June. Minutes of the last meeting of the Monetary Policy Committee in UK showed that all members agreed to maintain their bond-purchase target in September and also agreed to hold benchmark interest rate at 0.5%. Regarding the stocks, Inditex gained ground on better than expected results. This morning, the Nikkei225 index opened lower.

CHINA - HK

73.1% of 49 of Chinese dual-listed firms disclosed internal control flaws in their 2011 financial statements, China Securities Journal reported, citing a report from the Ministry of Finance and China Securities Regulatory Commission.

China 's Commerce Ministry could unveil details of its export-stimulus plan this month, Economic Information Daily reported, citing a spokesman at the Ministry.

Hong Kong 's August composite interest rate was 0.39%, slightly down from 0.4% in July.

Hutchison Whampoa (13): EU Commissioner Joaquin Almunia said Hutchison Austria-Orange Austria deal needs "effective remedies" to address competition concerns.

Glencore International (805) agreed to buy a stake in an oil field development owned by Griffiths Energy in Chad for $331M.

ZTE Corp (763) plans to introduce smartphones powered by Windows Phone 8 and by a new mobile operating system it developed with Mozilla.

Genting Hong Kong (678) does not plan to sell its stake in Echo Entertainment Group and will still seek regulatory approval to raise its stake beyond 10%.

Telefield International (1143) has entered into a subscription agreement with Fargo Telecom Holdings Ltd to buy 53% of the enlarged issued share capital of Fargo Telecom at a consideration of HK$15M in cash. "Telefield also agrees to purchase up to 42.3% of the enlarged share capital of Fargo Telecom in subsequent stages, subject to a cap of HK$20M."

Evergrande Real Estate (3333) was downgraded to "neutral" from "outperform" at Credit Suisse.

Yanzhou Coal Mining (1171) was lowered to "underperform" from "neutral" at Macquarie .

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Daily Morning Watch - 19 September 2012

SINGAPORE

Fraser & Neave (FNN): Heineken said ThaiBev (THBEV) and TCC Assets are backing the Co's S$5.6B bid for Fraser's 40% interest in Asia Pacific Breweries (APB) and "has undertaken not to make a general offer for shares in F&N".

OLAM International (OLAM) announced the acquisition of a 100% equity interest in Northern Coffee Corp, Zambia 's largest coffee estate, for appx. $6.15M and the commitment of $40M as capital expenditure in the Co.

Frasers Centrepoint Trust (FCT) price estimate was raised to S$1.82 from S$1.62 and CapitaMall Trust (CT)'s to S$2.06 from S$1.84 at Daiwa Securities.

US markets were mixed on Tuesday. On the US economic data front, NAHB Housing Market Index for September increased to 40 points (38 expected). Also, the US deficit in the current account decreased to $117.4B in the second quarter (-125.0B expected) according to data released by the US Commerce Department. Looking at US stocks, Fedex Corp (FDX -3.06% to $86.55) reported for its 1Q ended August 31 EPS of $1.45 vs $1.41 expected and $1.46 a year ago. Sales rose 3% YoY to $10.79B. Separately, Advanced Micro Devices (AMD -9.73% to $3.62) announced that its CFO Thomas Seifert has resigned, and Devinder Kumar will serve as interim CFO. In other news, Goldman Sachs CFO David A. Viniar will be succeeded by Harvey M. Schwartz, one of three global co-heads from the sales and trading division.

In Europe , EU27 new car registrations dropped 8.9% in August after falling 7.8% in July. In Germany , ZEW survey on economic sentiment advanced to -18.2 in September vs -25.5 in August and -20 expected. ZEW survey for current situation decreased to 12.6 in September vs 18.2 in August and 18 expected. Regarding the stocks, Akzo Nobel slumped as the Co said that CEO Ton Büchner is taking a leave of absence as a result of a medical condition. His recovery is expected to enable him to return to work in the first half of October. Aviva lost ground after the stock was downgraded to "hold" from "buy" at Deutsche Bank. This morning, the Nikkei225 index opened higher.

CHINA - HK

China Securities Regulatory Commission may announce plans to lower and differentiate tax for dividends "soon", Economic Information Daily reported.

Hong Kong 's jobless rate was 3.2% in August vs 3.3% expected and unchanged MoM.

CNOOC (883): U.S. Representative Edward Markey, the ranking member of the U.S. House Natural Resources Committee expressed concerns on the Cnooc/Nexen deal and asked Interior Secretary Ken Salazar to prohibit the transfer of Nexen's drilling leases.

Industrial & Commercial Bank of China (1398): A Standard Bank spokesman said its Co plans to complete the sale of Argentine unit to ICBC within two months.

CSR (1766) plans to sell up to 15B of short-term debt and medium-term bonds.

China Communications Construction (1800) will start selling 12B yuan of bonds. The proceeds of the sale will be used to repay debt for up to 3B yuan, while the remaining amount will be used for general capital purposes.

Longfor Properties (960) raised HK$3.09B through the placement of appx. 260M shares at HK$11.88 each, in the lower range of its HK$11.88-HK$12.38 estimate.

China CNR (601299) to issue 2B yuan of 270-days bonds, at 4.19%.

United Co Rusal (486) said it "has boosted its production of aluminium powders by almost 30%".

Lenovo Group (992) to acquire U.S.-based software company Stoneware Inc. for an undisclosed sum.

Kerry Properties (683) was rated "hold" while New World Development (17) and Sino Land (83) were rated "buy" at BNP Paribas.

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