Daily Market Watch - 8 Oct 2012

SINGAPORE

The Monetary Authority of Singapore announced tighter rules on home loans: the tenure for all new residential-property loans will be capped at 35 years; if the borrower has no other home loan, he can borrow only 60% (down from 80%) of the property's value, if the borrower has other existing home loans, he can borrow only 40% (down from 60%).

Oversea-Chinese Banking Corp (OCBC) and Malaysia 's CIMB Group Holdings are said to be bidding for General Electric's remaining 25% stake in Thailand 's Bank of Ayudhya, reported Bloomberg.

Singapore Airlines (SIA)'s long-haul budget unit Scoot, which has just announced an alliance with Tiger Airways (TGR), expects to raise sales through partnering with carriers in Australia , China and Japan , according to the unit's CEO interviewed by Dow Jones.

Noble Group (NOBL) announced the pricing of 300M-ringgit of three-year Islamic bonds (sukuk) at par with a rate of 4.50% a year.

US indices were mixed on Friday. On the US economic data front, the US created 114K new jobs (115K expected) in September according to the Labor Department. The unemployment rate dropped to 7.8% (8.2% expected) from 8.1% in August. Stocks in the retailing and media sectors traded higher while shares in the technology hardware & equipment and telecommunication services sectors were under pressure. Looking at US company news, Constellation Brands (STZ +4.26% to $36.2) reported for its 2Q 2013 diluted EPS of $0.71 down 8% on a comparable basis. Separately, Owens-Illinois (OI +4.39% to $20.21) and Automatic Data Processing (ADP +1.07% to $59.53) were upgraded to "buy" from "neutral" at Goldman Sachs. In other news, Avon Products (AVP +7.21% to $17.39): Andrea Jung will step down as Executive Chairman and Board member, effective December 31, 2012.

In Europe, in Germany , the factory orders fell to a seasonally adjusted -1.3% in August, from 0.3% in the preceding month whose figure was revised down from 0.5%. In Spain , industrial output fell 3.2% in August, after a 5.5% decline in July and a 6.3% drop in June. The Japanese market is closed today for Health Sports Day, while the Australian market opened broadly flat.

CHINA - HK

Bond sales on China 's interbank market fell 4.4% YoY to 4.83T yuan in January-August according to the People's Bank of China.

Hang Seng Bank (11): Fitch Ratings has affirmed the Bank's Long-Term Issuer Default Rating (IDR) at "A+" with "Stable" outlook, saying: "HSB is well positioned to maintain sound liquidity and strong profitability. Its stable margins benefit from the bank's treasury activities and its expansion to mainland China . Lending follows strict underwriting standards, and reserves and collateral are maintained at high levels, notwithstanding that collateral coverage for loans used outside of Hong Kong has more than halved since end-2008. The bank's capitalisation is lower than that of peers, which Fitch considers a weakness relative both to the current rating level and to its concentrated exposures to China and the domestic property market."

ZTE Corp (763) and Huawei Technologies Co should be barred from US contracts and acquisitions as they pose a security threat to the country, according to a draft report by the US House of Representatives' Intelligence Committee cited by Reuters.

Hong Kong & China Gas (3) has budgeted HK$10B for expanding its distribution network and investing in new energy projects across China in 2012-2014 according to the Co's managing director cited by Dow Jones.

Next Media (282) made a clarification concerning sales of its businesses in Taiwan saying: "The Group is still in preliminary discussions with independent third parties in relation to such sale (print media business in Taiwan) and no concrete terms, including the price, have been agreed (...) negotiations are continuing in relation to the entering into of the formal agreement in respect of the possible disposal of the Group's TV business in Taiwan and no formal agreement has been entered into."

Google Trend HK - popular searches: Brilliance China Automotive (1114)