Daily Morning Watch - 10 October 2012

SINGAPORE

Singapore Finance Minister Tharman Shanmugaratnam said property prices in the city-state could press higher with a risk of forming a bubble.

CapitaLand (CAPL) announced Lim Ming, currently the Co's COO, will replace Liew Mun Leong as president & CEO.

Fraser & Neave Ltd (FNN) announced it will not respond to a S$1.4B unsolicited cash offer by a third party for its hospitality and serviced residence business, saying: "The Board views the hospitality and serviced residence business to be an integral part of the property arm of the Co."

United Overseas Bank (UOB) is said to have sold $500M of 10-year dollar-bonds reported Dow Jones.

US indices dropped on Tuesday pressured by semiconductors and health care equipment & services sectors. On the US economic data front, industrial production fell 0.5% MoM (as expected) and 1.2% YoY (-1.1% expected) in August while manufacturing production dropped 1.1% MoM (-0.7% expected) and 1.2% YoY (-1.1% expected). Looking at some major US company news, Edwards Lifesciences (EW -21.24% to $84.6) announced that "based on preliminary financial data", total sales for its quarter ended September 30 will be $448M, up 9% YoY and compared to the previous guidance of $465M - $485M and $477M expected. After the US market close, Alcoa (AA) posted a 3Q LPS of $0.13 (EPS of $0.15 a year ago) on revenue of $5.8B, down 9% YoY. The company cut 2012 global aluminium demand forecast to 6% vs 7%. In other news, Yum! Brands (YUM) reported a 3Q adjusted EPS of $0.99 vs $0.97 expected  ($0.83 a year ago) on revenue of $3.57B vs $3.66B expected, up 9% YoY. The company boosted forecast for year adjusted EPS, it should rise at least 13% vs 12% previously expected.

In Europe, in UK , industrial output decreased by 0.5% in August, following July jump (+2.8%). Year-on year, it was down by 1.2% and by 0.1% between June and August when compared to the previous 3-month period. Manufacturing production fell by 1.1%. Regarding stocks, Vedanta Resources led mining companies higher, limiting losses in Europe . Alcatel-Lucent dropped to the lowest in at least 23 years. This morning, the Nikkei225 index opened extremely lower.

CHINA - HK

S&P said in its latest report: "We expect the global economy to continue to expand modestly, (...) We expect that the US will avoid the fiscal cliff and eke out about 2% growth, (...) China will experience a 'soft landing' in its growth deceleration, and Japan will grow modestly while remaining stuck in deflation. But the risks are stacked to the downside - and they are significant."

Banks in Wenzhou city, Zhejiang province of China , recorded a non-performing loan ratio of 3.0% by end-August (vs 1.36% at end-2011 and 0.37% at end-August 2011), the highest in 10 years, reported the China Securities Journal citing government data.

Sinopec (386) is said to be building Southeast Asia's largest oil storage terminal at Indonesia 's Batam Free Trade Zone, with the project's first phase involving a 16M-barrel oil storage facility, reported Reuters citing industry sources.

ZTE (763): China 's Ministry of Commerce said a report by the US House of Representatives' Intelligence Committee, which described the Co and Huawei Technologies Co as a security threat to the country, was conjectural and groundless.

Li & Fung Ltd (494) has appointed Ed Lam, a former Citigroup investment banker, as CFO.

The Hong Kong sourcing company said it had appointed former Citi banker Ed Lam as its new chief financial officer, effective Nov. 5.

Evergrande Real Estate Group (3333) announced contracted sales rose 13.1% MoM to 8.1B yuan in September and 9-month contracted sales amounted to 58.6B yuan, equivalent to 73.2% of its annual target.

Shimao Property (813) said September sales surged 43% YoY to 5.1B yuan with 9-month sales totaling 35.7B yuan, exceeding its annual target of 30.7B yuan.

Yuexiu Property (123) announced contracted sales climbed 10% YoY to 1.4B yuan in September and surged 134% to 11.0B yuan in January-September, compared to the Co's annual target of at least 10.0B yuan.

China SCE Property Holdings (1966) said sales grew 3% YoY to 310M yuan in September and declined 1% to 3.9B yuan in January-September, equivalent to 97% of its annual target.

Intime Department Store (1833) posted 9-month total sales up 16.6% YoY to 9.1B yuan and same-store sales up 7.5% to 8.4B yuan.

Chongqing Iron & Steel (1053) reported steel output down 25.2% YoY to 30K tons in September and down 12.7% to 3.6M tons in January-September.

China Vanke (000002) reported September sales down 3.7% YoY (+6.1% MoM) to 12.0B yuan and 9-month sales down 0.8% to 96.3B yuan.

Google Trend HK - popular searches: Intime Department Store Group Co (1833)

Xinxing Ductile Iron Pipes (000778): 3Q results expected.