Daily Market Watch - 22 Oct 2012

SINGAPORE

Fraser and Neave Ltd (FNN): While Overseas Union Enterprise (OUE) announced it is negotiating a potential takeover bid for the Co with certain parties, Japan 's Kirin Holdings is among those parties involved, reported Reuters citing sources.

CapitaMall Trust (CT) announced 3Q distribution per unit of S$0.0242, flat compared to a year earlier. 3Q gross revenue rose 5.1% YoY to S$167M while net property income gained 4.3% to S$112M.

Tiger Airways (TGR) said it has obtained from the Civil Aviation Safety Authority of Australia a new air operator's certificate free of restrictions.

US indices dropped on Friday pressured by consumer services and technology hardware & equipment sectors. On the US economic data front, existing home sales fell 1.7% MoM (-1.6% expected) to a 4.75 million annual rate in September according to the National Association of Realtors. Take a look at some major US company releases, Microsoft (MSFT -2.9% to $28.64) posted a 1Q EPS of $0.53 vs $0.56 expected ($0.68 a year ago) on revenue of $16.01B vs $16.39B expected, down 7.8% YoY. Separately, Google (GOOG -1.9% to $681.79) reported 3Q adjusted EPS of $6.53 vs $8.33 a year ago on revenue of $14.10B, up 45% YoY. The stock dropped sharply in the regular session as those results were unexpectedly released and disappointed. In other news, Marvell (MRVL -14.31% to $7.57) revised its guidance and sees its 3Q revenue in the range of $765M - $785M compared with its prior outlook of $800M - $850M. AMD (AMD -16.79% to $2.18) posted a 3Q adjusted LPS of $0.21 vs LPS of $0.15 expected (EPS of $0.05 a year ago) on revenue of $1.27B, as expected, down 25% YoY.

In Europe, euro-zone current account was a surplus of E8.8B in August vs a surplus of E8.1B in July. German producer prices were up 0.3% in September, as expected, vs +0.5% the month before. UK budget deficit ex interventions narrowed to £12.8B in September vs £13.5B in August. Regarding the stocks, Carrefour jumped as the Co sold its Colombian unit. Aggreko plunged after having warned on its FY results. This morning, the Nikkei225 index opened lower with around 1% loss.

CHINA - HK

The Hong Kong Monetary Authority sold HK$4.67B in the forex market on Friday during New York trading, trying to weaken the local currency as the US dollar hit HK$7.75, reported Dow Jones.

China ' average land price edged up 0.78% QoQ to 3,093 yuan per sqm in 3Q according to the Ministry of Land and Resources.

Chinese Vice Premier Li Keqiang said the value-added tax trial, which is in place in certain cities and provinces, should be extended to the rest of the country and to more industries (Xinhua).

Beijing city's GDP grew 7.5% YoY in 1-3Q vs +7.2% in 1-2Q reported the government. The financial and information service industries contributed most to the growth in the city's tertiary sector.

Fitch Ratings said in its latest report: "China's 3Q GDP reading is consistent with real GDP growth slowing to the 7%-8% range that Fitch Ratings expects over 2012-2014. (...) the current slowdown is much less abrupt than during the global financial crisis four years ago, and we still think China 's economy will avoid a hard landing. (...) the stimulus could still be sufficient to help raise growth towards 8% by year-end and support a rate of about 8.2% in 2013."

PICC Property and Casualty (2328) reported January-September premium income of 147.1B yuan, up 10.9% YoY.

PetroChina (857)'s parent group China National Petroleum Corp has signed a 3-year oil exploration & drilling cooperation contract with Colombia's state-controlled oil company Ecopetrol, announced the latter.

China Unicom (HK) Ltd (762) reported its aggregate number of 3G service subscribers rose 3.18M MoM to 66.86M in September and that of broadband subscribers increased 0.67M to 62.65M.

SJM Holdings (880) said the Macau government has approved its plan to develop a casino resort in the Cotai area.

China National Building Material (3323) announced it has agreed to raise its capital contribution to Southwest Cement by 2.0B yuan to a total of 7.0B yuan.

Zhaojin Mining Industry (1818) said it has obtained approval from the China Securities Regulatory Commission to issue at most 1.2B yuan of domestic corporate bonds.

Beijing Enterprises Holdings (392)'s subsidiary Beijing Yanjing Brewery (000729) announced 3Q net income of 355M yuan, up 3.0% YoY, on revenue of 4.5B, up 6.4%.

Shanxi Xinghuacun Fen Wine Factory (600809) announced 3Q net income soared 833.4% YoY to 457M yuan (88.7M yuan expected) on turnover of 1.4B yuan, up 114.6%.

Inner Mongolia Baotou Steel Rare-Earth Hi-Tech (600111) posted 3Q net income down 89.6% YoY to 120M yuan (734M yuan expected) on turnover of 2.0B yuan, down 52.2%.

Inner Mongolia Pingzhuang Energy (000780)'s 3Q net income plunged 69.0% YoY to 72M yuan on revenue of 736M yuan, down 31.5%.

Yonghui Superstores Co (601933) posted 3Q net income up 40.2% YoY to 143M yuan on turnover of 6.2B yuan, up 43.4%.

Shenzhen Overseas Chinese Town (000069) reported 3Q net income up 34.1% YoY to 567M yuan on revenue of 3.7B yuan, up 18.7%.

Henan Shuanghui Investment & Development (000895) said 3Q net income surged 111.2% YoY to 949M yuan on turnover of 10.7B yuan, up 15.0%.

Zhengzhou Yutong Bus (600066), Henan Shenhuo Coal & Power (000933), Beijing Orient Landscape Co (002310), Guangxi Wuzhou Zhongheng Group Co (600252), Tongkun Group Co (601233), vPingdingshan Tianan Coal Mining (601666), Jihua Group Corp (601718), Jinduicheng Molybdenum (601958): 3Q results expected.

Shenzhen Development Bank Co (000001): ex-div CNY0.1 Qingdao Hanhe Cable Co (002498): ex-div CNY0.15

Daily Morning Watch - 18 October 2012

SINGAPORE

Keppel Land (KPLD) posted 3Q net income down 28.5% YoY to S$75M on sales of S$166M, up 49.0%. The Co said: "Going forward, the Group will continue to selectively acquire well-located sites in Singapore and overseas for residential, commercial and mixed-use developments. The Group will also monitor the market closely for the appropriate window to launch new projects and phases."

Ascendas REIT (AREIT) announced 2Q distribution per unit up 4.4% YoY to S$0.0353 on amount available for distribution of S$79M, up 12.2%. 2Q net property income grew 13.6% YoY to S$103M and gross revenue was up 17.7% to S$143M.

Keppel Corp (KEP): 3Q results expected.

Singapore Exchange (SGX) is expected to release 1Q net income of around S$75M vs S$87.5M a year earlier.

US indices closed higher on Wednesday helped by diversified financials and banks sectors. On the US economic data front, MBA Mortgage Applications for the week ended October 12th slid 4.2%. Housing starts jumped 15% MoM (+2.7% expected) to a 872K annual rate in September while building permits jumped 11.6% MoM (+1.1% expected) to a 894K annual rate. Looking at some major US company releases, Bank of America (BAC -0.21% to $9.44) reported 3Q net income of $340M or $0.00 per diluted share compared to $6.2B or $0.56 per diluted share in the 3Q of 2011. Separately, US Bancorp (USB +1.76% to $34.2) delivered 3Q net income of $1.47B or $0.74 per share compared to $1.27B or $0.64 per share in the same period a year ago. In other news, Bank of New York Mellon (BK +5.52% to $24.86)'s 3Q net income was $720M or $0.61 per common share compared with $651M or $0.53 per common share in the 3Q. Regarding technology stocks, Intel (INTC -2.51% to $21.79) reported a 3Q EPS of $0.58 vs $0.49 expected ($0.66 a year ago) on revenue of $13.46B vs $13.2B expected ($14.23B a year ago). IBM (IBM -4.91% to $200.63) reported a 3Q ADJ EPS of $3.62 vs $3.61 expected and $3.28 a year ago on revenue of $24.75B vs $25.36B expected ($26.16B a year ago ).

In Europe, Moody's has confirmed its government bond rating on Spain at "Baa3" with "Negative" outlook. Euro zone construction output gained 0.7% in August vs +0.1% the month before (revised from -0.3%). UK jobless claims dropped 4K in September, they were expected to be flat, vs -14.2K in August (revised from -15K). ILO unemployment rate was 7.9% during the June-August period vs 8.1% during the May-July period. Regarding the stocks, Diageo and Danone lost ground as quarterly sales figures disappointed. ASML slumped as 4Q sales outlook was below expectations. This morning, the Nikkei225 index opened higher, and has just broken above its 20-day moving average.

CHINA - HK

Chinese Premier Wen Jiabao said the country's economy was in relatively good shape in 3Q and he is confident that 2012 economic and social development targets can be achieved (Xinhua).

Shanghai 's Pudong New District will launch 200B yuan worth of projects concerning advance-equipment manufacturing and strategic new industries in the coming 3 years, reported the China National Radio.

China Life Insurance (2628) issued a profit warning saying 9-month net income would drop appx. 55% YoY from last year's 16.7B yuan, citing "the decline in investment yield and the increase in impairment losses". Separately the Co reported January-September premium income of 263.1B yuan vs 264.2B yuan in the previous year.

New China Life Insurance (1336) posted 9-month premium income of 77.8B yuan (2011 full-year premium income: 97.8B yuan).

Sino Land Co (83) and K Wah International Holdings (173): MTR Corp (66) announced that a consortium formed by the two companies has successfully bid for a residential land parcel, with permissible gross floor area of 520K sq ft, at the West Rail Line's Long Ping Station.

Next Media Ltd (282) announced it has entered into MoUs on selling its print and TV businesses in Taiwan to Jeffery Koo for NT$17.5B.

Shanxi Lanhua Sci-Tech Venture (600123) posted 3Q net income down 5.8% YoY to 408M yuan (534.5M yuan expected) on turnover of 1.9B yuan, down 9.6%.

China Merchants Property Development (000024) said 3Q net income surged 94.5% YoY to 1.2B yuan on revenue of 6.1B yuan, up 38.5%.

Yunnan Copper Industry Co (000878) reported 3Q net loss of 308M yuan vs a net income of 232M yuan a year earlier on turnover of 11.5B yuan, up 24.8%.

Taiyuan Coal Gasification (000968) unveiled 3Q net loss of 179M yuan vs a net income of 60M yuan in the previous year on revenue of 745M yuan, down 27.6%.

Zhejiang China Commodities City Group (600415) posted 3Q net income up 9.4% YoY to 207M yuan on turnover of 1.0B yuan, up 16.0%.

Western Mining (601168), Luzhou Laojiao (000568), Jiangsu Zhongnan Construction Group (000961): 3Q results expected.

Weichai Power (000338): ex-div CNY0.1

Daily Morning Watch - 17 October 2012

SINGAPORE

Singapore 's non-oil exports fell 3.4% YoY (+2.3% expected) vs -10.7% (revised) in August reported the International Enterprise Singapore . Electronics exports dropped 16.4% YoY vs -11.0% in August.

CapitaLand Ltd (CAPL)'s serviced-apartment unit Ascott may launch a yuan-denominated real-estate investment trust to fund its expansion in China according to the unit's chief interviewed by Dow Jones.

Keppel Land (KPLD) said it has acquired a 28.7-hectare prime residential site in Chengdu city of China 's Sichuan province for 680.4M yuan (appx. S$133.0M) to develop appx. 573 landed homes. Separately the Co announced has submitted a S$435M bid for a prime residential site along New Upper Changi Road in Singapore, saying: "Keppel Land plans to develop about 700 homes ranging from 500 sf to 1,400 sf in one- to four-bedroom configurations."

Olam International Ltd () announced the pricing of S$400M 10-year fixed-rate notes at 6.0% coupon.

US indices jumped on Tuesday boosted by materials and semiconductors & semiconductor equipment sectors. On the US economic data front, Consumer Price Index rose 0.6% MoM (+0.5% expected) and 2.0% YoY (+1.9% expected) in September while industrial production increased 0.4% MoM (+0.2% expected). Finally, NAHB housing market index improved to 41 in October as expected from 40 the previous month. Looking at some US company releases, Mattel (MAT +5.04% to $37.2) reported for its 3Q an EPS of $1.04 ($0.99 expected) compared to $0.86 a year ago with net sales up 4% YoY to $2.1B. Separately, United Health (UNH -1.06% to $56.88) posted for its 3Q an EPS of $1.50 ($1.46 expected0, up 28% YoY with revenue up 8% YoY to $27.3B. After the US market close, IBM (IBM) reported a 3Q ADJ EPS of $3.62 vs $3.61 expected on revenue of $24.75B vs $25.36B ($26.16B a year ago ). In other news, Intel (INTC) reported a 3Q EPS of $0.58 vs $0.49 expected ($0.66 a year ago) on revenue of $13.46B vs $13.20B expected ($14.23B a year ago). Separately, CSX (CSX) posted a 3Q EPS of $0.44 vs $0.43 expected ($0.43 a year ago) on revenue of $2.89B vs $2.93 expected ($2.96B a year ago).

In Europe , euro zone CPI gained 0.7% in September, as expected, vs +0.4% in August. In Germany , ZEW survey on economic sentiment advanced to -11.5 in October vs -18.2 in September and -14.9 anticipated. ZEW survey for current situation decreased to 10 in October vs 12.6 the month before and 11.8 expected. UK CPI gained 0.4% in September, as expected, vs +0.5% in August. Regarding the stocks, Rio Tinto gained as 3Q production figures beat expectations. GKN lost ground as the Co predicts softer demand in Europe . This morning, the Nikkei225 index opened extremely higher, and is now close to its 20-day moving average.

CHINA - HK

China raised its holdings of US Treasurys by $4.3B in August (+$2.3B in July) to $1.154T remaining as the top holder in the world followed by Japan ($1.116T), according to the US Treasury Department.

Sun Hung Kai Properties Ltd (16): Fitch Ratings has affirmed its Long-Term Issuer Default Rating (IDR) on the Co at "A" with "Stable" outlook. The rating firm pointed out: "SHKP's ratings reflect its solid franchise in Hong Kong 's property sector as developer and investor and its prudent financial strategy. (...) The Stable Outlook reflects Fitch's expectation that SHKP will maintain a stable business mix and a strong financial profile over the next 18 to 24 months."

Wharf Holdings (4): Fitch Ratings has affirmed its Long-Term Issuer Default Rating (IDR) on the Co at "A-" with "Stable" outlook. The rating firm said: "The affirmation is supported by Wharf's strong recurring cash flows from its prime retail-focused investment property portfolio in Hong Kong . Its Harbour City and Times Square properties, which represent around three quarters of its $209B investment property portfolio value, commanded a 9% share of Hong Kong's overall retail sales in 2011 (2010: 8.5%). Its rental portfolio continued to experience positive rental reversion for leases renewed this year, reflecting a strong retail lease market in Hong Kong . Fitch expects this trend to continue in 2013, albeit at a slower rate."

Hysan Development (14): Fitch Ratings has affirmed its Long-Term Issuer Default Rating (IDR) on the Co at "BBB+" with "Stable" outlook.

Cathay Pacific (293) announced it and Dragonair carried 2.25M passengers in August, down 0.4% YoY, adding: "The passenger load factor fell by 1.5 percentage points to 78.2%, (...) The cargo and mail load factor was down by 2.0 percentage points to 62.8%. (...) Demand in the premium cabins usually picks up after the summer holiday season but this year the pick-up has been slow, especially on regional routes."

Air China (753) posted September passenger load factor down 1.0 percentage point YoY to 81.8% and cargo load factor up 4.0 points to 61.6%. Separately the Co is said to raise 5B yuan by selling 10-year bonds reported Dow Jones.

Huadian Power International Corp (1071) reported 9-month power generation up 4.3% YoY to 116.5M MWh and on-grid electricity sold up 4.4% to 109M MWh.

Dongfang Electric Corp (1072) issued a clarification saying it has not borrowed from any private sources.

Dongyue Group (189) released a profit warning saying FY net income would drop substantially compared to a year earlier.

Chenzhou Mining Group (002155) posted 3Q net income down 22.4% YoY to 160M yuan on revenue of 1.4B yuan, up 29.4%.

Zhengzhou Coal Mining Machinery Group Co (601717) reported 3Q net income up 19.5% YoY to 393M yuan on turnover of 2.6B yuan, up 10.4%.

Shanxi Lanhua Sci-Tech Venture (600123) is expected to release 3Q net income of 534.5M yuan vs 433M yuan a year ago.

China Merchants Property Development (000024), Yunnan Copper Industry Co (000878), Taiyuan Coal Gasification (000968), Zhejiang China Commodities City Group (600415): 3Q results expected.

GCL-Poly Energy Holdings (3800) was downgraded to "underperform" from "buy" at BofA-ML.

Daily Market Watch - 16 October 2012

SINGAPORE

Singapore Airlines (SIA) said it carried 1.50M passengers in September, up 6.1% YoY. September passenger load factor gained 1.0 percentage point YoY to 80.6%, while cargo load factor rose 0.4 percentage point to 64.1%. The Co's overall load factor for September was up 0.9 percentage point to 69.8%.

Fraser & Neave Ltd (FNN) price target was raised to S$10.48 from S$10.19 at Nomura.

US indices closed higher on Monday helped by diversified financials and pharm biotech & life sciences sectors. On the US economic data front, the Empire Manufacturing index for October rose to -6.16 (-4.00 expected and -10.41 in September). Also, advance retail sales for September rose 1.1% (+0.8% expected) and the US business inventories rose 0.6% (+0.5% expected) in August. Looking at some major US company news, Citigroup (C US +5.5% to $36.66) said that for its 3Q, excluding CVA/DVA, the loss on Morgan Stanley Smith Barney and the tax benefit, earnings were $1.06 per diluted share, up 26% YoY. Separately, Charles Schwab (SCHW +0.62% to $13.03): 3Q EPS was $0.19 vs $0.17 expected and $0.18 a year ago on revenues up 1% YoY to $1.19B. In other news, Abbott (ABT +4% to $72.05) reported positive phase 2b results from its "Aviator" study of its interferon-free, investigational regimen for the treatment of hepatitis C (HCV).

From a chartist view, the share price remains capped by a bearish trend line since early May 2012, and seems likely to accelerate on the downside in the coming days. As the stock has just broken below its support at 0.96, and the RSI is negatively oriented below 50%. This morning, the Nikkei225 index opened higher with a bullish gap.

CHINA - HK

Sinopec (386) and ENN Energy (2688) jointly announced they have dropped their takeover offer for China Gas Holdings (384).

China Shenhua Energy (1088) posted September commercial coal production up 7.0% YoY to 24.3M tons, coal sales up 12.6% to 36.7M tons and power output dispatch down 5.4% to 14.43B kWh. For January-September, commercial coal production rose 10.0% YoY to 230.9M tons, coal sales climbed 15.1% to 329.9M tons and power output dispatch increased 9.9% to 144.80B kWh.

China Coal Energy (1898) reported September commercial coal production up 17.4% YoY to 9.3M tons, coke production down 47.4% to 100K tons and coal sales up 7.5% to 13.4M tons. January-September commercial coal production grew 6.7% YoY to 82.4M tons, coke production fell 20.5% to 1.3M tons and coal sales increased 4.7% to 106.1M tons.

Huaneng Power International (902) said 9-month total power generation within China declined 5.4% YoY to 223.7B kWh and electricity sales fell 5.3% to 210.9B kWh.

Ping An Insurance (2318) reported January-September gross premium income of 179.7B yuan, up 12.5% YoY.

China Pacific Insurance (2601) posted gross premium income up 4.6% YoY to 126.8B yuan in the January-September period.

Tingyi Cayman Islands Holding (322) is placing 38.3M shares at HK$23.75-24.00 per share to raise up to HK$918M, reported the Hong Kong Economic Journal citing a term sheet.

Kingboard Laminates Holdings  (1888) announced the purchase of a commercial building in London for £53M.

Haitong Securities (6837) posted September net income of 53.8M yuan vs 169M yuan in August on operating income of 454M yuan, down 6.4% MoM.

Chenzhou Mining Group (002155), Zhengzhou Coal Mining Machinery Group Co (601717): 3Q results expected.

Google Trend HK - popular searches: CLP Holdings (2)

Shandong Weigao Group Medical Polymer Co (1066): ex-div HK$0.0297