Daily Morning Watch - 24 July 2012

SINGAPORE

Keppel Corp (KEP) announced its shipyard unit has secured 3 conversion contracts totaling S$103M from PTSC Asia Pacific Pte Ltd, Perenco Group and BC Petroleum Sdn Bhd.

SIA Engineering (SIE): 1Q results expected.

Capitamall Trust (CT): ex-div S$0.0238

Global Logistic Properties (GLP): ex-div S$0.03

2nd Annual International Conference on Innovation and Entrepreneurship (IE 2012)

US indices dropped on Monday pressured by consumer services and media sectors. On the US economic data front, the Chicago Fed National Activity index rose to -0.15 in June from -0.48 the previous month. Looking at some US company news, McDonald's (MCD -2.88% to $88.94) posted for its 2Q a diluted EPS of $1.32 down 2% YoY ($1.38 expected) with global comparable sales up 3.7% YoY to $6.9B. NRG Energy (NRG +8.14% to $19.52) and GenOn Energy (GEN +25.82% to $2.29) announced they have agreed to merge in a stock-for-stock tax-free transaction. In other news, CNOOC has agreed to buy Nexen (NXY +51.82% to $25.9) for $27.5 per share in cash or appx. $15.1B.

In Europe, on the economic side, Bank of Spain said that Spain 2Q GDP fell 0.4% QoQ. Regarding the stocks, Groupe Eurotunnel lost ground as 1H results missed estimates. Royal Philips Electronics advanced after saying profits increased in 2Q. This morning, the Nikkei225 index opened broadly flat, but remains under pressure below both its ST & MT MAs.

CHINA - HK

Hong Kong 's markets will have their morning trading sessions cancelled if Typhoon Signal No.8 or above remains issued at 9:00 am local time, announced Hong Kong Exchanges and Clearing Ltd.

Hong Kong 's CPI rose 3.7% YoY in June (vs +4.0% expected) vs +4.3% in May according to the government.

CNOOC (883) announced it has agreed to acquire Canada 's Nexen Inc, a New York- and Toronto-listed producer of conventional oil & gas, oil sands and shale gas, saying: "The aggregate value of the Consideration of the Proposed Acquisition is appx. $15.1B (appx. HK$117.2B, or $27.50 per Nexen share), and is to be payable in cash. The current indebtedness of Nexen of appx. $4.3B (appx. HK$33.6B) will remain outstanding. (...) The Nexen Board, after consulting with its financial and legal advisors, has unanimously determined that the Arrangement is in the best interest of Nexen and is fair to Nexen shareholders from a financial point of view."

Sinopec (386)'s parent group has agreed to pay $1.5B for a 49% stake in Toronto-listed Talisman Energy's assets in the UK sector of the North Sea, according to Talisman.

China Railway Construction (1186) said its units have recently signed appx. 20B yuan worth of contracts.

Cathay Pacific Airways (293), Singapore Airlines and All Nippon Airways has been allowed by Hong Kong 's Civil Aviation Department to lower passenger fuel oil surcharges by 7-8%.

Google Trend HK - popular searches: China Pacific Insurance Group (2601)