Daily Morning Watch - 25 July 2012

SINGAPORE

SIA Engineering (SIE) posted 1Q net income up 2.9% YoY to S$70M on revenue of S$301M, up 8.2%. The Co said: "Demand for the Group's core businesses in the near term is expected to be stable."

CapitaRetail China Trust (CRCT) unveiled 2Q distribution per unit up 12.1% YoY to S$0.0241. 2Q gross revenue grew 24.3% to S$38M while net property income was up 20.9% to S$25M.

Mapletree Industrial Trust (MINT) reported 1Q distribution per unit up 14.1% YoY to S$0.0226. 1Q gross revenue rose 21.6% to S$67M while net property income grew 26.4% to S$48M.

Singapore Airlines (SIA): 1Q results expected.

CapitaMalls Asia (CMA): 2Q results expected.

Keppel Corp (KEP): ex-div S$0.18

US indices closed lower on Tuesday pressured by automobiles and transportation sectors. On the US economic data front, Richmond Fed Manufacturing Index slumped to -17 (-1 expected) in July from -1 the previous month. FHFA house price index rose 0.8% MoM (+0.4% expected and +0.7% in April). Regarding US stocks, Texas Instruments (TXN -0.93% to $26.57) reported 2Q EPS down 32.1% YoY to $0.38 ($0.34 expected) on revenue of $3.3B, down 3.6%. Separately, VMware Inc (VMW -0.38% to $88.89) said 2Q adjusted EPS rose 23.6% YoY to $0.68 on revenue of $1.1B, up 21.9%. In other news, Baidu Inc (BIDU +7.33% to $114.95) posted 2Q EPS up 68.3% YoY to 7.86 yuan ($1.24) and adjusted EPS of 8.01 yuan ($1.26, vs $1.13 expected) on revenue of 5.5B yuan ($859M), up 59.8% YoY. After the US market close, Apple (AAPL) posted a 3Q EPS of $9.32 vs $10.37 expected ($7.79 a year ago) on revenue of $35.02B vs $37.25B expected, up 22.4% YoY. The company forecast a 4Q EPS about $7.65 for revenue of $34B.

In Europe, euro zone PMI composite was flat at 46.4 in July. PMI manufacturing fell to 44.1 vs 45.1 in June while PMI services increased to 47.6 vs 47.1 the month before. French business confidence indicator was down to 90 in July vs 91 in June. It was expected to be 92. Regarding the stocks, SAP gained ground on strong 1H results while STMicroelectronics dropped as 3Q forecasts trailed analysts estimates. This morning, the Nikkei225 index opened extremely lower.

CHINA - HK

China 's telecom industry recorded an aggregate 1H turnover of 637.6B yuan, up 12.9% YoY, including 376.2B yuan revenue in mobile telecom business, according to Ministry of Industry and Information Technology. The number of 3G mobile phone subscribers in the country grew 47.3M in the 6 months to 175.8M.

Hong Kong trade deficit widened to HK$44.7B in June from HK$35.6B in May and HK$40.3B a year earlier according to the government. In June, the value of total exports of goods fell 4.8% YoY to HK$278.2B while imports dropped 2.9% to HK$322.9B.

Cheung Kong Holdings (1) announced the formation of a JV to acquire the UK 's MGN Gas Networks for £645M.

GOME Electrical Appliances (493) issued a profit warning saying it expects to post a 1H net loss (1H2011: net income of 1.3B yuan) due to falling sales and its loss-making e-commerce business.

Guangzhou Shipyard International (317) posted a profit warning saying 1H net income may fall over 50% from last year's 263M yuan.

Cheung Kong Infrastructure (1038) is placing shares at HK$46.15-47.62 per share to raise up to HK$3.1B reported Hong Kong Economic Journal citing a term sheet.

Great Wall Motor (2333) reported 1H net income up 30.3% YoY to 2.4B yuan on revenue of 18.3B yuan, up 28.8%.

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