Daily Morning Watch - 30 July 2012

SINGAPORE

CapitaMalls Asia (CMA) announced the acquisition of Olinas Mall in Tokyo for 22.8B yen from Tiger Eye Realty Yugen Kaisha, adding: "The mall is attractively priced at about S$964 (HK$5,848) per sq ft of net lettable area. (...) The current net property income yield of the mall is also in excess of 6%, and has the potential to be further enhanced through tenancy remix and pro-active mall management." Separately the Co announced it is developing its first shopping mall in China's Qingdao, adding: "The proposed mall will be the retail component of Vanke City, a mixed development strategically located in the New Urban Center in the centre of Qingdao. (...) CapitaMalls Asia plans to develop a six-storey shopping mall with a total gross floor area, excluding car park, of about 89,700 square metres. (...) the total development cost of the shopping mall is expected to be about 1,457.0M yuan (S$294.9M/ HK$1,788.9M)."

Jardine Matheson (JM) said 1H net income plunged 64% YoY to $785M and underlying profit was down 1% to $714M on revenue of $30.3B, up 10%. The Co said: "Given these challenging circumstances, the first-half results were satisfactory and we expect to maintain our performance over the full year."

Jardine Strategic (JS) reported 1H net income down 66% YoY to $860M and underlying profit up 1% to $769M.

Jardine Cycle & Carriage (JCNC) unveiled 1H net income up 5% YoY to $511M on revenue of $11.2B, up 19%. The Co said: "The second half of 2012 is expected to be more challenging due to a weaker rupiah and the adverse impact on automotive sales in Indonesia arising from the more restrictive financing regulations introduced in June."

Singapore Exchange (SGX) posted FY net income down 1% YoY to S$292M, underlying profit down 3% to S$304M, EBITDA down 2% to S$404M on revenue of S$648M, down 2%. The Co proposed a final dividend of S$0.15 per share bringing the full-year dividend to S$0.27 per share, the same as in a year earlier, adding: "The Board aims to declare a base dividend of 4 cents per share every quarter."

Singapore Airlines (SIA): ex-div S$0.1

US indices jumped on Friday boosted by diversified financials and retailing sectors. On the US economic data front, gross domestic product rose at a 1.5% annual rate (+1.4% expected) in 2Q after an upwardly revised 2% gain in the prior quarter while personal consumption rose 1.5% QoQ (+1.3% expected). Finally, the Thomson Reuters/University of Michigan final index of sentiment declined to 72.3 in July (72.0 expected) from 73.2 the previous month. Regarding US stocks, Amazon.com (AMZN +7.87% to $237.32) posted 2Q EPS of $0.01 vs $0.41 a year earlier and operating income down 46.8% to $107M on sales of $12.8B, up 29.5%. Separately, Facebook (FB -11.7% to $23.71) posted 2Q LPS of $0.08 vs EPS of $0.11 a year earlier (adjusted EPS of $0.12, flat YoY) on revenue of $1.2B, up 32.3%. In other news, Starbucks (SBUX -9.42% to $47.47) announced 3Q EPS up 19.4% YoY to $0.43 ($0.45 expected) on revenue of $3.3B, up 12.7%.

In Europe, In Germany , the CPI accelerated by 0.4 percent month-on-month from a drop of 0.1 percent last month (+1.7% year-on-year). In France , consumer sentiment decelerated to 87 in July from 89 in June. In Spain , unemployment rate increased to 24.63% in the second quarter from 24.44% in the first quarter. The number of unemployed persons rose by 53,500 over the quarter to 5.69 million. In Italy , the business confidence among manufacturers dropped more than expected to 87.1 in July from 88.7 a month ago. Regarding stocks, EADS jumped as first-half profit jumped 89 percent and it lifted its full-year earnings forecast. Barclays rebounded sharply after it said underlying pretax profit jumped 13 percent to £4.23 billion, spurred by a 38 percent improvement in profits from wealth and investment management. This morning, the Nikkei225 index opened higher with a bullish gap.

CHINA - HK

Hong Kong 's mortgage loans drawn down rose 3.6% MoM to HK$20.2B during June vs +11.6% in May according to the Hong Kong Monetary Authority. Mortgage loans approved in June fell 20.4% MoM to HK$21.2B including HK$4.2B (+0.7% MoM) in primary market transactions and HK$14.1B (-28.5%) in secondary market transactions. The mortgage delinquency ratio remained unchanged at 0.01%.

HSBC (5) may make a $200M provision for costs in relation to money laundering issues in the US , reported the Sunday Telegraph. The Bank is expected to release 1H results.

Guangzhou R&F Properties (2777) issued a profit warning saying 1H net income may decrease significantly compared to a year earlier.

China COSCO (1919) posted a profit warning saying 1H net loss may widen over 50% YoY (1H2011 net loss: 2.8B yuan).

Fosun International (656) issued a profit warning saying it expects a substantial YoY decrease in 1H net income.

Glorious Property Holdings (845) said it does not expect an insider-dealing probe by the US SEC against a firm owned by the Co's chairman to affect the Co's business.

Shanghai Electric Group (2727) announced plans to issue 4B yuan of bonds in China .

Golden Eagle Retail Group (3308) made clarification in response to a press article: "The Group's sales and net profit growth in 1H2012 had been slower than management's expectation. (...) the net profit of the Group for the six months ended 30 June 2012 remains about the same as compared with that of last year. It is anticipated that same store sales growth in 1Q and 2Q of 2012 was at high single digit."

Fangda Carbon New Material (600516) posted 1H net income down 33.2% YoY to 258M yuan on turnover of 2.0B yuan, down 3.5%.

Beijing Haohua Energy Resource (601101) reported 1H net income down 7.0% YoY to 674M yuan on turnover of 3.7B yuan, up 16.6%.

Hang Seng Bank (11): 1H results expected.

Everbright Securities (601788), Fuyao Glass Industry Group (600660): 2Q results expected.

China Railway Group (601390): ex-div CNY0.048 China Railway Construction (601186): ex-div CNY0.1