Market Wrap EOD by broker – 31 Oct 12

The FSSTI opened mildy +ve, but traded in -ve territory most of the day. Index however saw some late month end window dressing to close flat for the day. Property and REITs mainly stronger with Commodities and O&M lagging all day. GGR, JM and SMM worst performing with CMA and CD top index leaders. Turnover abit better than usual at US$1.229bn, but disappointing for month end activity.

* COMMODITIES: CPO related names underperforming despite futures +0.6% in KL. IFAR-0.8% 9M NPAT was only 65% of consensus, hence weaker than expected. GGR-1.5%, WIL-0.6%

* BANKS: DBS-0.6% weaker ahead of 3Q earnings tomorrow. CLSA f/cast Q3 NP S$851m vs Street S$810m.

* PROPERTY: Outperforming sector with CAPLunch after entering into strategic co-operation agreements with ABC, BOC, CCB and ICBC to grant. However, CMA+3.35% today

-WINGT+2% gaining all day after 1Q PATMI was 46% of consensus, big beat due to better operating margins.


German Sep Retail Sales a Rare Bright Spot

GER. September’s retail sales increased 1.5% m/m, more than consensus expectations of 0.3%, from 0.3% in August. The historical series was revised, and September’s y/y reading is down 3.1% y/y.  Despite September’s retail sales rebound (on a m/m basis), we expect private consumption to have been a drag on Q3 GDP growth. Recent consumer sentiment surveys have been mixed suggesting that consumers are still hesitant to spend, despite above-inflation wage growth.

Market Commentary – 30 Oct 12

  • US Markets remain closed for trading yesterday but are expected to open their doors tonight as the storm subsides. Up next will be the actual evaluation of financial cost of this Hurricane (estimated to cause 20bn worth in prop damage, 10-30bn in lost business – one of the costliest natural disaster in US History). To cheer things up alittle, we are seeing Euro markets rallying to close near their high on the back of Spain’s bte GDP results (-0.3% Vs cons of -0.4%)/Italy sold €7bn worth of LT bonds with yield that is @ May 2011’s low. BOJ’s 11 trn yen stimulus also help in lifting up the mood. Expecting markets to have a rebound today but any upsides should be cap before US elections/China’s leadership hand over. Happy Halloween!

Market Wrap by broker – 31 Oct 12

The FSSTI saw some supportive trading yesterday led by the Banks and Jardines despite overall mkt action being light. October Month end today may see mkt trade slightly higher again.

* GLP: Increased its stake in GLP Park Suzhou from 50% to 70% for a consideration of RMB392mil or US$61.9m. Separately, GLP has also signed a 49,100sqm lease at GLP Park Suzhou Industrial (Genway) raising occupancy for the asset to 91%. +ve

* CAPL: entered into strategic co-operation agreements with ABC, BOC, CCB and ICBC to grant a credit limit allocation of up to RMB50bn(about S$10bn) to CapitaLand Group’s China businesses.

* IFAR: 3Q NPAT of Rp260bn(+23%yoy) with +ve sales growth from Sugar Operations and the Plantation Division. However, 9M NPAT is only 65% of consensus, hence looks weaker than exp.

* SIE: 2Q NPAT -5.8%yoy to $67.1m due to a $3.5m exchange loss.

* WINGT: 1Q PATMI was 46% of consensus, big beat due to better operating margins. Gross margins however lower 43% likely due to revenue recognition of lower end projects.

* OUE: Sold 200 million of 4.25% unsecured callable notes due 2019, as the final tranche of a $1bn multi-currency medium-term note programme.


Market Commentary – 29 Oct 12

  • HK Prop names will be in focus today, given that the HK Govt announced 2 measures to tighten the prop markets.
  1. Buyer stamp 15% for non locals/companies
  2. Extension of SSD to 3 yrs
  • US markets fell after the opening bell but ended up flattish as the sentiment remains mixed. 3Q GDP #s came in @ 2%, a slight improvement from 1.3% in 2Q. A better than expected consumer sentiments also helped lifted the markets (82.6 – highest lvl in 5 yrs). On the flip side, corporate’s results continue to undermine investor confidence as Apple/Amazon/Samsung/Ericsson reported wte 3Q earnings. A major hurricane, Sandy is tearing down the east cost of US and is expected to continue its path up north. NYSE will continue to trade electronically while the trading floor will be shut on Monday. Expecting today to be a lacklustre day due to a flattish close last week and the extreme weather conditions will keep the investors away from the trading desk.

Market News – 29 Oct 12

* Neptune Orient Lines (NOL SP) : 3Q EBIT of US$79m and adjusted net profit of US$50m in Q3 2012, largely in-line. Co has sold its HQ building for S$380m to property developer Fragrance Group Ltd. NOL trades at 1x P/BK 2013E now.

* Wilmar (WIL SP) : form a 50:50 jv with Clariant as the global platform for production & sales of amines & selected amines derivatives, operational in spring 2013. Wilmar will contribute a new plant in China as well as its oleochemical expertise, including access to renewable raw materials

* CapitaMall Asia (CMA SP) : 3Q NP +70.8% to S$62.4m, beats our est by 11%. CMA now leveraged at 30% net debt to equity with look thru levarge of ~40%. If CMA continues to make investments at this pace, further capital is req’d either thru equity issuance (stock trading at 1.1x NAV) or thru asset divestments & new funds.

* Suntec (SUN SP) : 3Q12 DPU of S2.35c was in line with forecasts but no dividend support was used. Strong office income from MBFC and ORQ offset Suntec Mall’s weakness, implying a 3-5% upside surprise but equity raising is a near term risk

* CapitaCommercial Trust (CCT SP) :  3Q12 DPU of S2.04c was in line with estimates but EPU was lower due to premium paid to redeem CBs. CCT retained income for the first time, keeping SGD7.5m to be used for working capital or distribution to unitholders in 2013.

* Frasers Commercial Trust (FCOT SP) :  sells 3 Jap assets, which could be 5% dilutive to earnings, but this could be mitigated if FCOT uses the proceeds to buy Alexandra Point from sponsor. We reiterate our In-Line rating: as cost of equity falls, the risk of equity raising to part-fund acquisitions from the sponsor rises.

* Ascendas India Trust (AIT SP) : NPI of INR1.6bn was 9% above our forecasts due to new completions.

Ezion to enter into mandatory cash offer for YHM Grp…

EZI SP will resumes trading @ 2.30pm Sing Time. They have bought into this company YHM Grp under the bloomberg ticker CHEN SP. Please refer to the document for more information. Thanks.