Market Morning Wrap by Broker – 27 Dec 12

Singapore made fresh YTD highs y’day with strength seen across the board altho overnight sentiment remains fragile given the Fiscal Cliff overhang. Expecting another range-bound session today with resistance up at 3,200

* ETF/ADR prem/disc: EWS -0.2% DBS -0.3% UOB -0.3% JM +0.6% JS -0.3% ST +0.3%

* SGX: Local press suggesting 20-30 IPOs in 2013 from Vietnam, India, Indonesia   China & Singapore in Real Estate, Energy/Resources & Healthcare

* SCGD: Singapore’s Independent Financial Advisory Practitioners (IFA) says CEO   offer is fair & reasonable & that investors should accept S$1.80/shr offer

* M1: Names Patrick Michael Scodeller as COO & Lee Kok Chew as CCO

Merry Christmas and a Happy New Year!!

Wishing all an enjoyable Christmas filled with fun and laughter with the company of lots and lots of good food!

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Fincantieri offering S$1.22 a share for STX OSV, 13 percent lower than the close yesterday.

On Bloomberg:

• Fincantieri made 455m euros offer for STX Europe’s 50.75% stake in STX OSV • Fincantieri to make cash offer for remaining stake, with total transaction valued at about 900m euros

• Transaction to close within the first four months of 2013: statement to the Singapore exchange

• Bid to be funded internally and syndicated loan and Cassa Depositi e Prestiti

Price movement – Share price is halted at the moment but I will expect it to nose dive after opening since Fincantieri has no plans to keep STX OSV listed on SGX. However, given the deep discount (~13%) to the last closing price, investors are likely to reject the mandatory offer and keep the share listed on SGX.

Market Commentary by Decoder – 21 Dec 12 (Happy End of The WORLD!)

  • US futures in focus now – Dived in a straight line after the republican leaders canceled a planned vote on Plan B tonight.
  • FTSE China rebalance @ close today.
  • Overnight markets welcome fresh +ve macro data (GDP up 3.1% QoQ Vs 2.8% est, existing home sales climbed 5.9% in Nov – highest in 3 yrs) and traded higher over the day. Comments from Boehner helped takes a little pressure off the fiscal cliff as he remains hopeful that a deal can be reached on time. (Even the Republicans are delaying to vote on “Plan B” – a sign that they are likely to compromise further) Overall, the financial led gains while the commodity remained under selling pressure. (Gold -1.2%, Silver -4.6%, Copper -1.9%). With Christmas lurking around the corner, I would expect T/O to be subdued with the regional indices trading sideways as many of the funds would have close off their books for year end.

Market Wrap EOD by broker – 20 Dec 12

FSSTI +0.5% +16pts 3,175 on T/O US$1bn (-13% DoD) Singapore closed at intra-day highs having opened at the lows to grind higher thru the day. Banks led the recovery closing on a generous uptick whilst O&M plays trended higher & WIL +3.1% led the Commodity-sensitives. Property, Telcos & Transport & Conglos finished mixed.

* DBS +0.5% Next major resistance S$15.75 (Jan/Apr 2010 & Aug 2011 peaks) With no signs of slowing upside momentum at S$15 expect a further +5% upside to S$15.75 where stock looks vulnerable & would look to take profits/Short

* WIL +3.1% on 4x ADV; Bargain hunting into year-end given huge underperformance in 2012 -35% vs index +20%

* COS unch Wins contract for semi-submersible worth US$200mn from Axis Offshore

* OSIM unch Buys 30% stake in Suzhou Daitec

* SPOST -0.9% Sells 17% stake in EPDS to EPLDT

Local News – 20 Dec 12

* FNN back in spotlight. Co saying OUE’s $9.08 “not compelling but fair”. Street est sum of parts between S$8.58 – S$11.56. Charoen earlier this week was approach fund individually welling to offer $9.60 for another 10% of the co, but no one accepted citing transparency issues. MORE UPSIDE FOR FNN.

* OLAM stocks still being recalled. Ex-date on 28th. For every 1k OLAM shares, can subscribe to 313 bonds, will also given 162 warrants with the bonds.

* OSIM: MACQ DOWNGRADE to Neutral. +52%ytd multiples re-rated from 9x to ~14x. Downgrade on expectations of ~15% earnings growth in nxt 2yrs priced in. Watch for quarterly number to see if co can maintain high margins, Richlife & TWG performance & new acquisition announcements.

* SOY: DOWN another 2% overnight. Fears of slowing demand and more canceled order purchases. Overhand in plantations cont.

* OSIM Intl: Spent $1.09m for 30% equity interest in Suzhou Daitec, exercise machine R&D outfit of Daito.

* Certificate of entitlement (COE): Premiums for small cars <1600cc hitting a record S$81,889 up from S$78,523 2wks ago.

Market Commentary by Decoder – 20 Dec 12

  • German IFO Business Climate came in 102.4 Vs 102 est/IFO Business Expectation came in 97.9 Vs 96.4 est (both #s are BTE).
  • Ms Park was elected the 1st female President in Korea yesterday, leading her opponent Moon, 51.7% to 47.9%.
  • BOJ will make an announcement later – probably they will soften their stance and hint at an enlarged prog of QE.
  • Temasek raised stake in Olam to 18%, up from 17% previously.
  • The major overnight indices broke the 2 days winning streak and ended lower as the fiscal cliff talk turns sour. House Speaker Boehner suggested that “Plan B” (which includes a broader deficit reduction as well as extending Bush era tax cuts for most American making below $1m) would be the last option available to avoid a fiscal cliff. It was also reported President Obama will veto the measures if they reach the white house. This halted the progression as we continue to move closer to the end 2012. VIX saw its biggest move since Oct, +11.5% as the markets get panicky over the unsettled fiscal cliff. Regional markets are likely to take a turn after the recent mini rally as investors are set to lock in their profit before the new year.