Market Wrap by decoder – 22 May 13

• CN – Xi seeks to enhance Sino-US ties in upcoming visit. Renminbi appreciation/regional territorial disputes and the impact of interest rate cuts are also expected to top the agenda of June 7-8 meeting. Xi’s last friendly visit to US as the vice president will help to lay a good foundation for the upcoming talks.
• HK – The HK Observatory issued black rain storm this morning and said it will keep it till 8am. If signal is cancelled before 9am, market will open @ 11am; if cancelled after 9am, market will reopen @ 1pm.
• TW – FINIs have been net buying TW for 19 straight trading sessions for the whopping US$4.3bn (longest record in 6 yrs). + TSMC/HTC/Mediatek/Catcher/TWN 50, – Honhai/Compal/Mega/Novatek/TPK.

• US Markets recoup Monday losses, closing in the middle of the intraday range with the lack of macro data. Amid all the speculations that the Fed will call for an early termination of QE3, Fed President from St Louis/NY agreed that US should continue with the present quantitative easing program while adjusting the rate of purchases appropriately in view of incoming data on both real economic performance and inflation. GS follows JPM/Citi in raising the target for S&P, sees S&P @ 2100 by 2015 and 1750 by end 2013. Gold continued to slid lower on fear that the Fed will ease stimulus, down 23% from its peak a year ago.


Market Wrap by Decoder – 21 May 13

• CN – Management revamps in Bank of Communication flag cleanup of banking sector. The cleanup of the banking industry is due to the increasing pressure from the government to keep the local government/shadow banking in check. Investors in the banking sector will need to sit tight as more challenges may face lenders in terms of rising bad loans and short term decline of profitability.

• Overnight markets failed to hold onto the midday gains as further talks of paring back QE ahead of Bernanke’s testimony shaken the investors’ confidence. Macro is light with Chicago Fed Nat Activity Index -0.5 Vs cons -0.23. M&A snatched the limelight as $7bn worth of deals were going around the market.

Market Wrap by Broker – 20 May 13

* SOILBUILD Construction Group hopes to raise S$42m in gross proceeds from its
IPO of 168m new shares at 25c each. The mainboard offering, which opened
yesterday and will close at 12 noon on May 22, comprises a public offer of
two million shares and a placement of 166m shares. The general construction
group was previously listed in 2005, but was subsequently taken private in
2010 owing to low trading volumes and an undervalued share price.

* Vard Holdings : SCB lower our TP on VARD Holdings to SGD 1.15 (based on 8.0x
2013E PER) from SGD 1.30 (based on 9.0x 2013E PER), on lacklustre growth in
2013E/14E. VARD’s 1Q13 EPS was below our conservative forecast, and we do not
expect major margin improvement in 2013. Management appears confident that
new orders will stay healthy; the orders YTD represent 32% of our 2013
forecast of NOK 12bn.

* Tiger Air (TGR SP) : 4Q loss S$15.4m (vs S$16.4m loss) after taking into a/c
its share of losses from associate airline co in the Philippines & Indonesia.
Revenue +49.4%yoy to S$241m, driven by a 38% rise in passenger traffic & a
4.5ppt increase in load factor to 84.6%

* MGCCT’s fee model for future Mapletree Reits Its model has been lauded by
market watchers, investors. MGCCT’s base fees are pegged to 10% of
distribution income, and performance fees to 25% of the growth in
distribution per unit (DPU) between financial years.

Morning Wrap by Decoder – 20 May 13

• CN – China visits India, seek to boost ties with other economic powers (bilateral trade between India/China is expected to reach US$100bn in 2015 from 66.5bn in 2012). Schedule includes visiting Pakistan, Switzerland and Germany. This is to fight against the increasing pressure from the US, which is gaining presence in Asia with its allies Japan, Philippines and S.Korea. New home sales also rose last month in 68/70 cities, tracked by the government. Among the cities, GuanZhou/Beijing/Shanghai led the gains on a yearly basis. Seems like it is possible for the government to be more proactive and expand the property tax trial to more cities this year.

• $/¥ hit 103 for the first time since 2008. Nikkei added 1% while Kospi pales in comparison, adding 0.2% in the first hr of trading.
• Plenty of good news in the overnight markets, pushing the indexes to new highs.
1. Uni. of Michigan showed that consumer sentiment hit 83.7 Vs 77.9 cons, which is the highest level in 6 years.
2. EU’s auto markets picked up in April, as car registration picked up for the first time since 2011 Sept.
3. JPM raised S&P target to 1715 (2.8% upside).
4. Citibank projected US unemployment to fall to 7% by end of the year, that’s 0.5% lower than the Fed’s estimate.
• Markets are expected to rise on the back +ve investing sentiment but are unlikely to deliver astonishing gains given the fact that markets (eg S&P) have risen for 6 months without a significant breather in between.

Market Wrap by Broker – 17 May 13

Baltic Dry: 850 -1.28% Gold: 1386.63 -0.01% Palm Crude: 2263 -0.70%
VIX: 13.07 +2.03% WTI Crude: 95.16. +0.91% USD/SGD: 1.2508 +0.13%
*Singapore’s non-oil domestic exports probably fell 1.9% in April YoY (11 est.)

*Singapore Airlines (SIA SP) 4Q net S$68.3m vs est.S$67.7m (3 ests.), swung back in the black mostly boosted by a gain on disposal of aircraft, spares and spare engines. FY net S$378.9m +12.8% YoY, EPS 32.2c +13.7% YoY.

*Intraco Ltd. (INTR SP) forms JV with Tat Hong (TAT SP) to enter crane rental, distribution business in Myanmar; The venture will have an initial paid-up capital of US$3 million. Intraco and Tat Hong will each own a 40% stake, with Mr Aung holding the remaining 20%.

*C&G Environmental Protection (CNGI SP) gets operation and maintenance contract
*Asian Pay Television (APTT SP) raises S$1.39b in Singapore IPO with 1.44b shares sale at S$0.97/shr (projected to offer a yield of 8.51% for 2014). The sale is part of Macquarie International Infrastructure Fund’s (MIIF SP) planned shutdown. Macquarie Group Ltd. and JPMorgan Chase & Co. are joint global coordinators for the offering, and DBS Group Holdings Ltd. and CIMB Group Holdings Bhd *Jardine Matheson Holdings (JM SP) says its businesses faced mixed trading conditions, although underlying earnings were marginally up on last year. It has maintained a robust balance sheet with net debt little changed during the period.

*State Grid Corp buys 19.9% stake in SP Ausnet fro A$842m from Singapore Power; Deal subject to NDRC, ACCC approvals.

Propery Space:
*Keppel Land (KPLD SP) said to be pricing the initial 100 apartments at its Corals at Keppel Bay condo at between $1,800 psf and $3,000 psf which compromise of one, two, three and four-bedroom apartments sized between 600 and 3,600 sqf in addition to eight penthouses (4,800 to 7,800 sqf).The priciest apartment is said to cost around $10.7m for a four-bedder deluxe unit of nearly 3,600 sqf. This works out to around $3,000 psf for the unit, which has a full waterfront view.

*Elitist Development – In Pasir Ris,controlled by the Lim family behind industrial developer Sin Soon Lee has begun sales at the Stratum condo. The average price in the 99-year leasehold project is $900 psf and had released some 170 units, or nearly half of the project’s 380 units.

Change In Shareholders’ Interests:

*United Engg (UEM SP): OCBC raised stake to 20.13% after conversion of 675k warrants *IHH (IHH SP): EPF raised stake to 6.51% with purchase of 3m shares

YTD performance not backed by fundamentals with adjusted yield not so attractive

Key Points:

*Among the top SREIT performers YTD but KREIT’s yield does not stand out on an adjusted basis
*Do not believe KREIT’s 1Q13 results (announced on 15 April) were that remarkable, certainly not enough to justify its YTD price performance
*Raising borrowing cost from 2.17% as at 31 March 2013 to 3.3% (corresponding to the borrowing costs for the S-REITs with the highest credit ratings) would lower its DPU yield considerably.

Morning Wrap by decoder – 17 May 13

• TW – Likely to be able to continue the momentum due to the liquidity driven rally. Index hit a 2 yrs high after FII net bought for 16 straight days. Yesterday’s T/O reached a 5 months high of US$4bn as the big hands/retailers start to get involve after the CGT’s overhang has been removed. However on a cautious note, FII have also reduced their net long contracts as of yesterday so I wouldn’t expect a big movement like what we saw yesterday.

• HK/Korea markets are closed today for holiday.
• Overnight markets were mostly flat till the afternoon session, where sellers came in to push the indices lower after digesting WTE macro data and a statement by a Fed official. Fed member said that the CB could begin scaling back on the monetary easing as soon as this summer, which sparks worries about the sustainability of this rally. Macro data like housing starts/unemployment claims/Philly Fed measure of Factory activity all came in lower than expected which drove equities to their first loss in 5 days.

Morning Wrap by CLSA – 16 May 13

Singapore edged higher for a 2nd consecutive session albeit on light conviction in a tight range-bound session. Overnight sentiment remains intact which should lead to another painful grind higher today however a lack of local catalysts following the conclusion of Q1 earnings will see a close eye on the region for direction.

* ETF/ADR prem/disc: EWS +0.3% DBS +0.6% UOB +0.8% JM +0.2% JS +0.4% ST +0.5%
* PROPERTY: Apri monthly sales -50% MoM feeling impact of Jan cooling measures
Maintain SELL on CIT; Prefer CAPL & CMA on valuations & exposure to China
* REITs: MBFC Tower 3 Q1 occupancy up to 88% from 86%; +VE for KPLD, CCT & SUN
* OLAM: Downgrade to O-PF but raise PT to S$2.01 (+11% upside) Q1 results inline
* ST: Maintain SELL but raise PT to S$3.45 (-14% downside) Prefer ADVANC TB
* EZI: Wins LOI for a 4-yr US$80.3mn contract to support an oil company
* SIA: Apr passenger load 77.8%; Overall load 68.9% +0.6% YoY; Results tonight
* FNN: To be deleted from MSCI Singapore Index on May 31 rebalance