Morning Wrap by Decoder – 26 Sept 13

• SG – OUE considering to list their commercial business as a REIT, expected to include OUE bayfront, its 18-storey flagship office building at Collyer Quay, along with the tower building used for a F&B outlet and a link bridge with retail shops. This came shortly after they successfully listed their hospitality trust just few months back (at the btm range though).

• HK/CN – Land price fears trigger property tax rethink. A call from the Ministry of Land and Resources to contain rising land prices may shed some light on BJ’s thoughts on growing risks presented by the rebound in property prices. A record land price at a recent auction aught the leaders’ attention, raising concerns that it could push up home prices and detail BJ’s effort over the last 3 years to cool property prices. The latest high prices may prompt the central government to widen its property tax trial nationwide to help rein in overheating in the sector. This could lead to lingering uncertainties for developers. –

• Overnight markets ended lower for the 5th straight session as the budget negotiation weighs/bloomberg reported increasing inventory in retail giant Walmart. On macros, data has been encouraging as we see an increase in US Aug new home sales MoM (7.9% Vs 6.6% est) as well as US Aug durable goods orders (+0.1% Vs -0.2% est). Sector wise, a rebound in financial/material helped offset the losses in healthcare/utilities/consumers. On bond yield, US treasuries continue to go higher, pushing the yield down to 2.62%.


Morning Wrap by Decoder – 25 Sept 13

• HK/CN – Date set for dawn of new trade era in Shanghai. Shanghai’s pilot free trade zone (FTZ) is expected to be officially launched on Sunday, opening a new era in reforms to turn the city into an international financial centre. In global context, the zone is a proactive response to pan-Asia-Pac and pan-Atlantic trade zones led by the US. At home, the FTZ is a strong signal that China has entered a new era of reform, especially in the financial industry. The zone will cover more than 28 square kilometers and allow goods to be imported, processed and re-exported without the intervention of customs authorities. –

• Markets were volatile as the sessions went through a few rounds of mini roller coaster ride and closed near the day low. T/O was decent, slightly above 2 weeks average. Sector wise, the gains in the industrial/energy help offset losses in telco/financials/healthcare. With the delay in QE tapering, bonds rallied with 10 yrs yield dropping to 2.65% from its peak of 2.9%. On macros, July CS Home Price Index was inline as the housing markets continue to recover but Sep Consumer Confidence eased back a little to 79.7 (Vs 81.5 in Aug, inline with cons).

• Apple shares closed flat yesterday although some analysts are questioning about the breakdown of the 9m units sold in the first week. Analysts from Jefferies/Piper Jaffray were saying that this 9m units might have included 2-3m units of iPhone 5C which have been “sold” to the chain of retailers but are still collecting dust on the shelves of those stores. They also noted that all version of the iPhone 5C remain available on Apple’s website to ship within 24 hrs of order, adding on to their suspicion. Social media giant – FB added another 2+% in overnight trading as China lifted the ban on its website and Citi upgraded the stock to “Buy”.

Market Wrap by Decoder – 24 Sept 13

• HK/CN – Clean-air push fuels price rises for oil firms. Oil companies and motorists in China, (World’s biggest car market) will share the responsibility and costs of cutting emissions blamed for the country’s worsening air pollution. The National Reform and Development Commission announced stricter motor fuel standards on Monday. In the next 2 years, the prices of gasoline and diesel meeting the national IV standards will rise by US$46.8/US$59.8 respectively. Fuel prices will be even higher after 2017 when the tougher standards come in. Analysts say that the upgrade will increase costs for oil refiners by as much as 40% as they need to improve facilities and production methods. New-energy providers and alternative-fuel cars are likely to be the trend for consumers throughout the next decade.

• Major markets opened higher but quickly retreated to hit their lows in the 1st hr of trading before trading within a tight band. Sector wise, utilities and tech outperformed while healthcare/financials/consumers led the decline. Comments from the various Fed members were mixed, providing no clear indication of what will happen in end Oct. Dudley – “pace of recovery insufficient for the Central Bank to ease bond buying”; Lockhart – “monetary policy should focus on creating a more dynamic economy and there isn’t enough data for evidence between now and Oct”; Fisher – “The Fed harmed its credibility with the decision last week”. Bonds rallied with the 10yrs and 30 yrs yield @ 2.7%/3.725% respectively. Apple concept shares today should do well given its 4.9% surge yesterday, after the co claimed that they sold 9m iPhones in the first 3 days and 4Q #s will be at the high end of the previous estimates.

Morning Flows – 20 Sept 13

• HK/KR/TW – Markets are close for Mid Autumn Holiday.

• US markets ended lower after the FOMC’s outcome took investors by surprise which caused Asian markets (esp EMs) to rally hard in the day. Some of the precautionary funds that were withdrawn from the EMs earlier probably flow back, after the selloff in late Aug. As the tapering gets delayed, EMs should see short term upside as funds bottom fish in the beaten markets like India and some of the ASEAN countries. Whatever it is, the US BM indices are still trading near their peak so it is understandable to lock in some profits at this level. On the macro side, we are filled with +ve data overnight. US2Q current account improved to 98.9bn deficit, down from 1Q’s 106.1bn while Philly Fed business outlook came in strong @ 22.3 Vs 10.3 cons. Aug existing home sales surprised on the upside, with 5.48m units being sold as compared to 5.25m expected. Weekly initial jobless claims was lower @ 309K Vs 330K cons. NYSE T/O was slightly lower, -4.5% MTD.

Markets Chiong – No Tapering…for now at least..19 Sept

• CN/KR/TW – Markets are close for Mid Autumn Holiday.

• Markets traded within ultra tight range until Fed’s decision at 2pm – to leave QE as it is now. Markets reacted by surging up 1% in a straight line, with Dow closing at a new record high. T/O saw a 11% increment vs 2 weeks average while VIX retraces 6.5%. Highlight of the night includes Bernanke’s comment: “The committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.” Sector wise, utilities/material/tech (recent laggard)/consumer all outperform while the defensive telco/healthcare lagged the broader move higher. Bonds posted solid gains, pushing 10 yrs yield down to 2.69% and the dollar was sold against all major currencies due to the expectation of a QE taper therefore a stronger dollar. Commodities/financials/homebuilders spiked on the continuation of the softer USD/low rate environment.

Morning Wrap by Broker – 18 Sept 13

Baltic Dry: 1740 +5.39% Gold: 1305.80 -1.02% Palm Crude: 2355 +0.38%
VIX: 14.53 +1.04% WTI Crude: 105.54 +0.11% USD/SGD: 1.2597 +0.13%
*Baltic Dry +5.39%, reaching 33-mth high on rebuilding of inventories in China.

*(GLP) signs long-term lease agreement with DHL supply chain in China & leases 26,000 sqm at GLP Park Beijing Capital Airport, expanding their footprints in Northern China.

*Parkwaylife(PREIT) buys 5 Japanese properties incl. nursing homes & care facilities, for a total of S$59.2m.

*Starhill Global REIT(SGREIT) reports drawn down on 3-yr S$100m & JPY 7b term loan facilities in full, and ~S$322m from 5-yr loan facilities granted to it pursuant to unsecured loan facility agreement.

*Tough days for REITs? If the Fed begins to wind down its monetary stimulus, will likely to mark the official beginning of the end of the global low-yield environment that made Asia’s REITs attractive. -WSJ

*(UOB) sets up new unit for increasing Hong Kong-SE Asian cos trade flows.

*Ramba Energy(RMBA) completes development drilling at Jatirarangon well; their analyses confirms presence of Hydrocarbons.

*GoldenAgri(GGR) may use RSPO-certified products starting from 2015.

Market Wrap by Decoder – 18 Sept 13

• KR – Close for Mid Autumn Festival.

• HK/CN – Subsidy scheme to boost green vehicle market. China has announced the long-awaited subsidy program for new-energy vehicles, part of the 12th Five Year Plan which identifies new energy and alternative fuel vehicles as priorities for government support. According to an official statement, manufacturers of pure electric and fuel cell cars will be eligible for the subsidies of as much as US$9,800 for the purchase of an all electric passenger vehicle and as much as US$81,700 for an electric bus. BYD (1211HK) likely to get a boost as China aims to put 5m electric automobiles on the road by 2020. –

• Dow/S&P saw small gains in the morning before trading flat thereafter while the tech heavy Nasdaq posted new high since 2000. Facebook (+6%) – recent U/G by GS and Twitter’s plans for an IPO might have boosted the social media space. Other names like Intel/Yahoo also posted small gains and a small recovery in Apple also help lifted the index higher. Macro side, US Aug inflation rose 1.5%/0.1% YoY/MoM Vs cons of 1.6%/0.2%. T/O was light ahead of FOMC minutes tonight.