Market Wrap by Decoder – 28 Nov 13

• TH – PM Yingluck is expected to survive No-confidence vote scheduled today, said Bangkok Post. Leaders from both sides called for the government and protesters to start talking. Situation on the ground will remain tense even if the no-confidence vote pass through and there is no indication when both sides will sit down peacefully to talk.

• HK/CN – HK property firms shy away from Qianhai land sales. 2 commercial plots in the Qianhai special economic zone have been sold for a combined 4.06bil yuan, said Shenzhen Land and Real Estate Exchange Center yesterday on its website. Priority would be given to HK firms in the upcoming rounds of land auctions by Qianhai authorities in Shenzhen, said the authority as they previously sold 3 commercial plots to mainland Chinese firms. However, HK based property giants remain inactive in bidding for the Qianhai sites. The seller may also be disappointed as one of the winners are of the 2 sites is a supply chain management firm instead of a property or financial firm. HK property firms are put off by a 10 yrs lock up period and the prospect of slow returns, some observers said. If there is anything that leads to a suspension or slowdown of the construction of public facilities in the zone, the owners of the sites will suffer financial losses. –

• Markets ended a choppy session on record high once again as investors welcome a series of BTE macro data. The initial jobless claim was down 316K Vs 330K cons/Chicago purchasing manager came in @ 63 Vs 60 cons/Uni. of Michigan confidence @ 75.1 Vs 73.1 est. However, T/O for the session was light ahead of the Thanks Giving Holiday (down 17% Vs 2 weeks average). Gainers were led by Tech/Industrials/Financials/Cons Dis while Utilities and Energy lagged due to WTE DoE inventory data that showed an outstanding 2.95mil barrels Vs 423K estimated. As a result, crude fell 1.5% to its 6 months low. Treasuries didn’t really perform overnight as the 29bn, 7 yrs auction bids disappoint with a coverage ratio of only 2.36x (lowest in 4 yrs).


Market Wrap by Decoder – 27 Nov 13

• KR –

o Korea manufacturer’s confidence for Dec fell to 78 from 83 in Nov.
o The government may ask the BOK to lower interest rate as part of the measures to boost the local economy. This is due to the low inflation rate, @ 1.5% Vs the government’s target of 2.5%. A broker blamed the high property prices/unique housing rental system that sucked up all the excess cash, leaving Koreans having little left to spur the economy.

• HK/CN – Foreign banks play waiting game amid opening moves. China will lower the barrier of entry for foreign financial services providers, said Zhou XiaoChun on Tuesday. He mentioned that he will allow more foreigners to enter the financial services market and ensure a level playing field for them. The move is aimed at fostering market competition to improve the quality of domestic players. A trial program will also be implemented in the SH FTZ, he said. Although Zhou wants to step up efforts to open the financial services sector, most foreign banks and insurers don’t really believe that they will be able to enjoy the same benefits as the local players, at least in the short term, said observers. –

• Stocks climbed steadily throughout the day only to be sold down in the final mins of trading due to the semi annual rebalancing. T/O was just 5% above 2 weeks average amid the rebalancing ahead of the thanks giving holidays in the US. On the macro side, consumer confidence missed estimates (71.2) and fell to just 70.4 in Nov while the new building permits surged 6.2% MoM in Oct (highest lvl in 5 yrs). In addition, US home prices logged a small gain of 0.7% in Sept, smallest monthly gain since Feb. On the commodities side, oil fell for the 3rd day, ahead of projections that a government report tomorrow might show that US crude inventories rose for a 10th week while gold got sold off slightly after previous day’s gain. Some interesting flows might continue this morning after yesterday’s MSCI rebalancing but other than that, T/O are expected to be subdued today.

Morning Wrap by broker – 27 Nov 13

Baltic Dry: 1512 +1.34% Gold: 1242.75 -0.73% Palm Crude: 2622 -0.30%
VIX: 12.81 +0.16% WTI Crude: 93.53 -0.16% USD/SGD: 1.2513 +0.06%
*Wilmar(WIL) buys Vopak Terminals Pasir Gudang [VTPG] for RM45m (US$14m); Main activity of VTPG is the provision of tank facilities for storage, unloading, loading & drumming of bulk liquid chemicals.

*(GLP) leases out 140K sq ft @ GLP Park Suzhou to Geodis Group; Incl. this, Geodis leases total of 495k sq ft with GLP across 3 cities in China & Brazil.

*(DBS) prices 1st Basel 3 issue @ 4.7% @ lower end of the tender range of bet 4.7% to 4.9% & met S$800m target. Perpetuals were offered in exchange via a tender for an outstanding S$1.7b pref shr issue, helping DBS transit to the new Basel III regulatory capital rules, under which the existing pref shs no longer fully qualify as Tier 1 capital of DBS Bank. Separately, Credit Suisse
now among final bidders for SocGen PB, according to Reuters, joining DBS & ABN in the bidding war.

*(CAPL) reported interest in Australand(ALZ.AU) now reduced to 39.1% & sees booking loss of S$149.4m.

*IHH Healthcare(IHH) 3Q13 #s: NP RM117m +61%YoY (below Berg est. of RM163.5m) on REV RM1.67b +12.8%YoY (below Berg est. of RM1.798b); No div declared.

*Vallianz(VALZ) awarded $150m chartering contacts in Mideast, boosting order book 45% to record.

*United Envirotech(UENV) syas Shangzhi Tot project was terminated.

Local News by Broker – 26 Nov 13

{SI} MSCI rebaln effective after close today. Emerging mkts most interesting this qtr, with 32 adds & 24 deletes. INDO only major ASEAN bleeds, ISAT.ij the standout. SPORE MSCI COUNTRY SMALL CAP

INDEX Changes:-

Deletes: RHP


*CITY DEV has been approached by parties for sale of HK unit City e-Solutions (557 HK halted). CIT holds 52.52% of the company.

*ST ENG: US$350m contract win from Crowley to build 2 vessles, delivery 2H17

*COSCO secured deals worth >US$400m to build two semi-sub accommodation vessels for Oslo listed Prosafe SE. +VE

*AIMS AMP AAREIT.sp buys stake in Sydney building, Optus Centre, for A$184.4m (S$211.4m).Deal is the Reit’s first Aust investment.DPU accretive by 5.7% Acqn subject to s/holders & Aust regulatory approval

*YONGNAM clinched record S$168m subcontract. Orderbook swells to S$397m.

*REX Intl REXI.sp starts drilling first well in Oman

*SPORE EXCHANGE forms direct-listing framework with China Securities Regulatory Commission where Chinese cos. planning to list in SG will file applications to island’s exchange and Chinese regulator

*SHORTs: Highest shorts as a % of turnover yday:CIT (78%), ART (57%), SGL (47%)

*CHINA ENV (CENV SP): Responds to SGX queries on financial statements

Morning Wrap by Decoder – 26 Dec 13

• MSCI rebalancing @ close today.

• HK/CN – Financial reforms signal rise of private banks. Private investors will be allowed to increase their stakes in certain rural banks and agricultural cooperatives, Yan Qingmin, vice chairman of the China Banking Regulatory Commission, said Monday. In addition, they are being encouraged to establish privately owned banks. As present, private capital owns about 42% of Chinese shareholding banks and 54% of urban commercial banks compared with 11% and 19% in 2002 respectively. The banking regulator will continue to encourage private capital to take part in financial reform while allowing private banks, he said. The move is in line with reforms announced by the Communist Party central committee at the end of its recent plenum. The banking regulator is likely to announce a deposit protection scheme in the first quarter of next year before launching the concrete regulatory rules for private investors to set up their own banks, observers said. –

• Markets were treading above the unchanged level for most of the session till the final hour’s sell down. Macros were disappointing as pending home sales (MoM/YoY) fell 0.6%/2.2% Vs cons of +1.0%/-1.0% respectively. Dallas Fed Mfg activities also came in lower @ 1.9% Vs 5% estimated. On the flip side, Iran has agreed to curb some of its nuclear activities in return for about $7bil in sanction relief, after days of intense talks in Geneva. The deal was said to last for 6 months till the next agreement. Sweet crude dipped 1.8% on the news before recovering to close just 0.8% lower. As a result, airlines stocks were mostly higher as investors participate in the weakness of crude oil. The Dollar however, continue to buck its uptrend, hitting a 6 months high Vs the Jap Yen while US treasuries posted modest gains.

Morning Wrap by Decoder – 25 Nov 13

• HK/CN – Oil sector must learn lessons from Qingdao blast. At least 52 people were killed and 11 others were missing when a leakage at an oil pipeline triggered an explosion at an underground sewage pipeline in Qingdao in eastern China’s Shandong province last Friday, the official Xinhua news agency reported. More than 130 people were injured, 50 of them seriously hurt, said the report. A total of 114 medical experts were dispatched to Qingdao to attend to the emergency. Both the President and Premier called for a speedy rescue of the victims while the State Council set up an investigation team to look into the case, including the cause of the oil leakage at the Huangwei pipeline, which is owned by Sinopec. Li said government departments and oil pipeline operators must learn from the lessons and must improve on the safety standards. According to the report, 5.52km of sewage pipelines were damaged as a result of the explosion and the oil spill is causing serious pollution. –

• Markets posted steady gains throughout the day to close near the highs yet again, sending Dow/S&P to finish @ record high levels. There were no specific catalysts behind this move but the move might be attributed to the improving macro data/delay of QE3 tapering/a series of stock buybacks. Over in Europe, German IFO better @ 109.3 Vs 107.7 also helped in lifting the sentiment. Overall, gains in healthcare/consumers/industrials/energy helped offset losses in Tech/Telco while the 10 yrs treasuries eked out tiny gains as the yield dipped. Separately, there is a poll on bloomberg that showed that 80% of the investors think that the Fed will delay till 2014 march or later before commencing the tapering of QE.

Morning Wrap by Decoder – 20 Nov 13

• HK/CN – PBoC outlines future for renminbi, investor quotas. China will widen the renminbi’s trading band, continue to increase quotas for its investor programs for qualified institutions and individuals and eventually remove them. Basically, the government will get its nose out of the foreign exchange market, according to Bberg – quoting PBoC governor Zhou XiaoChuan. Shou was elaborating on financial reforms announced by the Communist Party after its recent plenum. The Central Bank will continue to increase the quotas under the qualified domestic institutional investor and qualified foreign institutional investor programs and eventually scrap them. Observers see the move as a signal China wants a faster development of a market-drive exchange rate regime. It’s also good timing as the US is unlikely to taper QE anytime soon. The chance of renminbi depreciation will remain low. –
• Alibaba targets to list in HK as early as 2014, MA said.

• US markets ended the choppy session marginally lower ahead of Bernanke’s speech with OECD cutting the global growth forecast (2013: 3.1% to 2.7%, 2014: 4% to 3.6%). Sector wise, energy and healthcare fare better while utilities/industrial/consumer lagged. € bid after ECB board member Asmussen said that ECB still has tools it can use to bolster the EU’s economic growth before they have to resort to cutting benchmark rates again (€ traded to a 4 yrs high against the ¥). Bernanke said on Tuesday that the short term rates may stay low “well after” the jobless rate falls below the targeted 6.5%. He added that the officials will look at a broader set of indicators of labor market health such as measures of payroll employment/labor force participation/rates of hiring & separation when that happens. He reemphasized that the Fed will likely to keep Fed fund rates very low for “quite some time” even after the end of QE3, providing support for the EURUSD pair.