Morning Wrap by Decoder – 10 Feb 14

• HK/CN (China Galaxy):

1. PBOC issued China Monetary Policy Report for Q4 2013. The regulator tends to keep stable monetary policy and proper liquidity in 2014 as it believes the fast growth in money supply has been controlled.
2. CSRC got 25 new applications for M&A from 15 listed companies in January and processed 21 M&A cases.
3. Chairman Xi Jinping: China will need deeper reform and openness to realize greater development.
4. China State Council: To build unified pension system for rural and urban residents.
5. Report says 180 billion was poured into the IPO subscription. The institutions behind the IPO underwriting are reported to cash 8.37 billion yuan their holdings.
6. 12.27 billion Yuan fund inflow was observed in the A-share market during previous trading day.

• SG: SGX may add trading restrictions after penny stock crash –

*May introduce a min price for mainboard shares and impose rules on collateral for some trades after a slump in the stocks of three companies
*May also set up independent listing committee
*Plans to shorten trade settlement period to 2 days from 3 by 2016

• KR/TW: May react +vely to an announcement from MSCI on Friday night that it may look to reclassify them as develop markets in 2014 and the announcement will be due in June.

• US stocks rallied last Friday despite Jan NFP missing estimates (113K Vs 180K) as the unemployment rate hits 6.6% (Vs 6.7% and lowest since 2008). The key unemployment rate is currently just 0.1% shy of the Fed’s target of 6.5% and investors cheered as more Americans are able to enter the workforce. T/O dipped 10% below 2 weeks average while the fear indicator VIX fell another 11% (-25% in 2 days). US Treasury Sec – Jack Lew urged the congress to increase the debt ceiling as he is not confident that the extraordinary measures will last beyond the deadline of Feb 27th. Sector wise, healthcare/tech/material/industrial outperformed while the defensive telco/utilities lagged the broader market. Moody’s downgraded Puerto Rico GO (general obligation) rating to junk with –ve outlook. Turkey’s outlook was also cut to -ve by S&P. Crude rallied 2.1% to hit intraday high for the first time since Dec.

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