Market Wrap by Decoder – 20 Feb 14

• SG: Singapore 4Q GDP rose more than expected, +5.5% YoY Vs +5.2% estimated. Government keeps 2014 GDP growth estimated between 2-4%

• HK/CN (China Galaxy):

1. CIRC increased the threshold for insurance funds investment in stock market from 25% to 30%. Currently actual insurance funds investment in the stock market is about 10.23%, the potential injection may reach 1.5 trillion yuan.

2. CSRC: To actively promote pilot program of administrative reconciliation in securities and futures industry.

3. Board of Sinopec (600028.SH) agreed to introduce civil capital into the fuel products sales process and promote diversified ownership after assurance and evaluation.

4. As the SHIBOR continued to decline during past week, PBOC may conduct repo in the open market today.

5. HSBC China Flash PMI for Feb will be published today. Analysts expect the figure is 49.5%, same as last month.

6. 2.39 billion Yuan fund outflow was observed in the A-share market during previous trading day.

• US stocks closed lower after the minutes from Fed Reserve’s policy meeting revealed little consensus about when ST rates would begin to rise. Housing start in Jan spooked the market with a larger than expected drop (888K Vs 963K est) and headlines from IMF telling investors that the global growth still remains fragile with persistent downside risks drenched the sentiment. Treasuries finished on their lows with 10 yrs yield @ 2.73% with the bulk of the retreat coming after the release of the FOMC minutes. Some interesting points to note are: strong support for continuing to taper the monthly pace of asset purchases and several market participants argued that there should be a “clear presumption” that purchases would be trimmed by $10bn per meeting/policymakers agreed that forward guidance would need to be changed soon since unemployment is closed to 6.5%/few participants suggested that federal funds rate should be raised relatively soon.

• Facebook bought what’s app for $16bn in stocks and cash.

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