Warrants Highlight

STI - 3,000 call or 2,900 put?

While some key Asian indices experienced a heavy retreat (Shanghai Composite Index dropped the most since November with its 2.7% fall; Hang Seng decreased 0.8%) yesterday after Chinese companies posted slumping profits, Singapore’s benchmark STI got off relatively unscathed – dipping only 0.1%. This compares with the 0.5% drop measured on the MSCI Asia Pacific Index.

Finishing above the key 3,000 level for a second consecutive day, the STI yesterday was defended by outperforming index stocks Keppel Corp (+0.64%, $11.03) and UOB (+0.22%, $18.60).

Keppel Corp was boosted by its pre-market announcement yesterday that it signed a letter of intent for a repeat accommodation semi-sub order from Floatel International for US$315m. Macquarie Equities Research has an Outperform rating on Keppel with a 12-month target price of $12.00.

Leveraging on your view via new STI warrants
STI warrants give investors the opportunity to leverage their views on the broader Singapore stock market without the need to stock pick. With index warrants, investors are not exposed to company specific risks.

Investors anticipating further upside on the Singapore stock market can potentially take a leveraged exposure with STI call warrants, while investors who are skeptical or bearish can take a leveraged exposure with STI put warrants.

The two new STI warrants listed this morning expire in June, allowing investors to take a two-month view on the local bourse.

Singapore Market Wrap

Dragged by Chinese Sentiments

Chinese stocks fell the most in four months yesterday, with the Shanghai Composite Index falling 2.7%. Investors fled the market on slower growth concerns. Locally, the Straits Times Index (STI) fell 0.1% yesterday to 3,015.98.

Apr Call STI 2950MBeCW120430 (P1JW) exercise level 2,950.*
Apr Put STI 3000MBePW120430 (P3FW) exercise level 3,000.*

Longer dated Call STI 3100MBeCW130131@ (PA7W) exercise level 3,100.*
Longer dated Put STI 2800MBePW130131@ (PA8W) exercise level 2,800.*

Palm oil players dipped
Both Wilmar (-1.4%, $4.95) and Golden Agri (-1.3%, $0.770) fell yesterday as the Malaysian Crude Palm Oil (CPO) prices broke its 3-day winning streak, falling 0.2% from its 52-week high. The June CPO futures has risen 6.2% this month, compared to Nymex Crude Oil (WTI) which fell 1.5% over the same period.

Call Wilmar MBeCW120702 (PR5W) exercise price $5.00.*

Call GoldenAgMBeCW120702 (PB2W) exercise price $0.75.*

Keppel signs LOI worth US$315mn
Keppel (+0.6%, $11.03) announced yesterday morning that its subsidiary has entered into a Letter of Intent (LOI) to build an accommodation semisubmersible worth US$315mn. The vessel is scheduled for delivery in July 2014.

Call KepCorp MBeCW120801 (P1HW) exercise price $11.50.*
Long Dated Call KepCorp MBeCW130603 (M8PW) exercise price $11.818.*