Does HSI Rebound Have Any Legs?

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SGX Stocks and Warrants

Does HSI Rebound Have Any Legs?

kimeng

Publish date: Wed, 23 May 2012, 09:49 AM

Warrants Highlight

Does HSI Rebound Have Any Legs?

Macquarie is pleased to list the following new HSI July warrants this morning

Code	Name	Type	Expiry	Exercise Price
QG2W	HSI18600MBeCW120730	Call	30-Jul-12	18600
QG3W	HSI19600MBeCW120730	Call	30-Jul-12	19600
QG4W	HSI18200MBePW120730	Put	30-Jul-12	18200
QG5W	HSI19200MBePW120730	Put	30-Jul-12	19200

The HSI has seen sharp sell offs lately. Despite the rebound yesterday, the index is still 9.7% below its April levels, its worst performing month since September last year. US overnight sentiments did not help much either, as the indices were flat after a final hour tumble.

Greece Uncertainty Here to Stay?*
According to Macquarie Equities Research (MER), it was estimated that world equity markets lost US$4 trillion in the last few weeks, primarily the result of renewed uncertainty about Greece. Unfortunately, the uncertainty is not going away anytime soon and the next date to watch is June 17th when Greece will try again to elect a new leader and form a new government. The latest development shows how fragile the Euro block appears and how politics increasingly impacts economies and equity markets. For economic data, the US continues to report decent numbers in areas such as employment and property while Europe continues to be mired in a set of mixed economic conditions.

With the external environment looking increasingly challenging, China is having some issues of its own domestically and the media reported last week that new loans so far in May from the big 4 banks have been minimal and forex deposits are dropping precipitously. The Government's latest RMB36.3bn energy-saving product purchase stimulus program, announced last week, is just another step China has taken to engineer a soft landing, in MER’s view.

With Greece and the Euro block overhang lingering, MER thinks equity markets will continue to struggle in the coming few weeks although a short term rebound is possible from the deeply oversold conditions.

Singapore Market Wrap

And The Rebound Continues

The STI continued to rebound for a second consecutive day after having being sold down sharply the past two weeks. The STI rose 1.2% day-on-day (dod) to close at 2,823.8 yesterday. China's pledge to support the economy continued to give investors hope. The FTSE China A50 index rose 1.7% dod to close at 8,202.9 yesterday.

Call CN8400MBeCW120628 (QC8W) exercise level 8,400.*
Put CN8200MBePW120628 (QD2W) exercise level 8,200.*

Call STI 2950MBeCW120831 (QE8W) exercise level 2,950.*
Put STI 2850MBePW120831 (QE9W) exercise level 2,850.*
Call STI 3000MBeCW120629 (P8BW) exercise level 3,000.*
Put STI 2900MBePW120629 (P8CW) exercise level 2,900.*

UOB led the vanguard
UOB led the rebound in the STI yesterday, rising 2.2% dod to close at $17.80. Its peers DBS (+0.5% dod, $13.25) and OCBC (+1.3% dod, $8.59) also climbed higher.

Call UOB MB eCW121101 (QD7W) exercise price $19.00.*

Call DBS MB eCW120904 (QC6W) exercise price $14.00.*
Put DBS MB ePW120718 (P2NW) exercise price $12.80.*

Call OCBC Bk MBeCW120802 (P1VW) exercise price $9.00.*
Put OCBC Bk MBePW120718 (P2OW) exercise price $8.40.*

Supply chain moving
Supply chain managers Olam (+3.1% dod, $1.83) and Noble (+1.8% dod, $1.115) rallied sharply yesterday, rebounding from lows seen in 4Q11.

Call OLAM MB eCW121005 (QF2W) exercise price $2.00.*

Call NobleGrpMBeCW121105 (QF8W) exercise price $1.20.*

Overnight Market Wrap

Markets Flat despite Strong Home Sales

The S&P500 rose only 0.1% yesterday despite a stronger than expected existing home sales. The National Association of Realtors said that April sales rose 3.4% to an annual rate of 4.62mn. However, stocks and Euro fell after former Greek Prime Minister Papademos said that the country is considering preparations to leave the eurozone.

Facebook shares slipped another 8.9% to $31, which is 18.4% below its IPO price of $38. Some analysts are putting the blame on its head underwriter, Morgan Stanley, for its aggressive last-minute share sale increase and the high IPO price.

Overnight Markets

Indices	Last	Change
STI	2823.75	1.2%
HSI	19039.15	0.6%
DJIA	12502.81	-0.0%
S&P 500	1316.63	0.1%
Nasdaq	2839.08	-0.3%

Corporate News

Corporate Announcements

Ezion issued S$100mn of 5.25% notes due 2015

Noble increased the size of its revolving credit facilities from US$1.5bn to US$2.4bn.

Results Announcement
Tue 29 May: Biosensors 4Q12

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