Warrants Highlight

OCBC to Pocket Billions / HSI Closed

Macquarie is pleased to list the following new warrant over OCBC this morning

Update on OCBC – realising billions for stake in FNN
Last Wednesday, OCBC hogged headlines after announcing that it was selling its stake in Fraser & Neave (FNN) for $410.5 million and also shares in Asia Pacific Breweries (APB) for $389.3 million. The amount pocketed by OCBC will be more as its 87.17% owned Great Eastern Holdings will also be selling its stake in these companies.

OCBC’s FNN stake will be bought by Thailand’s biggest beer maker Thai Beverage, who agreed to buy 46 million FNN shares from OCBC at $8.88 each, a 12% premium to FNN’s closing price of $7.96 on the date of its the announcement. Thai Beverage is also buying another 212 million shares from Great Eastern, for $1.89 billion. Together, OCBC and Great Eastern hold 18.2% of FNN shares.

… and close to one billion for stake in APB
In another deal, OCBC will also be selling its 3.4% stake in APB to Kindest Place Groups, a private investment Singapore company for $389.3 million at $45 per share, a 18.1% premium to APB’s close on the date of the announcement. Kindest will also be buying from Great Eastern its 4.6% stake in APB for $530.9 million.

OCBC said that the divestment of the share sales in APB and F&N is in line with the bank’s strategy of divesting its non-core assets and re-investing in its core financial businesses. OCBC is due to report its 2Q12 results in a week, before the market open on 2 August.

Update on HSI – market shut from typhoon this morning
The Hong Kong Hang Seng Index is shut this morning as a result of a typhoon signal 8.

Consequently, Macquarie will not be market making for all HSI warrants during the morning session. If however, the signal was dropped later during the day and the Hong Kong Exchange re-opened, market making will resume.

In the event that happens, the below two new HSI warrants listed today will begin trading this afternoon:

Singapore Market Wrap

A sea of reds

With the renewed concerns that Greece may not be able to repay its debts when their bond matures on 20th August, investors' confidence fell. After the Euro-zone finance ministers ended their conference call on Friday, focus is back on Greece and investors are once again worried about the possibility of Greece defaulting and exiting the European Union (EU).

Germany's news magazine, Der Spiegel reported that "The International Monetary Fund will stop paying further rescue aid to Greece, making the country's insolvency in September more likely". The IMF has informed the EU authorities of their intention and "it seems clear that the Greek government will not manage to reduce public debt to 120% of GDP by 2020".

Major Asian bourses bled, with the HSI leading the fall. The HSI closed at 19053.47, down 3% day-on-day (dod) while the STI closed at 2982.49, down 1.1% dod.

Call STI 2950MBeCW120831 (QE8W) exercise level 2,950.*
Call STI 3200MBeCW130328 (Q0QW) exercise level 3,200.*
Put STI 2850MBePW120831 (QE9W) exercise level 2,850.*
Put STI 2700MBePW130328 (Q0RW) exercise level 2,700.*

KepCorp secures S$103mil of conversion contracts
Keppel Shipyard announced yesterday that they have won three conversion contracts amounting to S$103mil. The first contract is to convert a tanker to a Floating Production Storage and Offloading (FPSO) unit and is scheduled to be completed by 3Q 2013. The second contract is to convert a tanker to a Floating Storage and Offloading (FSO) unit, scheduled to be completed by 1Q 2013 while the third contract is for the modification and upgrading of a tanker to an Early Production Vessel.

KepCorp closed at $11.06, down 1.1% dod.

Call warrant KepCorp MBeCW121001 (QF0W) exercise price $10.50.*
Call warrant KepCorp MBeCW121101 (Q0AW) exercise price $11.50.*
Put warrant KepCorp MBePW121203 (Q0IW) exercise price $10.00.*
Long dated call warrant KepCorp MBeCW130603 (M8PW) exercise price $11.818.*

SingTel to own 30% of OpenNet
After the STI closed for the day, SingTel announced on the SGX that its wholly-owned subsidiary, SingTel Interactive Pte Ltd (SIP) has been allocated 6mil ordinary shares of OpenNet at a subscription price of S$1.00 per share. With this subscription, SIP will now hold 30% of OpenNet. Just earlier this month, the Infocomm Development Authority (IDA) required OpenNet to increase its installation capacity by about 50% and if they fail to make installations within the stipulated time in their agreement, there may be fines imposed.

Singtel closed at $3.45, up 0.3% dod.

Call warrant SingTelMBeCW130301 (PB6W) exercise price $3.30.*

Overnight Market Wrap

Europe back in spotlight

With several worrying macro news events reported, global investors are getting more concerned and the S&P fell 0.9%, closing at 1350.52.

In China, an academic member of the People's Bank of China monetary policy committee predicted that the Chinese expansion will slow to 7.4% this quarter, the US labour market leaves more to be desired, while Greece leaving the Euro zone remains a question.

Whether Greece is able to attain further funding is dependent on whether they can meet their debt obligations and Germany's economy minister said he is "very sceptical" that European leaders can bailout Greece. Today, international creditors will arrive in Athens to access Greece's progress in meeting bailout targets. Because of the worrying situation in Europe, Germany, the Netherlands and Luxembourg which are all AAA- rated countries have their economy downgraded from stable to negative by Moody's.

Overnight Markets

Indices	Last	Change
STI	2982.49	-1.1%
HSI	19053.47	-3.0%
DJIA	12721.46	-0.8%
S&P 500	1350.52	-0.9%
Nasdaq	2890.15	-1.2%
China A50	7464.31	-1.7%

Corporate News

Corporate Announcements

Results announcements:
Wed 25 Jul: Biosensors 1Q13, SIA 1Q13
Fri 27 Jul: SGX 4Q12
Mon 1 Aug: Cosco 2Q12, CapitaLand 2Q12
Thu 2 Aug: SembCorp Marine 2Q12, OCBC 2Q12
Fri 3 Aug: DBS 2Q12
Tue 7 Aug: UOB 2Q12
Tue 14 Aug: IndoFood Agri 2Q12

Ex-dividend dates:
Wed 25 Jul: Keppel ($0.18 interim)
Mon 6 Aug: SingTel ($0.09 final)