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

The newly listed HSI warrants which expire in June 2013 above are thus, ideal for both bullish or bearish HSI investors with a longer time horizon.

Hong Kong stocks cheaper than U.S, European stocks
Yesterday, the Hang Seng Index (HSI) fell for a third straight day to close at its lowest in six months. The last two days in particular, have seen the 19,000 level quickly give way. The level had previously been a strong fort for the HSI throughout the month of July.

The HSI is currently 13% away from its February highs of 21,680.

The acute drop has also led to the HSI seemingly being undervalued compared to key indices in the U.S. Specifically, shares on the HSI currently trade at 9.9 times estimated earnings on average, compared with 12.9 for the Standard & Poor’s 500 Index and 10.5 for Stoxx Europe 600 Index.

“Buying puts as low cost way to insure against possible losses”, MER
In a weekly review of markets published last Friday on July 20, Macquarie Equities Research (MER) expressed their view that while regional equity markets are not overly expensive, they are unlikely to rally on a sustainable basis from current valuation levels while global economic momentum is decelerating.

In the report, MER suggested that investors curb their enthusiasm and retain a relatively defensive bias to their portfolios while taking on cyclical risk only where expectations are low and balance sheets strong. It was stated that investors who are worried about the outlook implied by bonds should consider buying index puts as a low cost way to insure against possible losses.

Singapore Market Wrap

IMF yearns for more Chinese organic growth

The International Monetary Fund says that China's economy faces significant downside risks and relies too much on investments. Going forward, they urge the Chinese to boost domestic consumption, and Asian equity markets fell when investors caught wind of the news. On the domestic front, Singapore's central bank stated that "growth may fall below 1% should the US and Chinese economies slump and the European crisis worsen significantly."

In the afternoon session, markets pared losses when a European Central Bank council member raised arguments in favour of awarding Europe's rescue fund a banking license. If the ESM obtains a banking license, it would gain access to ECB lending thus easing concerns that its 500bil euro cash wouldn't be enough to bail out EU members.

At the end of the trading session, the HSI closed at 18877.33, down 0.1% dod while the STI closed at 2990.92, down 0.3% 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 2950MBePW121031 (Q0ZW) exercise level 2,950.*

IHH debuts on Singapore stock exchange
IHH Healthcare, the world's third-largest IPO this year, started trading on SGX mainboard yesterday. Its managing director pointed out that they are looking to buy more hospitals "if opportunities arise that fit the overall game plan". Also, they aim to add 67% more hospital beds by 2017 so as to meet demands from the richer and more demanding populations.

The healthcare industry is more resilient compared to other industries since visiting a doctor is non-elective. However, IHH's focus on premium healthcare services means that there is still a risk that patients may turn to public clinics in times of financial difficulties.

IHH made a spectacular performance on its debut and closed at $1.225, up 10% from its IPO issue price.

Call warrant IHH MBeCW121203 (Q3FW) exercise price $1.20.*
Call warrant IHH MBeCW130103 (Q3GW) exercise price $1.35.*

Biosensors report strong earning results
After the STI closed yesterday, Biosensors, a developer, manufacturer and marketer of innovative medical devices announced its 1Q 2013 results. Sales increased 51% year on year (yoy), operating profit increased 44% yoy while net profit increased 17% yoy, hitting US$28.3mil this quarter.

Their CEO, Dr Jack Wang attributes Biosensor's strong financials to "sustained robust growth in the IVP sales, consolidation of the operating results of JW Medical System Ltd and increased licensing revenue".

Biosensors closed at $1.195, down 0.4% dod.

Call warrant BiosensoMBeCW121101 (QD9W) exercise price $1.40.*
Put warrant BiosensoMBePW130103 (QZ5W) exercise price $1.10.*

Overnight Market Wrap

Equity markets closed flat

S&P closed at 1337.89, flat for the day. Markets were in the black initially with speculation that the Euro rescue fund may be expanded and the possibility of granting the ESM a banking license. With a banking license, the ESM will be granted access to the ECB lending making funds enough to bailout countries like Spain and Italy.

However, an unexpected fall in the US new home sales caused markets to tumble. The US new home sales decreased 8.4% month on month, largely missing the Bloomberg survey which estimates an increase of 0.7%. Also, the sell-off of Apple stock which was down 4.3% after reporting corporate results added to the decline of the equity markets.

Overnight Markets

Indices	Last	Change
STI	2990.92	-0.3%
HSI	18877.33	-0.1%
DJIA	12676.05	0.5%
S&P 500	1337.89	-0.0%
Nasdaq	2854.24	-0.3%
China A50	7451.82	-0.4%

Corporate News

Corporate Announcements 

Biosensors 1Q13 net profit grew 45% year-on-year to US$32.6mn.

Results announcements:
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, Wilmar 2Q12

Ex-dividend dates:
Mon 6 Aug: SingTel ($0.09 final)