Warrants Highlight

Big week for global markets

Equity markets have seen relatively large moves of late, mostly rallying on positive news streaming from Europe and speculation that governments will further intervene to ease the economy and European debt situation.

This week sees key economic bodies such as the Fed and ECB make announcements in this aspect, both on the night of August 2. ECB’s president Mario Draghi met with U.S. Treasury Secretary Timothy Geithner yesterday, after leaders in Berlin, Paris and Rome backed him by saying last week that they will do what is needed to protect the 17-nation euro.

Economic data concerning manufacturing in the U.S, Europe as well as China will be available mid week, while the closely watched U.S payroll figures will be out on Friday.

Big week of macro announcements
Mon 30 Jul: U.S Dallas Fed. Manufacturing Activity (July), Euro-zone Consumer Confidence
Tue 31 Jul: U.S Personal Income (June), U.S Consumer Confidence (July)
Wed 1 Aug: U.S ISM Manufacturing (July), U.S ADP Employment Change (July), Euro-zone PMI Manufacturing (July), China Manufacturing PMI (July)
Thu 2 Aug: FOMC Rate Decision, ECB Rate Announcement
Fri 3 Aug: U.S Change in Non-farm Payrolls (July)

Singapore Market Wrap

Optimism builds with expectations of more easing

Although both the HSI and the STI added gains, the STI saw more intraday volatility. The HSI gapped up at the start of its session and traded in a tight range of only 115 points. In contrast, the STI had a spike in the afternoon, after having a relatively quiet morning. The HSI closed at 19585.40, up 1.6% day-on-day (dod) while the STI closed at 3032.80, up 1.1% dod.

The sentiments of global investors have improved ever since Draghi pledged to do whatever it takes to keep the Euro together. He has won over Germany, Spain and Italy, whereby both Angela Merkel and Mario Monti agreed that decisions have to be implemented "as quickly as possible". The European Financial Stability Fund is also working with the ECB to lower cost and the head of euro-area finance ministers mentioned "we have no time to lose".

Following Draghi's statements, it is reported that Bernanke is considering cutting US interest rates in a bid to bring down short-term borrowing costs and spur economic growth.

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.*

DBS- second thoughts on Danamon?
The Dow Jones news agency reported that DBS Group Holdings has not completed the documentation for the acquisition of Bank Danamon. This is inconsistent with their enthusiasm previously with regards to the deal. In the past, DBS submitted everything but after the release of new banking laws in Indonesia, they have yet to complete the process again.

DBS was the weakest out of the three local banks yesterday, closing at $14.74, up only a mere 0.6% dod.

Call warrant DBS MB eCW121101 (QZ1W) exercise price $15.00.*
Call warrant DBS MB eCW130103 (K8KW) exercise price $16.00.*
Put warrant DBS MB ePW121018 (Q3LW) exercise price $14.00.*

Keppel Corp strengthens partnership with Singapore Changi Airport
After market hours, Keppel Corp announced that they have been awarded a 5-year maintenance contract by Changi Airport Group. The contract covers the facilities management services for the mechanical and electrical systems in Terminal 2 and will commence 1st Aug 2012.

Keppel Corp has been working with Singapore Changi Airport for 13 years and Mr Teng Hwee Onn, vice president for Engineering & Specialised System places a high emphasis on the standard and quality of Changi Airport's facilities. He said, "We look forward to continuing our partnership with Keppel FMO."

Keppel Corp closed at $11.10, up 0.9% dod.

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.*

Overnight Market Wrap

US Indices Unchanged ahead of Fed Meeting

Despite a strong rally in the European markets, the US indices mostly closed unchanged, with the S&P500 falling only 0.1% to 1,385.30. The US Federal Open Market Committee (FOMC) will commence their 2-day meeting tonight. According to Wall Street Journal, most analysts are not expecting the officials to announce QE3 on Wednesday.

Strong rescue rhetoric remains as the main support to the European markets. ECB chief Mario Draghi pledged last week that he will do "whatever it takes" to preserve the Euro. The comments were echoed by the French and Germans over the weekend.

Overnight Markets

Indices	Last	Change
STI	3032.80	1.1%
HSI	19585.40	1.6%
DJIA	13073.01	-0.0%
S&P 500	1385.30	-0.1%
Nasdaq	2945.84	-0.4%
China A50	7435.06	-0.3%

Corporate News

Corporate Announcements

Sakari 2Q12 net profit rose 66% year-on-year to $23.9mn.

Keppel's subsidiary has been awarded a 5-year maintenance contract by Changi Airport Group.

Results announcements:
Wed 1 Aug: Cosco 2Q12, CapitaLand 2Q12
Thu 2 Aug: SembCorp Marine 2Q12, OCBC 2Q12
Fri 3 Aug: DBS 2Q12
Tue 7 Aug: UOB 2Q12
Mon 13 Aug: Noble 2Q12
Tue 14 Aug: IndoFood Agri 2Q12, Wilmar 2Q12

Ex-dividend dates:
Mon 6 Aug: SingTel ($0.09)
Thu 30 Aug: Sakari ($0.02)
Wed 26 Sep: SGX ($0.15)