Time is running out for actions from China’s policymakers, says Macquarie Research Equities (MER) in a research report published yesterday.

While many are anxiously awaiting more economic data points, the drama surrounding the home purchase restriction policy continued and reached its climax with PBoC denying it proposed replacing the home purchase restriction with property taxes, which had been widely quoted by media earlier from a PBoC research report. Separately, the central bank adopted another Rmb365bn in reverse repos to fine tune the interbank liquidity, leading to further divisions in market expectations for monetary loosening – this means another RRR cut/rate cut, if one occurs in coming weeks, could provide a positive surprise to many.

Another red flag to watch is the State Council’s recent probe into the risks of “triangle debt” between public and private sector companies – these problems hit Chinese companies hard in the early 1990s and, if found to be severe now, could pose systemic risks to an already fragile economy.

Outside of China, sentiment is supported by the FOMC minutes’ dovish tones on further easing. On the data side, things still look bad overall. Concerns on global demand further intensified after Japan’s weak export numbers were reported and after August Euro-zone and German PMI data suggested further deterioration in that region. Uncertainties from Greece will likely linger, at least until the Troika?s review of Greece?s reforms finishes in mid-Sep.

MER’s technical views: A share on the edge to break down key support level
The MSCI China Index fluctuated slightly below its critical 55 support in the past week. There were no obvious improvements from the previous week’s close, nor was a breakdown clearly formed – MER still needs to watch another week’s trading. The RSI was in generally bullish territory before slightly deteriorating to a neutral zone. The HSI stayed well above its 200day moving average and the relative strength index held well in a bullish zone.

The CSI 300 didn’t struggle too much before heading for its long-held support of 2,272, which was formed in early January. The index closed at 2,276 on Friday. If it breaks the 2,272 level decisively, the next support would be 2,100 (implying another 8% downside). The RSI continued to be in a bearish zone.

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Singapore Market Wrap

China leads decline with industrial profits falling

China announced industrial profits which fell 5.4% in July compared to a year ago. The sharp drop added on to investors' concerns that the second largest economy is slowing. China's Premier Wen Jiabao said that he "urged extra measures to support exports and help meet economic targets as evidence mounts that the nation's slowdown is deepening" as quoted from Bloomberg.

Xinhua, the official press agency of China, said that Wen called for faster payment of export tax rebates, greater use of export credit insurance and reduced inspections and fees to ease the burden on companies. He also said that China should substantially improve the environment for companies' operation and improve companies' confidence.

The Shanghai index fell 1.7% day on day, leading Asian markets on their decline. Both the STI and HSI did relatively well compared to the Shanghai index, with the STI closing at 3044.49, down 0.2% dod and the HSI closing at 19798.67, down 0.4% dod.

STI 3100MBeCW121031 (Q1AW) exercise level 3,100.*
STI 2950MBePW121031 (Q0ZW) exercise level 2,950.*

HSI19800MBeCW120927 (Q1DW) exercise level 19,800.*
HSI20400MBePW120927 (Q1SW) exercise level 20,400.*

Ezra to list wholly owned subsidiary Triyards
Ezra announced that its engineering and fabrication division, Triyards, has received conditional eligibility to list on the Main Board of the SGX. The listing will be a "proposed introduction" whereby Ezra is proposing to distribute 33% of Triyards' issue ordinary shares, or up to 107.2mil ordinary shares, on the basis of one Triyards share for every 10 Ezra shares. This is subjected to the approval at Ezra's extraordinary general meeting.

Mr Lionel Lee, Managing Director of Ezra, said that "the proposed listing of Triyards shows Ezra's confidence in our established track record in shipbuilding, offshore platform and subsea module fabrication to take advantage of new opportunities". Going forward, "Triyards will focus on developing its core business and establish its own mark in the industry, and yet remain a distinct member of Ezra. This allows both companies to pursue growth opportunities separately, benefitting shareholders directly".

Investors seem to agree with Mr Lee and bought the counter on the news. Ezra closed at $1.06, up 1.9% dod.

Call warrant Ezra MBeCW121101 (QD8W) exercise price $1.10.*

Singles to gain access to HDB directly
Over the weekend, the 2012 National Day Rally was broadcast live from the University Culture Centre at the National University of Singapore. Among the pressing issues that Prime Minister Lee Hsien Loong addressed, he talked about singles facing troubles with purchasing homes.

Currently, singles can only buy resale flats after the age of 35 and PM Lee is aware that the high resale prices can be a problem for singles. Thus, National Development Minister Khaw Boon Wan will actively look into how they can get access to HDB directly. If that is the case, the demand for resale flats will probably fall, bringing down the prices of resale flats. With prices of resale flats dropping, the price of private properties might possibly follow suit.

Capitaland, one of Asia's largest real estate companies closed at $3.05, down 0.3% dod.

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Call warrant CapitalaMBeCW130204 (Q4HW) exercise price $3.40.*
Put warrant CapitalaMBePW130103 (Q4EW) exercise price $3.00.*

Overnight Market Wrap

Merkel to stand by Greece

Yesterday, Bloomberg reported that Alexander Dobrindt, general secretary of the governing Bavarian Christian Social Union, told the Bild newspaper that Greece would no longer be in the euro by 2013. With that statement made, German Chancellor Angela Merkel rebutted, asking people to "weigh their words" since such comments are "damaging" in times like this.

Her statement further emphasizes her determination to keep the euro together and she added that Greece is undertaking "serious efforts" to reduce its debts so Germany will stand by the country. Euro leaders are now awaiting a report from the troika of creditors so as to decide if they are easing the terms of the US 240bil loan.

European investors cheered Merkel's resolute and the Euro Stoxx50 rose 1.1% dod. US investors were undecided between the Euro situation, the economic situation in China and this week's Jackson Hole meeting. The S&P ended flat, closing at 1410.44.

Overnight Markets

Indices	Last	Change
STI	3044.49	-0.2%
HSI	19798.70	-0.4%
DJIA	13124.70	-0.3%
S&P 500	1410.44	-0.1%
Nasdaq	3073.19	0.1%
China A50	7053.09	-2.0%

Corporate News

Corporate Announcements

Results announcements:
Tue 28 Aug: Olam 4Q12

Ex-dividend dates:
Thu 30 Aug: Sakari ($0.02), UOB ($0.20)
Wed 26 Sep: SGX ($0.15)