Warrants Highlight

Singapore property - will sales increase in Sept?

The Urban Redevelopment Authorities (URA) announced the new private home sales in August, which declined 27% compared to the month in July. The sales in Singapore had increased by 41.9% month on month in July after a decline in May and June.

Home sales likely to improve in September
Historically, August has always been a slow month as some Chinese consider the Hungry Ghost festival to be inauspicious. Cognizant of this seasonality, developers have also cut back on their launches, with the total launches falling by 37% last month. According to a Straits Times article yesterday, sales numbers are likely to improve in September with larger new launches coming up. The article also mentioned that demand for new homes may still stay healthy on the back of the third quantitative easing in the US, coupled with low interest rates.

CapitaLand – share price reacting to data?
Capitaland, one of Asia’s largest real estate companies fell 0.6% yesterday, after home sales figures were released. However, based on its financial report for 2011, Singapore only contributes 35.6% of CapitaLand’s total revenue, with 22% attributed to the China market.

Hungry ghost slowdown in China too?
Housing data also slowed in China for the month of August. According to the Chinese Statistics Bureau’s monthly report published yesterday, prices for newly constructed homes rose in fewer cities for the month of August compared to July.

Officials in China have been trying to rein home prices by introducing tightening measures. The slowdown in China’s property market suggests some effectiveness in the measures, easing the government’s urgency in limiting property prices. Chinese developers may be relieved if Chinese officials decide to loosen these measures.

Yanlord, Capitaland – performance over Hungry Ghost period
Yesterday, investors appeared to show a preference for Chinese real estate developer Yanlord which has developments primarily in China. The company’s share price added 0.4% dod on a day where the overall bourse fell 0.4%. Yanlord also outperformed Capitaland which slipped 0.6%.

However, over the Hungry Ghost period from 17 Aug to 14 Sept, the STI increased 2.7% while Yanlord stayed unchanged. Capitaland was a surprise, outperforming the STI and added 5%.

Singapore Market Wrap

STI ends winning streak

The STI fell 0.4% day-on-day (dod) to 3,067.98, ending its 5 day winning streak that saw the index rally 70 points, among its 30 components, 20 ended lower. The escalation of the anti-Japanese demonstrations in China and the disappointing economic data from US seemed to have dampened the QE3 euphoria.

The China A50 Index fell another 0.9% yesterday to 7,073.15 after its 2.2% drop on Monday.

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

CN8500MBeCW121129 (QP3W) exercise level 8,500.*
CN7500MBePW121129 (QP5W) exercise level 7,500.*

DBS underperformed peers
DBS gapped down in the morning and hovered around $14.48 for most of the day before its sell off in the late afternoon. DBS shares ended 1.2% lower day-on-day at $14.45. Both UOB (-0.9% dod, $19.63) and OCBC (-0.3% dod, $9.31) also fell yesterday.

Business Times reported that the DBS private banking unit plans to increase its assets under management in Greater China by 15% to 20% a year for the next three years.

Call warrant DBS MB eCW121205 (Q7RW) exercise price $15.00.*
Put warrant DBS MB ePW121101 (Q4UW) exercise price $15.00.*
Long dated call warrant DBS MB eCW131202 (Q7ZW) exercise price $16.00.*

Call warrant UOB MB eCW130104 (Q8BW) exercise price $19.50.*
Put warrant UOB MB ePW121102 (Q3ZW) exercise price $19.00.*

Call warrant OCBC Bk MBeCW130102 (Q7VW) exercise price $9.20.*
Put warrant OCBC Bk MBePW121203 (Q4SW) exercise price $9.00.*

SGX - Asean Link to boost trade
Singapore Exchange (+1.0% dod, $7.19) and Bursa Malaysia started offering cross-border trading yesterday. The move is part of the grand plan to link-up Asean stock exchanges to further boost trading volume. Thailand will be joining the duo next month. Bloomberg reported that the combined average daily value of stocks traded in the 3 markets this year is US$2.5bn.

Call warrant SGX MB eCW121203 (Q0LW) exercise price $7.50.*
Put warrant SGX MB ePW121204 (Q4TW) exercise price $ 6.60.*

Overnight Market Wrap

European debt crisis continues to take a toll on equity markets

Last night, home prices in the US increased 2.2% as compared to the previous quarter. Adding on to the good news, confidence in homebuilders rose in September. Despite the improvement in housing data, European indices fell and the US indices were mixed for the day. The S&P closed at 1459.32, down 0.1% dod.

Indices did not perform as investors were worried about the debt crisis in Europe. Initially, hopes were raised after the European Central Bank's bond buying plans were announced and Germany's court ruled in favour of supporting the European Stability Mechanism. However, following the uneventful meeting of European finance ministers in Greece last week, the hype was downplayed.

In the US equity markets last night, defensive counters were in play. Telecoms, healthcare and consumer staples led the increase while commodities and financials fell the most.

Overnight Markets

Indices	Last	Change
STI	3067.98	-0.3%
HSI	20601.90	-0.3%
DJIA	13564.60	0.1%
S&P 500	1459.32	-0.1%
Nasdaq	3177.80	-0.0%
China A50	7073.15	-0.9%

Corporate News

Corporate Announcements

Ex-dividend dates:
Wed 26 Sep: SGX ($0.15)
Tue 6 Nov: Olam ($0.05)