Warrants Highlight

More measures from Chinese government?

After the US Federal Reserve announced the third quantitative easing, markets have turned their attention to the debt situation in Europe. Despite their concerns, Asian markets performed well yesterday as compared to their European and American counterparts which ended in the red on Wednesday.

Shanghai leads markets
Major Asian bourses ended in the black with the Shanghai Composite leading the other Asian markets in the rally. The HSI rallied more than 1%, with banks and property developers being the greatest gainers. In Singapore, Chinese-related counters also had a strong showing. Chinese shipping names, Coso Corporation and Yangzijiang were up 1% day on day while Chinese developer Yanlord was up 2.5%.

Below are some of Macquarie warrants listed over companies with exposure in China.

Weak industrial profits
Yesterday, China announced their industrial profits which fell the fastest this year, dropping 6.2% in the month of August compared to a year ago. The nation’s year to day industrial profits have been falling since April 2012, possibly indicating that the economic slowdown is extending.

Quantitative easing for China too?
On 6 Sept, the European Central Bank (ECB) announced their plans for a bond purchase program, known as ‘Outright Monetary Transactions’ (OMTs). OMTs is a program where the ECB will buy bonds with one to three years of maturities.

A week later, on 13 Sept, the Fed announced a third quantitative easing which aims to lower the unemployment rate in the US. QE3 comprises of an open ended purchase of US$40bil mortgage debt every month until labour situation improves significantly.

With two of the biggest economies announcing additional monetary easing, investors were hopeful that China, the second largest economy will also come up with more measures to stimulate global growth.

Investors bought into China stocks after the Shanghai Securities news, operated by the Xinhua News Agency, said there was speculation that China Securities Regulatory Commission would announce 10 measures to boost equities.

Singapore Market Wrap

STI ends higher

Asia indices recovered after Liu Shiyu, vice governor of the People's Bank of China, spoke about how a slowdown in growth is a desirable outcome of macroeconomic adjustments for China. The Straits Times Index rose 0.42% day-on-day to 3059.43, while the China A50 Index spiked 3.1% to 7166 during the trading session.

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

CN8000MB eCW130130 (Q7GW) exercise level 8,000.*
CN7000MB ePW130130 (Q7HW) exercise level 7,000.*

Tourism a positive in the global economy
The number of international tourist has grown by 5% during the first half of 2012 to 467 million with the Asia-Pacific region posting the strongest increase at 8%. Genting's hotel and casino businesses may benefit as they are dependent on tourist visits. Genting remained unchanged day-on-day at $1.375.

GentingSMB eCW130401 (Q7TW) exercise level 1.50.*
GentingSMB ePW130103 (QZ2W) exercise level 1.30.*

2012 a record year for Singapore Corporate Bond issues
A strong currency and demands from investments partly drove the volume of bonds issued so far this year to a record $26.9 billion. Data from Reuters show that the volume of bonds issued more than doubled from $12.4 billion in the first nine months of 2011. DBS is the top issuer of Singapore-issued bonds underwriting so far this year. It ended the trading session up 0.77% ($0.11) to $14.37 day-on-day.

DBS MB eCW121205 (Q7RW) exercise level 15.00.*
DBS MB ePW121018 (Q3LW) exercise level 14.00.*

Overnight Market Wrap

First rally this week

The S&P added 1.0%, closing at 1447.15 yesterday. Investors bought on news that Spain is taking further measures to cut its deficit and on speculations that China will do more to support growth.

The Spanish government announced its fifth austerity package in what may be a move to head off tougher conditions demanded as part of a bailout. The austerity measures include a new tax on lotteries as well as a cut in ministers' spending which would cut overall spending by 40bil Euro in 2013. The European Union has been waiting for Spain to decide if a bailout is needed and whilst no decision has been made, Spanish prime minister mentioned that he would "100%" seek help if bond yields remain too high.

After reports of the developments in Spain, investors shrugged off lousy durable goods orders in the US, which unexpectedly fell in the month of August. Actual figures fell 13.2% as compared to the month of July when the Bloomberg survey was calling for a fall of 5%.

Overnight Markets

Indices	Last	Change
STI	3059.43	0.4%
HSI	20762.30	1.1%
DJIA	13486.00	0.5%
S&P 500	1447.15	1.0%
Nasdaq	3136.60	1.4%
China A50	7166.16	3.1%

 Corporate News

Corporate Announcements

F&N request for trading halt.

Ezra shareholders will receive one TRIYARDS share for every 10 Ezra shares they hold; counter expected to debut on SGX Mainboard on 18 October 2012.

Earnings release dates:
Thu 18 Oct: SGX (1Q13)
Thu 18 Oct: Keppel Corp (3Q12)

Ex-dividend dates:
Tue 6 Nov: Olam ($0.05)