Warrants Highlight

Crude palm oil tumbles to 3-year low

Yesterday, Singapore-listed crude palm oil (CPO) counters took a collective fall on the back of tumbling crude palm oil futures prices. CPO names from Wilmar (-1.3%, $3.16) to IndoFood Agri (-3.4%, $1.30) and Bumitama Agri (-4.6%, $1.035) were amongst some of the biggest losers on the STI for the day.

CPO prices lowest in three years
Yesterday, the CEO of Adani Wilmar – an Indian edible oils company which is a JV between Adani Group and Wilmar International – said that some palm oil importers in India, the world’s biggest buyer of palm oil, may default or renegotiate contracts as a 23 percent drop in prices since the end of August makes purchases unprofitable.

The comment sent the December palm oil futures listed on the Malaysia Derivatives Exchange to a low of 2,230 ringgit/metric ton in the morning, the lowest level for the most active month since November 2009. Just a day before on October 2, the futures had closed at its lowest level in three years at 2,255 ringgit/metric ton. This fall takes the total decline in futures prices in the last five weeks to 25%, and a 38% pullback from its 13-month high in April.

…while CPO inventory to reach record high
In the meanwhile, the director at Godrej International Ltd, Dorab Mistry said on September 23 that CPO stockpiles in Malaysia will increase in October, November and December and may reach a record 3 million tons by January.

According to Bloomberg, crude palm oil production peaks between July and October. The industry estimates for the southern region of Peninsular Malaysia showed output grew more than 26 percent in September.

CPO warrants to leverage on CPO plunge
Investors keen to take a leveraged view on the recent CPO price movements can do so via warrants listed over CPO names such as Wilmar, IndoFood or Bumitama.

Those with a view that the CPO names will rebound along with CPO prices can consider buying call warrants while those with a leveraged bearish view can consider trading put warrants over Wilmar.

Singapore Market Wrap

Regional shares mixed

Uncertainty over Spain's possibility of seeking a bailout left regional indices mixed. The STI declined marginally by 0.06% to close at 3077.14 for the trading day.

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

Commodities stocks topple
Singapore-listed commodities firms fell hard for today's trading session attributed partly to a weak oil market coupled with concerns over the global outlook. Day-on-day, Noble plunged 2.65% to $1.285, Wilmar dropped 1.25% to $3.16 and Olam fell 1.47% to $2.01.

NobleGrpMB eCW130201(Q5OW) exercise level 1.40.*
NobleGrpMB ePW130201(Q8YW) exercise level 1.25.*

Wilmar MBeCW130201 (Q3OW) exercise level 3.50.*
Wilmar MBePW130116 (Q5RW) exercise level 3.15.*

OLAM MB eCW130201 (Q4MW) exercise level 2.00.*

Singapore to allow dual-class shares listing
The Ministry of Finance has issued a statement to allow companies to issue different classes of shares. This not only gives companies greater flexibility for raising capital and to meet different investor preferences, it also allows the enhancement for Singapore as a business hub. Prior to this news, SGX dropped 0.57% to close at $6.94 for the trading day.

SGX MB eCW121203 (Q0LW) exercise level 7.50.*
SGX MB ePW121204 (Q4TW) exercise level 6.60.*

Overnight Market Wrap

Third day of rally

The S&P added 0.3% dod to close at 1450.34 after the US announced good economic data.

The ISM non-manufacturing data in Sept came in at 55.1, beating analyst estimates of 53.4. ADP employer services said in a separate report that private payrolls added 162k in September as compared to August, beating expectations from a Bloomberg survey calling for a 140k increase.

Overnight Markets

Indices	Last	Change
STI	3077.14	-0.1%
HSI	20888.30	0.2%
DJIA	13494.60	0.1%
S&P 500	1450.99	0.4%
Nasdaq	3135.23	0.5%
China A50	7275.19	1.5%

Corporate News

Corporate Announcements

Earnings release dates:
Fri 12 Oct: SPH (4Q12)
Thu 18 Oct: SGX (1Q13)
Thu 18 Oct: Keppel Corp (3Q12)
Thu 25 Oct: NOL (3Q12)

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