Warrants Highlight

Not that Golden for Hong Kong

Macquarie is listing new HSI warrants this morning.

Macquarie’s HSI warrants

This week, China celebrated their National day with an eight day public holiday. During this period, China’s economic data continued to be released with the uncertainty over China’s economy a drag on investor optimism. H-shares or chinese companies listed on the Hong Kong exchange comprise of 28.4% of the index weighting for he Hang Seng Index.

Data shows signs of contraction
On Wednesday, China's service sector for Sept came in at 53.7, lower than the 56.3 figure last month. This followed an earlier set of data showing a continued contraction in the manufacturing sector. Manufacturing PMI came in at 49.8 for Sept, missing Bloomberg survey estimates of 50.1.

On the same day, the Asian Development Bank slashed growth estimates for Asia’s emerging economies, citing a slowdown in China that added on to investors’ worries.

A bright spot indeed
While growth in China appears to have slowed with headline GDP falling, consumption seemed to remain rather stable with people still spending and going on trips this holiday season. According to the National Tourism Administration, the first five days of the golden week saw the number of tourists totalling 5.7 million, up 26% compared to the same period a year ago. Tourism revenue at China’s 119 major attractions for the first five days also increased 30%, reaching 957 million yuan.

Hong Kong luxury sales take a turn
However, in Hong Kong, purchases of luxury goods fell this holiday. The Travel Industry Council, Joseph Tung said that purchases are “set to fall at least 10% from a year ago”. This decline comes although tourists increased, probably implying that the average spending per visitor has dropped.

Mainland tourists had always been attracted to purchasing luxury goods in Hong Kong because of its lower taxes. However these days, tourists have turned to Europe due to its attractive exchange rates.

Financial Secretary John Tsang said last month that “Hong Kong’s risk of a ‘technical recession’ may increase after declines in exports and slow down in retail sales” and that “the falling trend of luxury goods demand is visible.”

Singapore Market Wrap

More good news from the US

Asian indices rose as reports on US jobs and service industries exceeded economists' expectations on Wednesday night. The STI closed higher by 0.3% at 3086.64 yesterday.

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

STI 3250MBeCW121231 (Q4OW) exercise level 3,250.*
STI 3100MBePW121231 (Q4PW) exercise level 3,100.*

SGX to allow US investors to trade SGX-listed MSCI Indonesia Index futures
SGX announced that the US Commodity Futures Trading Commission (CFTC) has permitted the MSCI Indonesia Index futures to be sold to US investors. The MSCI Indonesia futures is the first offshore equity index futures allowing investors easy access to the Indonesian stock market. SGX rose 0.3% to $6.96 day-on-day.

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

CapitaLand bags prestigious Golden Circle Award
CapitaLand has been accorded the prestigious Golden Circle Award as well as the Most Transparent Company Award (Real Estate) for the 12th consecutive year at the Securities Investors Association Singapore (SIAS) Investors' Choice Awards 2012.

The Golden Circle Award is the highest honour accorded to the Overall Most Transparent Company across industry sectors with CapitaLand Group winning a total of five accolades at the event.

Capitaland spiked 3.5% to close at $3.29 for the trading day. According to Bloomberg, Capitaland has 34% of assets in China. It is worth noting that Yanlord, a real estate development company for high-end residential properties in China, also jumped 2.1% to close at $1.225.

CapitalaMB eCW130204 (Q4HW) exercise level 3.40.*
CapitalaMB ePW130103 (Q4EW) exercise level 3.00.*

Overnight Market Wrap

Rally in S&P because of option trading?

Last night, jobless claims figure was better than forecasted with 367000 people filing for jobless claims last week. Tonight, the markets will be looking out for more employment data such as nonfarm payrolls as well as the unemployment rate to determine if the employment situation in the US has improved.

In Europe, the European Central Bank president Mario Draghi said that he is ready to start purchasing bonds once conditions are met. Thus, the onus is on Spain to decide if they want a bailout.

After the reports, the S&P rallied 0.7% day on day to close at 1461.40. Last night, an investor bought 11,000 calls expiring tonight, with an exercise price of 1465. Some traders chose to use it as a reason for the rally.

Overnight Markets

Indices	Last	Change
STI	3086.64	0.3%
HSI	20907.90	0.1%
DJIA	13575.40	0.6%
S&P 500	1461.40	0.7%
Nasdaq	3149.46	0.5%
China A50	7275.19	1.5%

Corporate News

Corporate Announcements

SGX receives U.S CFTC approval for MSCI Indonesia futures contracts. This allows U.S. investors to directly trade the SGX MSCI Indonesia Index futures contracts within the U.S. with ease. The SGX-listed MSCI Indonesia futures is the first offshore futures contract providing international investors easy and efficient access to the fast-growing Indonesian market.

Earnings release dates:
Fri 12 Oct: SPH (4Q12)
Thu 18 Oct: SGX (1Q13)
Thu 18 Oct: Keppel Corp (3Q12)
Fri 19 Oct: CapitaMall Trust (3Q12)
Thu 25 Oct: NOL (3Q12)

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