Warrants Highlight

Record sales next quarter too?

CapitaLand climbed higher yesterday, increasing close to 1% day on day (dod) amid good housing data. It was one of the movers in the STI, which increased less than 0.1% dod.

Macquarie’s Capitaland warrants

Home sales reached record highs
After Singapore private home sales fell 27% in August, possibly due to the inauspicious Hungry Ghost month, home sales rose 83.7% in September according to the Urban Redevelopment Authorities. Sales hit a high of 2,621 units in a month, reaching its highest recorded levels since July 2009. This is a 60.7% rise compared to the same month last year.

Taking a closer look at the recent quarter, home sales climbed 7.7% as compared to the previous quarter with home prices reaching a record high amid low interest rates. Mr Khaw Boon Wan, Singapore’s minister of National Development said in parliament that “ample global liquidity and low interest rates in recent years have contributed significantly to the strong demand for residential property”. The current low interest rates environment has made it cheaper to take housing loans, thereby encouraging property demand.

Like China, Singapore’s government has been trying to reign in the surging property prices for fear of a property bubble. However, prices continued to climb.

One more round of property cooling measures
This month, the government announced a sixth cooling measure as they will not allow prices to outstrip gains in incomes, Finance Minister Tharman Shamugaratnam said at a conference. The measure came after UOB announced 50-year home loans, which Mr Khaw said was “some gimmick”. The latest tightening measure introduced by the Singapore government has underlined its determination to keep prices in check.

With effect from 5 Oct, loan to valuations will be lowered if the loan tenure is more than 30 years or if loan period exceeds 65 years. This is arguably by far the most stringent measures, targeting not only home buyers but also developers and banks. Therefore, although housing prices is at a peak now, whether it will continue its uptrend despite yet another round of tightening measures remains to be seen.
 

Singapore Market Wrap

Another flat day

The week began with the STI closing marginally flat at a 0.04% increase to 3043.05 day-on-day (d.o.d). Lack of catalyst caused the Singapore Exchange to have a relatively quiet trading session with investors looking forward to the beginning of the earnings season.

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

Sept Home sales hit 3 years high
Private home sales jumped 83.7% to 2621 units in September, making this the highest since July 2009. This sales figure is a 60.7% increase y.o.y. Capitaland ended 1% up to close at $3.19 d.o.d.

Call CapitalaMB eCW130204 (Q4HW) exercise price $3.40.*
Call CapitalaMBeCW130103 (Q0MW) exercise price $3.00.*
Put CapitalaMB ePW130103 (Q4EW) exercise price $3.00.*
Long Dated Call CapitalaMBeCW131202 (Q7YW) exercise price $3.60.*

Retail Sales increased 0.9% in August vs July
On a year-on-year (y.o.y) basis, retail sales increased 3.2% with the telecommunications apparatus & computers staying flat at 0%. Huge increases came from Medical Goods & Toiletries (9.1%) as well as Supermarkets (8.2%). Singtel closed up 0.6% to $3.17 with IHH dropping 0.4% to $1.275 for the trading session.

Call SingTelMB eCW130301 (PB6W) exercise price $3.30.*
Call IHH MBeCW121101 (Q3GW) exercise price $1.35.*

Overnight Market Wrap

S&P biggest rally in 2 weeks

After consumer confidence reached a record high in 5 years, markets saw confirmation last night. The US retail sales increase was higher than estimates.

In Sept, sales climbed 1.1% although the Bloomberg survey was calling for a 0.8% increase. This probably means that consumers are starting to spend, hence spurring the American economy.

Looking closely at the earnings, Citigroup reported numbers last night. Surprising third quarter profits and bond-trading revenue from the company sent its shares soaring 5.5%. It was the biggest gain in the S&P index, leading the index to close at 1440.13, gaining 0.8% day on day.

Overnight Markets

Indices	Last	Change
STI	3043.05	0.0%
HSI	21148.20	0.1%
DJIA	13424.20	0.7%
S&P 500	1440.13	0.8%
Nasdaq	3064.18	0.7%
China A50	7277.64	-0.1%

Corporate News

Corporate Announcements

GLP has signed a new lease agreement of approximately 18,000 square metres with a division of COFCO, China's largest food processing, manufacturing and trading company.

Earnings release dates:
Wed 17 Oct: Ascendas REIT (2Q13)
Wed 17 Oct: Kepland (3Q12)
Thu 18 Oct: SGX (1Q13)
Thu 18 Oct: Keppel Corp (3Q12)
Fri 19 Oct: CapitaMall Trust (3Q12)
Tues 23 Oct: Mapletree Industrial Trust (2Q13)
Thu 25 Oct: NOL (3Q12)
Thu 25 Oct: CapitaCommercial Trust (3Q12)
Thu 25 Oct: CapitaMalls Asia (3Q12)
Tues 30 Oct: Capitaland (3Q12)
Fri 2 Nov: SIA (2Q12)
Mon 5 Nov: SembCorp Marine (3Q12)
Wed 7 Nov: UOB (3Q12)
Wed 7 Nov: Biosensors (2Q13)
Thurs 8 Nov: Noble (3Q12)
Fri 9 Nov: SembCorp Industries (3Q12)
Fri 9 Nov: OCBC (3Q12)
Fri 14 Nov: GLP (2Q13)
Fri 14 Nov: City Dev (3Q12)

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