Warrants Highlight

Recent developments lead DBS and SGX higher

This morning, Macquarie is listing new warrants over DBS (+0.2%, $14.22), SGX (+0.9%, $6.85), Keppel Corp (+0.3%, $11.25), Sembcorp Marine (+0.2, $4.92) and Indofood Agri (+0.4%, $1.29), providing higher strikes for bullish investors.

While some of the biggest US banks have been reporting better than expected earnings, Singapore’s financial companies also had recent news to cheer about. In particular, DBS and SGX have outperformed the index.

S$450 million profits from DBS divestment
Last Thursday, DBS Group agreed to sell part of its stake in The Bank of the Phillippine Islands (BPI) to Ayala Corporation for S$757.3 million in cash. The sale accounts for 10.4% interest in BPI, leaving DBS with an aggregate 9.9% investment in the bank.

Measured against the carrying value of the investment, this transaction will realise a gain of approximately S$450 million which is expected to help strengthen the capital position of DBS ahead of the introduction of Basel 3 on 1 Jan 2013.

Since the divestment, DBS has climbed 0.6% as compared to the close last Wednesday. The local bourse had gained 0.4% over the same period.

SET membership to enhance cross-border trading
Early this month, the Singapore Exchange (SGX) reported that trading and clearing activities picked up in the month of September as compared to August. Taking a closer look, daily average value increased 4% year on year but due to fewer trading days, the absolute trading volume actually slid 6% instead.

Last month, in a bid to benefit retail investors and brokers, the Asean Trading Link was launched. This was largely deemed as the first step towards creating a Southeast Asian platform, starting with the Singaporean and Malaysian stock exchanges being linked up on 18 Sept, thereby offering cross-border trading.

As a sign of progress, the stock exchange of Thailand (SET) became the third member to connect to the Asean Trading Link on Monday. Mr Charamporn Jotikasthira, the president of SET said that “together the three markets offer investors easier access to over 2200 listed companies with a market capitalisation of US$1.4 trillion, accounting for nearly 70% of the total market capitalisation of ASEAN”.

Following SET joining Asean Trading Link as its freshly minted member, SGX had gained 1.2% when compared to last Friday’s close. Over the same period, the STI climbed 0.17%.

Singapore Market Wrap

Positive Asia

The STI closed marginally in the green with an increase of 0.12% to 3046.81 for the trading session, despite overnight gains in the US markets due to positive retail sales data. This increase is in line with the various major Asia markets. Amongst the STI constituents stocks, there were 17 gainers to 9 losers, with 4 counters unchanged.

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

Investors await banks' result
The US earnings season began with the larger US banks outperforming analyst estimates. However, local investors have decided to stay cautious with Singapore banks, causing mixed price results. DBS improved 0.2% to $14.22. OCBC closed slightly higher at 0.1% to $9.30 while UOB dropped 0.4% to $18.20 for the trading session.

Call DBS MB eCW121101 (QZ1W) exercise level 15.00.*
Put DBS MB ePW121205 (Q7SW) exercise level 13.80.*

Call UOB MB eCW130104 (Q8BW) exercise level 19.50.*
Put UOB MB ePW130104 (Q8CW) exercise level 18.00.*

Call OCBC Bk MBeCW121203 (Q1QW) exercise price $10.*
Put OCBC Bk MBePW121203 (Q4SW) exercise price $9.00.*

Commodities stocks led the way
Despite a flat trading session, commodities counters spiked. Wilmar led the pack by jumping 2.2% to $3.23 while Noble gained 1.1% to $1.33 with Olam increasing 1.0% to close at $1.96 on a day-on-day basis. This is in spite of Brent crude oil easing to $115 due to ample supplies amid global uncertainty.

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

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

Call OLAM MB eCW130201 (Q4MW) exercise level 2.00.*

Overnight Market Wrap

S&P rallies for a second consecutive day

The S&P continued its rally from Monday night and closed at 1454.92, up 1% day on day (dod).

The rally came after US companies beat analysts' estimates yet again. Out of the 48 companies from the S&P which have reported earnings, 73% have performed better than expected. Both Mattel and Johnson and Johnson climbed 3.3% and 2.3% respectively after announcing earnings. Even after better than expected earnings, Goldman Sachs slipped 1% following a 3.6% rally on Monday. Citigroup gained 1.6% after CEO Vikram Pandit stepped down. According to Bloomberg, "the bank's board concluded that Pandit had mismanaged operations, leading to setbacks with regulators and loss of credibility with investors".

In Europe, the Financial Times reported that Spain is prepared to seek financial aid from the euro area although Prime Minister Mariano Rajoy had once said that it will not request aid until terms are clear. The Euro Stoxx600 rallied 1.3% dod.

Overnight Markets

Indices	Last	Change
STI	3046.81	0.1%
HSI	21207.10	0.3%
DJIA	13551.80	0.9%
S&P 500	1454.92	1.0%
Nasdaq	3101.17	1.2%
China A50	7283.06	0.1%

Corporate News

Corporate Announcements

Olam announced the issuing of S$400 million 6% fixed rate notes due 2022.

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)