Warrants Highlight

HSI - trading at a 15 month high

Macquarie is listing new HSI warrants this morning.

Macquarie’s HSI warrants

HSI outperforms regional index
Last Friday, the HSI hit a 15-month high with volume exceeding the 15 day moving average, closing at 22,111.3. The last time the HSI traded above 22,000 was more than a year ago, on 2 August 2011. The index rallied 2.6% last week, outperforming the regional benchmark index. The MSCI Asia Pacific had only gained 0.8% during the same period.

Retail sales a positive surprise
After the HSI closed its trading session last Thursday, Hong Kong released its retail sales figures for the month of September. Retail sales volume increased 8.5% year on year, which was a pleasant surprise with economists estimating 5.8% growth. Total retail sales value rose 9.4%, in comparison with the 7.6% expected by economists.

A government spokesperson suggested that the growth could be partially attributed to the Mid-Autumn Festival which helped to boost spending. However, he added that “while the vibrant inbound tourism should continue to help support the retail business, the increased pressure on the labor market amid more cautious hiring sentiments, together with an uncertain external environment, may have a dampening effect on local consumer sentiment down the road”.

Still, after retail sales unexpectedly beat estimates, investors’ risk sentiments were buoyed and the HSI added 1.3% last Friday.

Private sector expands in October
Yesterday, Markit Economics released Hong Kong’s October HSBC Purchasing Managers Index (PMI) which climbed to 50.5 from 49.6 previously. A PMI reading above 50 indicates an expansion in the sector.

According to RTT News, “private sector output increased during the month, reversing the reduction reported one month previously. Employment in the sector returned to growth in October, ending a five-month sequence of job losses”. In addition, “input prices faced by companies increased for the third successive month, with both purchase prices and staffing costs increasing over the month. Output prices increased as firms passed on the higher costs to clients by raising their charges”.

The HSI still managed to close above 22,000 yesterday despite sliding 0.5% day on day.

Other new warrants
Together with new HSI warrants, Macquarie is listing new warrants over DBS and Keppel Corporation.

Singapore Market Wrap

Investors still waiting for market reinvigoration

Last Friday's negative US trading session exerted pressure on the Asian markets. Weakness in market sentiments were compounded by drops in profits for blue chip companies such as SIA and Cosco Corp. Despite STI's late morning rally, recovering from its intraday low of 3021.29, it eventually closed down at 3031.69, a 0.3% slip day-on-day.

Call STI 3100MBeCW130131 (PA7W) exercise level 3,100.*
Put STI 2800MBePW130131 (PA8W) exercise level 2,800.*

Cosco Corp's net profit down
Cosco reported a net profit of $26.6 million on a turnover of $937 million for it's 2012 3rd quarter result. Turnover from it's shipyard division dropped 3.3% to $923.5 million whereas dry bulk and other businesses decreased 11.2% to $13.5 million. The net profit attributable to shareholders fell 17.5% to $26.6 million on lower sale value of scrap materials and a one-off compensation to customers. Cosco rose 1.7% to close at $0.895 for the trading session.

Call CoscoCoMBeCW121105 (QK3W) exercise price $0.950.*

Derivatives and clearing volume growth offsets decline in securities market
SGX announced that derivatives and commodities trading volume have grown around 20% year-on-year (y.o.y). On the Securities front, turnover fell 6% y.o.y to S$26 billion and 8% month-on-month. On a positive note, Catalist securities turnover grew 90% y.o.y to S$626 million. SGX slipped 0.15% to $6.69 d.o.d.

Call SGX MB eCW130502 (RE5W) exercise price $7.20.*
Put SGX MB ePW121204 (Q4TW) exercise price $ 6.60.*

Overnight Market Wrap

S&P rises a day before elections

The S&P added 0.2% to close at 1417.26 last night.

This was despite the ISM non-manufacturing index missing estimates slightly. The service industry, which accounts for 90% of the US economy continued to expand in the month of October. The reading was at 54.2 while economists' estimated a 54.5. Also, the non-manufacturing employment index increased to 54.9, the highest since March.

Apple rallied 1.4% last night, outperforming the S&P index after the company said that demand for its iPad mini outstripped supply.

Overnight Markets

Indices	Last	Change
STI	3031.69	-0.3%
HSI	22006.40	-0.5%
DJIA	13112.40	0.1%
S&P 500	1418.57	0.3%
Nasdaq	2998.47	0.6%
China A50	7319.75	-0.1%

Corporate News

Corporate Announcements

Keppel offshore & Marine has announced that it's subsidiaries have secured contracts worth S$160 million.

Earnings release dates:
Tues 6 Nov: Ezion (3Q12)
Tues 6 Nov: SATS (2Q13)
Wed 7 Nov: UOB (3Q12)
Wed 7 Nov: Biosensors (2Q13)
Thurs 8 Nov: Noble (3Q12)
Thurs 8 Nov: UOL (3Q12)
Fri 9 Nov: SembCorp Industries (3Q12)
Fri 9 Nov: OCBC (3Q12)
Fri 9 Nov: Wilmar (3Q12)
Mon 12 Nov: Genting (3Q12)
Wed 14 Nov: GLP (2Q13)
Wed 14 Nov: City Dev (3Q12)
Wed 14 Nov: Singtel (2Q12)
Wed 14 Nov: STX OSV (3Q12)

Ex-dividend dates:
Tue 6 Nov: Olam ($0.05)
Fri 7 Dec: SPH ($0.17)