Warrants Highlight

Greek debt progress reduces uncertainty in Europe

Greece gets bailout funds with attached conditions
In Europe, Greece attained another milestone last week when the International Monetary Fund and the European Central Bank reached an agreement on Tuesday to release about 44 billion euros of bailout funds to the country. The funds are split up into two parts, with 34.4 billion euros is to be disbursed by 13th December and the remaining 9.3 billion euros will be released in the first quarter of 2013, provided Greece meets the troika’s conditions.

Greece finance minister, Yannis Stournaras said that the agreement in Brussels “creates conditions to keep them in the eurozone and the opportunity to emerge from the vicious cycle of recession and indebtedness”. However, “the hard part has just begun”.

The Greek government announced a strategy of buying back debt from bondholders at a discount as signaled by its international creditors. The funds for the debt buyback would have to be on top of the 44 billion euros aid. If successful, the debt buyback together with other means of debt relief could help Greece reduce its debt to 124% of GDP as last seen in 2010, from about 175% currently. The details of the buyback are expected to be disclosed this week. (Bloomberg)

OECD cuts its 2013 growth forecast
As we approach the last month of the year, investors are concerned about the outlook of the global economy next year. Last Tuesday, the Organization for Economic Cooperation and Development (OECD) sharply cut its forecast for the world’s economy, warning about the impending need to resolve the debt crisis and the budget deficit in the US so as to avoid a global recession.

Even if the US were to successfully avert the fiscal cliff, the OECD predicts that its 34 members, all of which are developed economies, will expand 1.4% in 2013. If the US fails to reach a compromise in its budget talks then “a large negative shock could bring the US and the global economy into recession,” according to the OECD’s deputy secretary general.

US fiscal cliff talks take front seat
Last week, the US equity markets moved in tandem with the progress of the budget talks while the country reported better-than-expected data which seemed to signal an improvement in the economic situation. Although there was a decline in new home sales, home prices rose the most since July 2010 while consumer sentiments were at its highest since February 2008.

Key Macro Data this week
Mon 3 Dec: US ISM manufacturing, Eur PMI manufacturing, China PMI
Tues 4 Dec: Eur Producer Price Index, Singapore PMI
Wed 5 Dec: US ISM non manufacturing, Eur PMI services, retail sales, HK PMI
Thu 6 Dec: US GDP, Eur rate decision
Fri 7 Dec: US non farm payroll, unemployment rate, consumer confidence

Singapore Market Wrap

STI gained for the second consecutive week

Mixed news and data failed to dampen market sentiment with the STI rising for it's second consecutive week, advancing 2.7% to 3,069.95 week-on-week and 1.0% on a monthly basis. Earlier in the week, data showed that Singapore's industrial output fell in October before MAS released preliminary figures indicating that Singapore's bank lending grew for the same month. In Europe, Italy's jobless rate hit a new high while German retail sales fell more than expected in October, whereas politicians in the US are still in the mist of coming to consensus on how best to address the "Fiscal Cliff" issue.

Call STI 3100MBeCW130228 (RF9W) exercise level 3,100.*
Put STI 2950MBePW130228 (RG0W) exercise level 2,950.*

Olam CEO acquired 1 million company's shares
Olam's CEO Sunny Verghese had bought 1 million shares of Olam at S$1.54 each in an attempt to shore investors' confidence amidst a rough week for the commodities house. Olam is down 4.8% for the week to $1.575, and has declined 9.5% since Muddy Waters' negative statement on the company first broke out.

Call Olam MB eCW130603 (R3LW) exercise price $1.80.*

Singapore Banks loans climbed in October
Singapore banks' loans increased 17.9% year-on-year (y.o.y) to $479.4 billion in October, based on preliminary data released by the MAS on Friday, loans were up 1.5% on a month-on-month basis. Consumer loans climbed 16.3% y.o.y whereas housing and business loans gained 15% and 19.1% respectively. DBS leaped 4.1% to $14.45 while UOB and OCBC gained 3.5% to $18.72 and 3.0% to $9.41 respectively for the week.

Call DBS MB eCW130201 (RE9W) exercise price $15.20.*

Call UOB MB eCW130103 (MW0W) exercise price $19.397.*
Put UOB MB ePW130104 (Q8CW) exercise price $18.00.*

Call OCBC Bk MBeCW130701 (RF8W) exercise price $10.20*

Overnight Market Wrap

A flat close at the end of the week

The S&P closed less than 0.1% up on Friday, with volumes 15% higher than the three-month average. The index closed at 1416.18 for the week.

The markets saw some volatility in the last few minutes of the trading session while changes to the MSCI global indices were implemented. In the two minutes before close, the index reached an intraday high of 1418.86 before erasing the gains to close flat for the day.

Talks to avert the fiscal cliff seems to have reached a "stalemate", mentioned by House Speaker John Boehner while President Barack Obama warned of prolonged talks as both the Republicans and the Democrats "stood their ground with opposing plans".

Overnight Markets

Indices	Last	Change
STI	3069.95	0.8%
HSI	22030.40	0.5%
DJIA	13025.60	0.0%
S&P 500	1416.18	0.0%
Nasdaq	0.00	-
China A50	6956.32	1.0%

Corporate News

Corporate Announcements

Olam has acquired 100% stake of Dehydro Foods in Egypt for US$30.8 million. It has also requested for trading halt.

Singtel's associate company Bharti Infratel Limited has been approved for it's IPO on India's stock exchange.

Ex-dividend dates:
Fri 7 Dec: SPH ($0.17)