Warrants Highlight

Eight days to Christmas - where's the deal?

Fed announces more monetary stimulus
Last week, the Federal Reserve announced more monetary easing after their Federal Open Monetary Committee meeting. Starting January, the Fed will buy $45 billion a month of Treasury securities to help boost growth, in addition to the $40 billion a month of mortgage-debt purchase which the central bank announced in the third quantitative easing. The central bank said that asset buying will continue until the labor market improves “substantially”.

Macro economic data released last week were good and showed that retail sales and industrial production rebounded in November and jobless claims fell to a nine-week low.

S&P declined for the week on budget talks deadlock
Despite the good data coupled with the Federal Reserve’s plan to expand asset purchases, the S&P fell for the week as budget negotiations dragged and time continues to tick away. Previously, President Barack Obama said that he was hoping a deal would be reached before Christmas.

The S&P declined 0.3%, closing at its low for the week on Friday. More than $600 billion in tax increases and spending cuts are scheduled to take effect in January unless Congress is able to conjure an alternative plan to avoid it. The Federal Reserve chairman, Ben Bernanke warned that monetary stimulus alone will not be able to offset the effects of the fiscal cliff, which threatens to throw the US back into recession.

ECB to assume supervisory role
The eurozone reached a milestone last week when its finance ministers agreed to put the European Central Bank (ECB) in charge of all large euro-area lenders. Financial Services Commissioner Michel Barnier said that about 200 banks will qualify for oversight by the central bank rather than national regulators.

This came after the finance ministers agreed to a 49.1 billion euro payment of aid to Greece after the country completed a buyback of its own debt. (Bloomberg)

Macro data sends Shanghai composite soaring
China stocks rallied after good economic reports were announced. The Shanghai Composite rallied 4.3% last week, the biggest gain in 13 months. The jump follows the previous week’s gain of 4.1%. The December preliminary reading for HSBC’s PMI came in at 50.9 and a final reading for November was at 50.5. This is the first time in 13 months it was above 50. In addition, factory output and retail sales data were better than expected, signs which may show that the second-largest economy is recovering.

Key Macro Data this week
Mon 17 Dec: Eurozone trade balance
Tues 18 Dec: HK unemployment; China Nov property prices
Wed 19 Dec: US Housing starts, building permits
Thu 20 Dec: US GDP, existing home sales; Eurozone consumer confidence; HK CPI
Fri 21 Dec: US consumer confidence

Singapore Market Wrap

Last week saw strong STI made 2012 high

The STI closed up 2.0% week-on-week (w.o.w) to its year-high of 3,168.4, boosted by Friday's positive China's preliminary HSBC Manufacturing PMI data. The December PMI data rose to a 14-month high of 50.9, with a value above 50 signalling expansion. China A50 Index rose 5.6% for the week to 7,757.

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

Call CN8000MBeCW130130 (Q7GW) exercise level 8,000.*
Put CN7000MBePW130130 (Q7HW) exercise level 7,000.*

Government continues housing supply, survey shows property investors still bullish
Singapore's Ministry of National Development had announced on Friday the Government Land Sales Programme for the first half of 2013. The sites are forecast to build 14,000 private homes, inclusive of executive condominiums. In a separate survey by Colliers International Global Investor Sentiment Survey 2012, 79% of respondents picked Asia as their preferred choice of property investment for the next 12 months. Singapore, Tokyo, Hong Kong, Beijing and Shanghai forms the top 5 choices. Capitaland climbed 1.9% w.o.w. to $3.76.

Call CapitalaMBeCW130204 (Q4HW) exercise price $3.40.*
Put CapitalaMBePW130903 (R5TW) exercise price $3.50.*

Biosensors reports the enrolment of its first Patient in LEADERS FREE
Biosensors has enrolled the first patient into LEADERS FREE, a study that involves using BioFreedomTM ,a polymer-free drug-coated stent from the company. The study includes patients at high risk of bleeding, and is constructed to affirm that not only is BioFreedom as safe as a bare-metal stent, it can also bring about anti-restenotic benefit of a drug-eluting stent. Biosensors rose 6.0% to $1.24 for the week.

Call BiosensoMBeCW130603 (Q8DW) exercise price $1.40.*
Put BiosensoMBePW130103 (QZ5W) exercise price $1.10.*

Overnight Market Wrap

Ending the week on its low

On Friday, the US announced industrial production in November which rose the most in two years. Earlier in the day, China announced December's preliminary PMI by HSBC and Markit Economics. The preliminary PMI came in at 50.9, beating estimates.

Though macro data was better than expected, the S&P fell 0.4% to close at 1413.58 for the day. Apple, the world's most valuable company, slumped 3.8% to lead the decline in the technology sector. The technology sector was the worst performer out of the 10 sectors in the S&P and the NASDAQ fell 0.7% for the day.

Overnight Markets

Indices	Last	Change
STI	3168.43	0.4%
HSI	22606.00	0.7%
DJIA	13135.00	-0.3%
S&P 500	1413.58	-0.4%
Nasdaq	2971.33	-0.7%
China A50	7757.38	5.6%

Corporate News

Corporate Announcements

Capitaland announces the sale of its 100% stake in Beijing CapitaLand Xin Ming Real Estate Development Co., Ltd. for a consideration of RMB502 million (around S$97 million).

Biosensors announces first patient enrolled in LEADERS FREE.

Ex-dividend dates:
Mon 24 Dec: Singtel ($0.068)