Warrants Highlight

Singapore escapes recession

Macquarie’s Straits Times Index warrants

Singapore’s GDP grew 1.1% year on year for the last quarter of 2012, the Ministry of Trade and Industry said yesterday. On a quarter to quarter basis, the country’s economy grew by an adjusted annualized 1.8%.

The manufacturing and construction industry shrank by 10.8% and 8.9% respectively, compared to the previous quarter. However, the manufacturing industry contracted 0.2% for the year of 2012 while the construction industry expanded 8.8%. The services industry grew 1.2% for the year.

Singapore misses growth target
Before the GDP results were released, Prime Minister Lee Hsien Loong’s said in his New Year message that “growth was slower this year, at 1.2%” and he attributed it to the weak global economies. The expansion for the year was below the government’s target of 1.5% - 2.5% previously. Some analysts from the Bloomberg survey were bearish, expecting a contraction in the last quarter. Had they gotten it right, Singapore would have entered a technical recession- characterised by two consecutive quarters of negative economic growth.

Going forward, PM Lee estimates growth to be at 1% - 3% next year since he expects global demand to remain weak.

Property prices make new highs
In the property sector, Singapore’s home prices climbed to a record high in the fourth quarter despite the government’s cooling measures. Yesterday, the Urban Redevelopment Authority announced that preliminary results show that private residential property price index rose 1.8% in the last quarter, following a 0.6% increase in the previous quarter. For the year, prices climbed 2.8% compared to a 5.9% gain in 2011.

CEO of PropNex Realty said that “private property prices saw a rebound with the price increase in the fourth quarter contributing to more than 50% of the entire year.” He expects that the trend will continue and estimates that there will be “an overall 4% to 5% growth in the private property price index in 2013”.

Singapore Market Wrap

Starting the year with a bang

The STI rose 1.1% to 3,201.7 on Wednesday, setting a positive tone to the start of 2013. It was encouraged by news that Singapore's GDP rose by roughly 1.1% year-on-year for 4Q 2012. In addition, the market's mood was also buoyed by US Congress' last-minute deal to prevent the "fiscal cliff" calamity.

Call STI 3250MBeCW130430 (R5XW) exercise level 3,250.*
Put STI 3100MBePW130430 (R5WW) exercise level 3,100.*

GLP announces new lease
Global Logistic Properties Limited (GLP) announced on Wednesday it's first direct lease to Tesco, one of the largest supermarket chains in the world. Located at GLP Park Jiashan, Zhejiang Province in Eastern China, the lease is roughly 10,400 square metres in size. GLP slipped 0.4% to $2.77 day-on-day.

Call GLP MB eCW130603 (Q8UW) exercise price $2.90.*

URA releases flash estimate of price index
The URA had announced the release of flash estimate for the price index of private residential property for 4Q 2012. Results show that the index rose 1.8% from 208.2 to 211.9 points quarter-on-quarter. Capitaland climbed 1.6% to $3.76 for the trading session.

Call CapitalaMBeCW130704 (R5YW) exercise price $4.00.*
Put CapitalaMBePW130903 (R5TW) exercise price $3.50.*

Overnight Market Wrap

S&P's biggest rally in a year

On the first trading day of 2013, the S&P index surged 2.5% after the US managed to avert the fiscal cliff at the eleventh hour.

The December's ISM manufacturing for the US climbed above the 50 dividing line, which differentiates expansion from contraction. The final reading beat estimates at 50.7, up from November's 49.5.

Eurozone manufacturing output unexpectedly contracted in December, adding to signs that a recession might extend while its leaders fight the debt crisis. The gauge fell to 46.1 when economists estimated 46.3. Despite the lousy figures, the EuroStoxx 600 jumped 2.0%

Overnight Markets

Indices	Last	Change
STI	3201.74	1.1%
HSI	23312.00	2.9%
DJIA	13412.50	2.4%
S&P 500	1462.42	2.5%
Nasdaq	3050.39	-
China A50	8329.00	2.1%

Corporate News

Corporate Announcements

GLP announced that it has leased roughly 10,400 square metres to Tesco, one of the largest supermarket chains in the world.

Earnings release dates:
Tues 22 Jan: SGX (2Q13)