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Breakfast News Friday, 12 Sep 2008
Indices (Closed as at 11 Sep 08 )
Indices FTSE-STI KLSE Hang Seng Nikkei DJIA Nasdaq Close 2,541.15 1,041.07 19,388.72 12,102.50 11,433.71 2,258.22 Chge % Chge -81.26 -3.1 -21.63 -2.0 -611.06 -3.1 -244.13 -2.0 164.79 1.5 29.52 1.3

Market Commentary
Singapore market – Sentiments likely to improve • Singapore: Singapore market fell for a third day and broke a new 23month low. Market opened down on disappointment over the US Lehman Brothers’ 3Q FY08 results and its restructuring plans. The market continued to fall all the way to its new 23-month low as investors began to worry about the outlook of the global economy as overseas market falls. The benchmark STI dropped 81.26 points or 3.1% to close at 2,541.15. Sold down was broad base with all FTSE sector indices in the red for a third day. Losers led gainers 345 to 150. However, no panic sell pressure was felt. Turnover was moderate with 1.11 billion shares worth S$1.53 billion transacted. Wall Street: Wall Street rose for a second day on selective buying into financial stocks and lower oil prices. A day after a widespread sold down on financial sectors after a disappointing Lehman Brothers’ restructuring plans, investors began to pickup stocks of stronger financial institutions. Transport sectors were chased after as oil prices continue to trend downwards. Dow rose 164.79 points or 1.5% to close at 11,433.71 points while the tech-heavy Nasdaq increased 29.52 points or 1.3% to close at 2,258.22. Light sweet crude dropped US$1.71 to close NYMEX at US$100.87. Outlook: A second day of rise in the US could boost market sentiments, after being sold down for three-day 6% fall. However, investors are likely to stay away from the market ahead of the weekend and before the release of the US retail sales number tonight. While the health of the US financial sectors continue to affect market sentiment, concerns over the global and local economies are becoming more significant. This can be shown from past month performance in Singapore and Hong Kong market relative to the Dow (see Chart below). The Dow (INDU:IND) dropped less than 3% over the past one month while Hang Seng (HSI:IND) and STI (STI:IND) fell about 10% during the same period. This was due to concerns over the China economy as well as the Singapore economy. In fact, the Singapore market started to fall last Thursday, when the Monetary Authority of Singapore said that economist surveyed had lower Singapore GDP forecast from 5.5% to 4.2%. Unless we see some improvement in the Singapore economic releases, we are not likely to see significant recovery in the stock market. We still hold on to our view that the Singapore economy remains healthy. The current weakness in the economy was due mainly to the Biomedical Manufacturing sub-sector, which is itself volatile in nature. Given that this sub-sector was weak for the past four months to July, we expect it to turnaround towards the end of the year.

IPO Launches
Company Offer Price Offer Debut Closes Day

Results announcements
Company China Flexible Packaging Hldgs Ltd Date of Release 3Q08 13/09

MICA (P) 214/09/2007




Westcomb Securities Pte Ltd

Breakfast News

Source: Bloomberg

Company Highlights
Midas Holdings Ltd - To supply 66 train cars for Incheon Intl Airport Railroad Project worth €2.35m • Midas Holdings Limited (“Midas”), a leading manufacturer of aluminium alloy extrusion products and PE pipes, primarily for the transportation and infrastructure sectors in the PRC, announced that its Aluminium Alloy Division, Jilin Midas Aluminium Industries Co., Ltd (“Jilin Midas”), has successfully secured a contract worth €2.35 million (approximately S$4.73 million) to supply aluminium alloy extrusion profiles for 66 train cars for Incheon International Airport Railroad Project in South Korea. Awarded by Hyundai Rotem Company, this contract marks Midas’ first foray into the South Korean market, and yet another milestone in the Group’s international market expansion efforts. The contract is expected to be fulfilled in 2009, and is, therefore, expected to contribute positively to the Group’s financials for FY09.


C&O Pharmaceutical Technology (Holdings) Ltd - Streamlines operations with disposal of non-exclusive product distribution unit • C & O Pharmaceutical Technology (Holdings) Ltd, an established and integrated pharmaceutical group in China, announced that its whollyowned subsidiary, Shenzhen Liancheng Medicine Company Limited (“Lian Cheng”), had entered into an agreement to dispose its 70% equity interest and its shareholder loan in Cang Nan Province Hong Tai Pharmaceutical Company Limited (“Hong Tai”) to the remaining shareholder of Hong Tai at a consideration of RMB2,424,450 and RMB7,670,000 respectively, resulting in a gain of approximately HK2,500,000 which will be recorded in 1Q09 results. The divestment of Hong Tai is not expected to have any material impact on the EPS and NTA per share of the Group. Prior to C&O’s acquisition of Lian Cheng in July 2006, Hong Tai was already a subsidiary of Lian Cheng, mainly engaged in the distribution of non-exclusive pharmaceutical products and medical apparatus in Cang Nan and the nearby region in Zhejiang Province.



Westcomb Securities Pte Ltd •

Breakfast News The disposal of Hong Tai is in line with the Group’s strategy to focus on higher-margin exclusive and own-branded products, which will streamline the Group’s structure and enhance cost efficiency.


Westcomb Securities Pte Ltd

Breakfast News

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Goh Mou Lih Head of Research Westcomb Securities Pte Ltd (Reg. No. 200300646M) A member of Singapore Exchange Securities Trading Limited 5 Shenton Way #09-08; UIC Building Singapore 068808 Tel : 65- 6319 4988, Fax : 65-6220 489