110120International Market Daily - FSS

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					                                                                                               International Market Daily                                                                                                                        January 20, 2011

 Equities Index                  Close        %1 Day          %MTD
 SET                          1,034.80           1.00           0.20                                     Rangebound
 SET50                          719.79           1.22          -0.06
 Dow Jones 30                11,825.29          -0.11           2.14      MARKET DIRECTIONS
 S&P 500                      1,281.92          -1.01           1.93
 NASDAQ Comp                  2,725.36          -1.46           2.73      Asian stocks are likely to trade lower under pressure today after weakness in
 FTSE 100                     5,976.70          -1.32           1.30      Wall Street as key technology and banking stocks fell on disappointing US
 Hang Seng                   24,419.62           1.10           6.01      earnings results especially from Goldman Sachs and Wells Fargo. However,
 Nikkei 225                  10,557.10           0.36           2.19      market losses should be limited as bargain hunters buy on dips. Market players
 Shanghai Comp                2,758.10           1.81          -1.78      have also anticipated that China GDP and CPI numbers are likely to be as the
 Weighted Taiwan              9,086.02           1.09           0.94
                                                                          ones leaked by local newspaper yesterday. The euro rose to an 8-week high on
 KOSPI                        2,115.69           0.92           2.92
                                                                          Wednesday on increasing optimism that Europe can defuse its debt crisis while
 Straits Times                3,241.96          -0.23           1.46
                                                                          a rally in commodities faded.
 Kuala Lumpur                 1,566.51          -0.22           3.13
 Jakarta Comp                 3,517.28          -0.88          -5.03
 Philippines Comp             4,039.56          -0.81          -3.84      FACTORS TO WATCH
 S&P ASX 200                  4,834.60          -0.54           1.34      USA:
 VIX Index                       17.31           9.07          -2.48      •   President Barack Obama pressed Chinese President Hu Jintao on Wednesday
 MSCI Indices                    Close        %1 Day           %1 M           to let the value of China's currency rise and delivered a stern message on US
 MSCI AC World                  337.42          -0.46           4.06          concerns over Beijing's human rights record. However, President Hu did not
 MSCI Asia Pac Ex Japan         486.15           0.98           4.47
                                                                              respond. Both leaders spoke glowingly about cooperation but made no major
 MSCI Asia Ex Japan             579.58           0.88           4.95
                                                                              breakthroughs on a range of disputes over trade and security that have
 MSCI EM Asia                   475.99           0.95           4.54
                                                                              strained relations over the past year.
 MSCI Thailand                  413.58           1.08           1.73
 Foreign Fund Flows                                                       •   Wells Fargo Co. (WFC) generated US$5.2bn in pretax income in 4Q10,
 (US Million)                     Last          WTD             YTD           essentially the same as last quarter. An US$850m reserve release, US$200m
 India                          -21.74        -21.74        -719.88           more than in 3Q10, helped 4Q10 results. Pretax preprovision earnings were
 Indonesia                       21.25         11.19        -420.47           US$8.2bn v.s. US$8.6bn in 3Q10.
 Philippines                    -16.62        -29.09         -74.51       •   Goldman Sachs Group posted a 53% drop in profit as trading revenue tumbled.
 Korea                           22.62          3.98       1,282.60
                                                                          •   US housing data showed that 2010 was the second worst year for construction,
 Taiwan                         382.88       645.64        2,365.13
                                                                              where builders broke ground for 587,600 homes, just barely beating the
 Thailand                         4.85        -57.48        -486.12
                                                                              554,000 started in 2009.
 Vietnam                          5.50         11.53          29.00
 Total                          398.74       564.02        1,975.75       Japan:
 Currency Markets            Current       Previous       %change         •   Japanese manufacturing confidence improved in January for the first time in
 Bt/ US$*                       30.54          30.47          -0.23           three months, the Reuters Tankan survey showed, in a sign the economy is
 US$/ Euro                       1.34           1.35          -0.22           likely to start picking up after a small contraction expected in 4Q10.
 Yen/ US$                       82.17          82.02          -0.18       Hongkong/Shanghai:
 Yuan/ US$                       6.59           6.58          -0.03       •   Market players will be watching how the markets react to China's official
 Commodity Price             Current            Prev      %change
                                                                              December CPI and 2010 GDP figures due later today. Data leaked on
 Crude Oil                      90.71          90.86          -0.17
                                                                              Wednesday showed a slowdown in CPI in December, which would reduce the
 GOLD                        1,367.40      1,370.20           -0.20
                                                                              need for aggressive monetary tightening, sending the Shanghai and Hong Kong
 BDI                         1,411.00      1,432.00           -1.47
 ZINC                        2,390.00      2,436.00           -1.89           indexes higher. Hong Kong media reported that consumer prices rose 4.6% in
 CRB index                     333.43        333.78           -0.10           the year to December compared with 5.1% in November and GDP grew 10.3%
Source: Bloomberg     *onshore rate                                           in 2010.
                                                                          •   Sembcorp Marine (SCMN.SI), the world's second largest rig builder, signed a
                                                                              jack-up rig contract worth up to S$182mmillion with a wholly owned unit of
 This report has been prepared by Finansia Syrus Securities Public            Atwood Oceanics.
 Company Limited (FSS). The information herein has been obtained          Malaysia:
 from sources believed to be reliable and accurate; however FSS
 makes no representation as to the accuracy and completeness of           •   Malaysia's financial markets are closed on today for a public holiday. They will
 such information. Information and opinions expressed herein are              re-open on Friday.
 subject to change without notice. FSS has no intention to solicit
 investors to buy or sell any security in this report. In addition, FSS
 does not guarantee returns nor price of the securities described in
 the report nor accept any liability for any loss or damage of any
 kind arising out of the use of such information or opinions in this
 report. Investors should study this report carefully in making
 investment decisions. All rights are reserved. This report may not
 be reproduced, distributed or published by any person in any
 manner for any purpose without permission of FSS. Investment in
 securities has risks. Investors are advised to consider carefully
 before making investment decisions

                                                                                                                       Contact person : Warut Siwasariyanon
                                                                                                                 International Market Dept. Tel: 02-646-9820
                                                                                        January 20, 2011

                             STOCK/SECTOR RECOMMENDATIONS


                             China Citic Bank (998.HK, HK$5.25 – BUY, TP HK$6.12)
                             ICBC’s company visit report: China Citic Bank by Ivan Lin (852) 2683 3212
                             We reiterate our positive view on China Citic Bank subsequent to our company visit
                             last week. We expect the rights issue plan will be implemented in 1Q11, which
                             should act as a positive catalyst for the bank, despite we believe the bank is highly
                             possible to be included as SIFI (systematically important financial Institutions),
                             which could drag down its earnings. NIM progression remains positive in FY11 amid
                             slight correction in Dec 2010; and we expect the bank to strengthen its retail
                             distribution strategies to enrich its deposit-taking abilities. We believe LGFP risks
                             remain manageable and ongoing works are conducted based on new classification
                             requirement, albeit no classification details are given at this stage. Reiterate BUY
                             given attractive valuation on a risk-reward basis, with target price HK$6.12, based
                             on 1.5x FY11F PBR.

                             CPIC (2601.HK, HK$33.20 – Buy, TP HK$38.5)
                             ICBC’s report: China Insurance Sector Update (POSITIVE) “FY10 premium and

                             CPIC update” by Pius Cheng (852) 2683 3215
                             China life insurers achieved strong FY10 yoy life premium growth (13-36% yoy). The
                             negative mom growth of Dec 10 premium is mainly due to the preparation for the
                             new year jumpstart and also the effect of bancassurance sales tightening, we
                             believe. The P&C insurers also achieved strong premium yoy growth in FY10 (29-61%
                             yoy). Although the autosales growth is expected to decline in FY11, we reckon the
                             P&C premium could continue to achieve strong growth of 15-20% yoy in FY11. We
                             raise our target price of CPIC to HK$38.5, representing fair FY11 PEV of 2.2x. We
                             remain positive on its P&C business with
                             strong combined ratio of 95% in FY11 and its life business is well positioned as new
                             bancassurance rules benefit large players and allow CPIC to re-allocate more
                             resource on agency channel development. Reiterate BUY.


                             M1 Ltd (M1 – BUY, TP S$2.79)
                             OCBC’s report: M1 Ltd: Results in line; declares S$0.035 special dividend by
                             Carey      Wong      (65)     6531     9800     e-mail:
                             M1 Ltd posted its 4Q10 results last evening, which came in almost spot on our
                             expectations. Also within our expectation, M1 declared a final dividend of S$0.078
                             per share, versus our S$0.077 forecast; and what came as a pleasant surprise was
                             the special dividend of S$0.035. Both dividends are payable on 26 Apr, subject to
                             shareholders’ approval. Going forward, M1 is guiding for earnings growth in 2011,
                             buoyed by continued customer additions and increasing mobile data usage. It also
                             expects a capex of S$100m and will continue to maintain its 80% payout ratio. In line
                             with its lower capex guidance, we tweak our free cashflow assumptions slightly, and
                             this bumps up our DCF-based fair value estimate from S$2.70 to S$2.79. We continue
                             to like M1 for its defensive earnings and attractive dividend yield, and we maintain
                             our BUY rating

                             CapitaCommercial Trust (CCT – BUY, TP S$1.61)
                             OCBC’s report: CapitaCommercial Trust (CCT): All the right moves; poised to
                             benefit from rental recovery by Ong Kian Lin (65) 6531 9800 e-mail: info@ocbc-
                             CapitaCommercial Trust (CCT) announced 4Q10 DPU of 1.94 S cents. It has so far
                             made all the rights moves and is poised to benefit from rental recovery. In previous
                             reports, we were concerned that CCT’s excess cash on the balance sheet could
                             result in a cash drag, especially in this persistently low interest environment. In
                             light of no further acquisition in sight, we were delighted that CCT had chosen to
                             pare down its debt in 4Q10. We were also impressed that the manager was able to
                             uplift Wikie Edge’s occupancy from 78.4% in 3Q10 to 98.4% in 4Q10. According to our
                             estimates, Grade A office rents will hit S$10.50 psfpm in 2011, more than S$11
                             psfpm in 2012 and above S$12 psfpm in 2013. We thus forecast CCT to continue to
                             experience negative rent reversions in 2011, but this should change in 2012. With its
                             near 100% occupancy and active leasing strategy, CCT is poised to benefit from the
                             rental upside ahead. We thus upgrade CCT’s rating to BUY, with a RNAV-derived fair
                             value of S$1.61 (10.3% total returns).

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