Phillip Securities Research Pte Ltd 28 December 2011 Singaporeresearch.cyberquote.com.hk/page/htm/kc/share_companyrpt/support… · growth is slowing. Concerns remain for a hard landing

(MICA (P) 081/12/2011) Ref No: RM2011_0255

Phillip Securities Research Pte Ltd 28 December 2011

Singapore The STI added 0.11% to 2673.6 in light trading, Euro Stoxx 50 dropped less than

a point while the S&P500 added 0.1% to 1265.4. More interestingly the Shanghai Composite continued its relentless 3yr decline

and is about to challenge its 3yr low, valuations are lower than the Lehman crisis. The index sells on every piece of negative news it can find and the latest is profit growth is slowing. Concerns remain for a hard landing on real estate prices and export slowdown. On the plus side, income growth is still high, the consumer underlevered, and govt fiscal position aided by record revenues. We put hard landing odds at 50-50. Time for a tax cut and RRR we think.

Italian 10yr yield is poking its head around the 7% level again. Libor-OIS and Euribor-OIS are still creeping up every week. Despite the lack of European headlines to roil markets, this crisis is still not over.

Recent spat of good US data is likely to put some momentum behind the rally for the S&P500 (which we think is short term), but the STI's relative under-performance could continue due to Singapore's slowing growth outlook; so we remain bears on the larger trend for the STI and S&P500 unless (1) the Eurozone process for fiscal integration actually addresses its suboptimal growth path, and (2) econ indicators globally corroborate a turnaround.

Close +/- % +/-FSSTI 2673.62 -2.85 -0.11P/E (x) 6.53P/Bv (x) 1.28

4.10Dividend Yield

STRAITS TIMES INDEX

2300

2500

2700

2900

3100

3300

3500

12/28 3/28 6/28 9/28 12/28

Source: Bloomberg

Hong Kong Local stocks gained slightly on Friday, the holiday eve, investors stand on

sideline. The HSI and HSCEI gained 250.94 points and 188.04 points to 18629.17and 10132.66 respectively. Market volume was 28.089 billion.

Investors are not willing to hold positions during the Christmas holidays, preferring to stand on sidelines. Consequently, trading volume dropped to 28.089 billion, which is a recorded low since December of 2008.

Technically, as we expect the benchmark index to consolidate over the 20 SMA (18532), but the any rebound may be restricted by the 50 SMA (18781). Without good news from Europe, we do not expect to trade above 50 SMA. Thus, investors are recommended to stay on the sidelines, as there is no clear rebounding signal.

We peg resistance for the HSI at 18650 and support at 18000. Close +/- % +/-

HSI INDEX 18629.17 250.94 1.37P/E (x) 8.44P/Bv (x) 1.34

3.67Dividend Yield

HANG SENG INDEX

15000

17000

19000

21000

23000

25000

12/28 3/28 6/28 9/28 12/28

Source: Bloomberg

Regional Market Focus 28 December 2011

2

Thailand Thai stocks moved in a tight range, but traded to the downside for most of the

session, in line with regional markets in the absence of fresh triggers. Trading volume remained thin as several stock markets were still closed for Christmas holidays.

The bigger picture remains weak for the Thai stock market after trading volume dried up. Even though we expect more buying today after several stock markets open following Christmas holidays, it seems to us that there is still a lack of fresh triggers for the market while Europe’s debt crisis also remains worrisome. Overall we expect the Thai stock market to continue its sideways/down action today. However we believe optimism about LTF/RMF buying to take advantage of tax benefits towards the end of the year should help temper the downside. Support on the main index today is seen at 1024, 1018.

Selective trading still makes sense for the Thai stock market for the meantime but investors should continue to look to sell into strength.

Resistance on the main index is pegged at 1032-1036 and support at 1024, 1018 today.

Close +/- % +/-SET INDEX 1028.38 -4.13 -0.40P/E (x) 12.61P/Bv (x) 1.94

3.56Dividend Yield

STOCK EXCH OF THAI INDEX

800

900

1000

1100

1200

12/28 3/28 6/28 9/28 12/28

Source: Bloomberg

Indonesia The JCI started in negative territory on Tuesday after the Christmas holiday.

However, the composite index slowly rebounded towards its intraday high in the second session. The JCI ended at 3,789.425, down by 7.726 points or 0.20% after making an intra-day low of 3,757.531 and intra-day high of 3,806.185.

The downward move was mainly led by Consumer Goods sector (-1.14%), followed by Finance sector (-0.73%), and Construction sector (-0.36%). The breadth of the market was negative with 126 shares declining as compared to 93 that advanced and 84 shares unchanged. The total turnover on regular market was recorded at only IDR 1.16 trillion (USD 127.96 billion).

Today we estimate the JCI would move in a narrow range. We are looking at the support and resistance for the composite index at 3,710 and 3,810 respectively. Close +/- % +/-

JCI Index 3789.43 -7.73 -0.20P/E (x) 16.69P/Bv (x) 2.80

2.12Dividend Yield

JAKARTA COMPOSITE INDEX

30003200340036003800400042004400

12/28 3/28 6/28 9/28 12/28

Source: Bloomberg

Sri Lanka The market opened for trading continuing the previous day’s closing momentum

and continued to be fluctuated throughout the day progressing on an up-trend. Though the market trading concluded for the day recording positive closures on both indices surpassing 6,000 points, trading activities were gloomy to generate a deprived turnover level excluding the off-market deals took place with Commercial Bank of Ceylon PLC. The All Share Price Index (ASPI) recorded a gain of 32.51 points to close the day at 6,015.09. The more liquid Milanka Price Index (MPI) gained 36.25 points to close the day at 5,226.11. The market capitalization was LKR 2.19Tn.

194 counters traded during the day to record a turnover of LKR 995.8Mn which is a reduction of 13.4% compared to the previous trading day. The day recorded a total of 4,708 trades which resulted in 16.3Mn shares changing hands. The price gainers outnumbered the price losers by 83:61. The foreign transactions recorded a net outflow of LKR 788Mn.

Close +/- % +/-CSEALL Index 6015.09 32.51 0.54P/E (x) 13.09P/Bv (x) 2.18

1.93Dividend Yield

SRI LANKA COLOMBO ALL SH

5500

6000

6500

7000

7500

8000

12/28 3/28 6/28 9/28 12/28

Source: Bloomberg

Regional Market Focus 28 December 2011

3

Hong Kong Fortune REIT <778.HK>— An investment “Safe haven”? Recommendation: Hold Previous close: HKD$3.74 Fair value: HKD$3.77 In 3Q1011, total revenue came in at HK$232.2 million, 12.9% higher y/y. The higher revenue was mainly attributed by the improvement

in rental rates across the entire portfolio. In addition, the renovation at Fortune City One Plus further fueled the revenue growth of Fortune REIT. Income available for distribution was HK$112.3 million, increased 16.7% y/y.

Portfolio occupancy rate and passing rent were 93.5% and HK$31.8 psf respectively. The decrease in occupancy rate was mainly due to the commencement of asset enhancement initiatives at Fortune City One and Ma On Shan Plaza. The effective interest cost and gearing ratio of Fortune REIT came in 3.96% and 20.1% respectively.

In 2011, the world economy is overshadowing by the European debt crisis and the fears of double dip recession of the US economy. All major indexes in the world recorded a substantial decline. Investors are searching for a “safe haven” for investment and the US government bonds experienced a major price hike. The 10-years US Treasury and the 10-years Hong Kong government bond are currently trading at a yield of 2.01% and 1.471% respectively. We believed the financial turmoil will drag on in 2012. REITS, with its simplified business nature, specific legal structure and dividend policy, would be a decent choice of “safe haven” in 2012.

We believe Fortune REIT is current fairly valued. We estimated the 12 month target price of Fortune REIT to be HK$3.77 with a “HOLD” rating, which implied an 0.8% upside potential.

Thailand Maybank Kim Eng Securities (Thailand) – Company Preview Recommendation: HOLD Previous close: Bt14.90 Fair value: Bt15 Trading volume on the SET & MAI has slid in the final quarter of 2011 amid concerns over the severe flooding crisis in Thailand and

Europe’s debt problems. In 4QTD, daily turnover on the Thai bourse averaged Bt24,317.12b. With up to 70% of revenue coming from brokerage fees, we forecast MBKET to see its 4Q11 earnings drop 48.81% YoY and 28.00%

QoQ to Bt123.93m. We expect the broker’s net profit for the whole of 2011 will be 16.68% lower than 2010 to Bt671.25m. With high dividend payout ratio, we

forecast the broker to pay a 2H11 dividend of Bt0.77/share, representing a yield of 5.2%. We maintain a ‘HOLD’ rating on MBKET with a 2012 price target of Bt15.00/share based on a P/BV multiple of 1.90x. Bangkok Chain Hospital – Company Update Recommendation: BUY Previous close: Bt6.80 Fair value: Bt8.30 To reflect the impact of the severe flooding, which dragged revenues of Kasemrad hospitals in Rattanathibeth and Bangkae lower in Nov

2011, we revise downwards our 4Q11 profit outlook for KH to Bt143.16m. We also cut our full-year 2011 net profit forecast for KH to Bt655.38m to factor in the impact of the flooding in 4Q11. However we expect

its net profit to rise to Bt755.97m on the back of an increase in per-head capitation under social security scheme and a likely pickup in cash patient volume.

We reiterate a ‘BUY’ rating on KH with a 2012 price target of Bt8.30/share.

Regional Market Focus 28 December 2011

4

Market News US Confidence among US consumers rose in December to the highest level in eight months as an improving job market helped regain all

the ground lost following the mid-year government budget battle and credit rating downgrade. The Conference Board's index increased to 64.5, exceeding all estimates in a Bloomberg News survey and the highest since April, from a revised 55.2 reading in November, figures from the private research group showed yesterday. The measure averaged 53.7 during the recession that ended in June 2009, and averaged 98 during the economic expansion that ended in December 2007. (Source: BT Online)

The US government received record demand for its bonds in 2011, pushing longer-maturity Treasuries to their best performance since 1995 in a sign that President Barack Obama may have little difficulty financing a fourth consecutive year of US$1 trillion budget deficits. The Treasury Department attracted US$3.04 for each dollar of the US$2.135 trillion in notes and bonds sold, the most since the government began releasing the data in 1992 during the George Bush administration. The US drew an all-time high bid-to-cover ratio of US$9.07 for US$30 billion of four-week bills it auctioned on Dec 20, even though they pay zero per cent interest. (Source: BT Online)

US home prices fell in October for the second straight month despite record-low home loan borrowing rates, a key index of the industry showed Tuesday. Prices across 20 leading metropolitan areas fell on average by 0.6 per cent from September, and were 3.4 per cent lower than a year earlier, according to the S&P/Case-Shiller 20-City Composite index. (Source: BT Online)

The US Treasury on Tuesday criticised Japan's interventions to halt the yen's rise in the last six months, saying they were unnecessary and that Tokyo would do better to strengthen its domestic economy and competitiveness. In a report to Congress on foreign exchange markets, the Treasury said it had supported the interventions to stabilise the yen in the wake of the devastating March 11 earthquake-tsunami disaster. But interventions that began in August and went through November, aimed at halting the yen's rise amid economic turmoil in Europe and the United States, were unjustified, the Treasury said. (Source: BT Online)

Singapore A Higher than expected proportion of properties sold at auctions this quarter reflects a stabilisation in the market, according to a report

from property firm Jones Lang LaSalle (JLL). The auctions market achieved a sales rate of 10 per cent in Q4 2011, with seven transactions out of the 71 properties listed, compared with the 6 per cent sales rate recorded in Q3 2011. (Source: BT Online)

R&D spending from both the public and private sectors rose last year, data from the Agency for Science, Technology and Research (A*Star) showed. Public spending hit S$2.54 billion in 2010, up from 2009's S$2.32 billion. Business research spending also grew 6 per cent to hit S$3.95 billion. As a result, gross expenditure on R&D rose to S$6.5 billion from S$6 billion, said A*Star in its annual national survey of the sector. The country has also increased its pool of researchers. The total number of scientists and engineers here grew 6.4 per cent to 28,296. Slightly over half of these were hired by the public sector. (Source: BT Online)

Greater China Region China Cosco Holdings Co. (1919), Asia’s largest shipping line, Evergreen Line and three others will form a partnership for Asia-Europe

trade, as carriers join hands to counter a slump in cargo rates and overcapacity. The five shipping lines will provide 12 weekly services to Europe and to the Mediterranean on vessels that can each carry as many as 13,000 20-foot containers, Hanjin Shipping Co. (117930), one of the partners in the tie-up, said in an e-mailed statement today. The pact will be effective from the second quarter of next year. The cooperation follows an alliance formed last week by Neptune Orient Lines Ltd., Hapag-Lloyd AG and four others for the world’s busiest trade lane that has been unprofitable because of overcapacity. Container shipping rates may rise next year as owners join hands to overcome the collapse in fees amid slowing trade growth, according to RS Platou Markets AS. (Source: Bloomberg)

Chinese industrial companies’ profits growth cooled, adding to evidence the government may need to ease policy to protect the nation’s economic expansion. Net income increased 24.4 percent in the first 11 months of 2011 from a year earlier to 4.66 trillion yuan ($737 billion), the National Bureau of Statistics said on its website today. The pace compared with 25.3 percent gain in the first 10 months and a 27 percent rise in the first three quarters. A lingering Europe debt crisis and a cooling domestic property market are dimming growth prospects for the world’s second-largest economy. More Chinese bankers are forecasting a further loosening in monetary policy as the expansion cools and households’ inflation expectations are easing, surveys by the central bank showed on Dec. 22. (Source: Bloomberg)

Japan and China will promote direct trading of the yen and yuan without using dollars and will encourage the development of a market for companies involved in the exchanges, the Japanese government said. Japan will also apply to buy Chinese bonds next year, allowing the investment of renminbi that leaves China during the transactions, the Japanese government said in a statement after a meeting between Prime Minister Yoshihiko Noda and Chinese Premier Wen Jiabao in Beijing yesterday. Encouraging direct yen- yuan settlement should reduce currency risks and trading costs, the Japanese and Chinese governments said. China is Japan’s biggest trading partner with 26.5 trillion yen ($340 billion) in two-way transactions last year, from 9.2 trillion yen a decade earlier. The pacts between the world’s second- and third-largest economies mirror attempts by fund managers to diversify as the two-year-old European debt crisis keeps global financial markets volatile. (Source: Bloomberg)

Thailand The Thai cabinet on Tue approved an extension of excise tax cut for diesel for another month to Jan 31, 2012 and further extension will

later be subject to review on a monthly basis. (Source: Post Today) The Thai cabinet on Tue also approved in principle a proposal to (i) raise Bt350b for a fund for long-term water management

infrastructure and (ii) set up a Bt50b insurance fund to ensure insurance payouts when the country faces catastrophic natural disasters because some local insurance firms have no reinsurance with overseas companies. (Source: Bangkok Post)

Foreign investors turned net buyers of Thai shares worth Bt143.93m on Tue. (Source: Bisnews)

Regional Market Focus 28 December 2011

5

The Securities Analyst Association (SAA) cut end-2011 target for the SET index to 1,046 points from 1,197 points and it also set end-2012 target for the SET index at 1,186 points. (Source: Krungthep Turakij)

Social Security Office joined hands with four commercial banks: Islamic Bank of Thailand, LHBANK, KTB and KK to offer loans of up to Bt10b which carry a fixed interest rate of 3% for three years to flood-hit employers. (Source: Post Today)

Indonesia The government of Indonesia says the annual economic growth target of 6.5 percent will be met. The Ministry of National Development

Planning, estimates the economic growth will also improve in terms of quality as the number of workers in the formal sector has increased this year, rising to 37 percent from 30 percent recorded last year. The processing industry will be the sector that will increase our middle-class population next year. Based on data from the Central Statistics Agency (BPS), the total unemployment in Indonesia rate as of August 2011 equaled to 6.56 percent, down from 6.81 percent recorded in February 2011 and 7.14 percent year-on-year. The number of Indonesians working in the industry sector between February and August 2011 totaled 840 thousand people (6.13 percent from the total workforce), compared to 750 thousand (13.42 percent) working in the construction sector, 3.1 million (7.42 percent) in the agriculture sector, 500 thousand (8.96 percent) in the transportation, warehouse and communications sector, and 370 thousand (2.17 percent) working in the public service sector. Ministry of National Development Planning added that the government has also set technical targets to achieve the 6.7 percent annual target next year. They are 5.2 percent consumption rate growth, 6.8 percent growth for government spending, 11.5 percent growth for total investments, 10.2 percent growth for export and 12 percent growth for import. (Source: Indonesia Finance Today)

Indonesia claims it will intensify its efforts to make China agree to exchange import and export data this January 2012. Deputy for Industry and Trade of the Coordinating Ministry for the Economy, said the Indonesian government also demands scheduled meetings up to three times next year. Reiterates the importance for Indonesia and China to exchange import and export data not later than late January 2012 because the trade threshold balance between China and Indonesia will be impossible to determine, considering China demands the data to be synchronized first. Indonesia will also discuss trans-shipment in more detail as it has been hurting Indonesia financially. The two countries are also scheduled to discuss the global economic sluggishness which is estimated to continue throughout 2012. According to the Central Statistics Agency (BPS) data, in January-October 2011, Indonesia is suffering from a USD 3.57 billion trade deficit with China as export is reaching USD 17.14 billion while import attains USD 20.71 billion. (Source: Indonesia Finance Today)

Sri Lanka Sri Lanka Forex Reserves Down 15-Pct in October. Sri Lanka's forex reserves fell 14.8 percent off a high reached in July to 6,896 million

US dollars by October 2011, as the island's soft-dollar peg continued to be pressured. Sri Lanka's official reserves rose to 8,099 million US dollars by end-July 2011 but have since fallen 1,203 million US dollars largely due to defence of a dollar peg and state foreign loan settlements. The central bank said it had earlier collected foreign reserves by buying dollars and preventing the rupee from going up. Further the Central bank said that a part of such reserves have now been utilized to deal with any pressure on the exchange rate due to increased demand for imports arising mainly from petroleum and investment goods. (LBO)

Sri Lanka Islet Eyed By India Firm. Delta Corporation, an India based firm, is in talks with Sri Lanka for 75 million dollar tourism development in an islet off the northwestern coast of the island. The project has been proposed for the islet of Iramuthiv, off the coast of Kalpitiya where 10 islets have been offered to investors by the country's tourism development authority. About 60 acres of Iramuthivu islet, which is spread over 100 acres, will be used for the leisure project. A Canada based firm is also in talks for a 300 million dollar project in another islet. Sri Lanka has seen a steep rise in tourist arrivals after the end of a war, resulting in a tourism boom. Officials have said that 185 project proposals worth 1.85 billion US dollars have been received by a 'one-stop' office for approval. (LBO)

Sri Lanka Invites Bids for Fuel Terminal at Second International Airport. Sri Lanka's state-run Ceylon Petroleum Corporation (CPC) has invited bids to build an aviation fuel terminal at the second international airport being constructed in Mattala, in the Hambantota district of the Southern Province, the government announced today. The government is seeking bids from turnkey contractors who have experience in projects at international airports and have revenues of US$ 20 million in the past five years for the "design, procurement, construction, testing and commissioning works" for the aviation fuel terminal to be constructed at the Hambantota International Airport at Mattala. Under the 'Aviation Fuel Storage Facility and Hydrant System Project' the terminal is expected to be built in a year time. The expected cost for the terminal is around 3.6 billion rupees (US$31 million). (ColomboPage)

Regional Market Focus 28 December 2011

6

Dollar Index 79.84 -0.00%

70

75

80

85

12/2

8/10

1/28

/11

2/28

/11

3/28

/11

4/28

/11

5/28

/11

6/28

/11

7/28

/11

8/28

/11

9/28

/11

10/2

8/11

11/2

8/11

Source: Bloomberg

Gold 1593.23 -0.16%

1200

1400

1600

1800

2000

12/2

8/10

1/28

/11

2/28

/11

3/28

/11

4/28

/11

5/28

/11

6/28

/11

7/28

/11

8/28

/11

9/28

/11

10/2

8/11

11/2

8/11

12/2

8/11

Source: Bloomberg

Crude oil 101.34 +1.72%

70

80

90

100

110

120

12/2

8/10

1/28

/11

2/28

/11

3/28

/11

4/28

/11

5/28

/11

6/28

/11

7/28

/11

8/28

/11

9/28

/11

10/2

8/11

11/2

8/11

Source: Bloomberg

US Treasury 10yr Yield 2.0052 -0.95%

1.5

2

2.5

3

3.5

4

12/2

8/10

1/28

/11

2/28

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3/28

/11

4/28

/11

5/28

/11

6/28

/11

7/28

/11

8/28

/11

9/28

/11

10/2

8/11

11/2

8/11

Source: Bloomberg

DJI 12291.35 -0.02%

1000010500

1100011500

1200012500

13000

12/2

8/10

1/28

/11

2/28

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3/28

/11

4/28

/11

5/28

/11

6/28

/11

7/28

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8/28

/11

9/28

/11

10/2

8/11

11/2

8/11

Source: Bloomberg

S&P 500 INDEX 1265.43 +0.01%

10501100115012001250130013501400

12/2

8/10

1/28

/11

2/28

/11

3/28

/11

4/28

/11

5/28

/11

6/28

/11

7/28

/11

8/28

/11

9/28

/11

10/2

8/11

11/2

8/11

Source: Bloomberg

SHCOMP 2166.21 -1.09%

2300

2550

2800

3050

3300

12/2

8/10

1/28

/11

2/28

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3/28

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4/28

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5/28

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6/28

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7/28

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8/28

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9/28

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10/2

8/11

11/2

8/11

Source: Bloomberg

Regional Market Focus 28 December 2011

7

Major World Indices Indices % Chg Chg Last Indices % Chg Chg Last TEL AVIV 100 INDEX -0.02 -0.18 1004.78 ALL ORDINARIES INDX -0.21 -8.70 4183.40 HANG SENG INDEX +1.37 +250.94 18629.17 S&P/TSX COMPOSITE INDEX +0.42 +50.19 11926.67 JAKARTA COMPOSITE INDEX -0.20 -7.73 3789.43 FTSE 100 INDEX +1.02 +55.73 5512.70 FTSE Bursa Malaysia KLCI +0.32 +4.76 1500.91 CAC 40 INDEX +0.03 +1.02 3103.11 KOSPI INDEX -0.79 -14.68 1842.02 DAX INDEX +0.18 +10.83 5889.76 NIKKEI 225 -0.46 -38.78 8440.56 DOW JONES INDUS. AVG -0.02 -2.65 12291.35 STOCK EXCH OF THAI INDEX -0.40 -4.13 1028.38 S&P 500 INDEX +0.01 +0.10 1265.43 SHANGHAI SE COMPOSITE -1.09 -23.91 2166.21 NASDAQ COMPOSITE INDEX +0.25 +6.56 2625.20 TAIWAN TAIEX INDEX -0.11 -7.55 7085.03 NYSE Arca Gold BUGS -1.52 -7.80 503.95 BSE SENSEX 30 INDEX -0.61 -96.80 15873.95

SRI LANKA COLOMBO ALL SH +0.54 +32.51 6015.09 Source: Bloomberg Source: Bloomberg

Top Value & Volume Singapore Top 10 Value Last % Chg Chg Value Top 10 Volume Last % Chg Chg Volume KEPPEL CORP LTD 9.50 -0.31 -0.030 13,761,400 GMG GLOBAL LTD 0.11 -0.88 -0.001 33,987,000

NOBLE GROUP LTD 1.17 -2.10 -0.025 13,378,290 NOBLE GROUP LTD 1.17 -2.10 -0.025 11,453,000

GENTING SINGAPOR 1.53 -0.65 -0.010 11,880,450 LIONGOLD CORP

LTD 0.86 +0.59 +0.005 8,156,000

DBS GROUP HLDGS 11.70 +0.52 +0.060 11,569,950 GENTING

SINGAPORE PLC 1.53 -0.65 -0.010 7,781,000

SINGAP TELECOMM 3.12 -0.32 -0.010 9,111,980 GOLDEN AGRI-

RESOURCES LTD 0.72 -0.69 -0.005 7,158,000

UNITED OVERSEAS 15.55 +0.45 +0.070 7,623,050 TIGER AIRWAYS

HOLDINGS LTD 0.64 +4.07 +0.025 4,488,000

OCBC BANK 7.90 +0.13 +0.010 7,499,730 OLAM INTERNATIONAL LTD

2.17 -0.46 -0.010 3,918,000

SEMBCORP MARINE 3.88 -0.26 -0.010 7,304,060 GENTING HONG

KONG LTD 0.27 +1.89 +0.005 3,501,000

OLAM INTERNATION 2.17 -0.46 -0.010 7,139,730

MEWAH INTERNATIONAL INC

0.48 +0.00 +0.000 3,205,000

LIONGOLD CORP LT 0.86 +0.59 +0.005 7,010,990 GLOBAL LOGISTIC

PROPERTIES L 1.75 +1.16 +0.020 3,172,000

Source: Bloomberg Source: Bloomberg

Hong Kong Top 10 Value Last % Chg Chg Value Top 10 Volume Last % Chg Chg Volume CHINA CONST BA-H 5.52 +0.36 +0.02 950,671,700 BANK OF CHINA-H 2.92 +1.74 +0.05 198,589,913 IND & COMM BK-H 4.86 +1.46 +0.07 906,742,100 IND & COMM BK-H 4.86 +1.46 +0.07 186,866,916

YANZHOU COAL-H 16.74 +6.62 +1.04 717,388,800 CHINA CONST BA-H 5.52 +0.36 +0.02 172,098,510

PING AN INSURA-H 51.95 +2.77 +1.40 677,245,800 AGRICULTURAL-H 3.38 +1.81 +0.06 71,293,171

CHINA LIFE INS-H 19.28 +3.54 +0.66 651,481,800 EVERGRANDE REAL 3.36 +4.67 +0.15 57,113,038

CNOOC LTD 13.72 +2.85 +0.38 638,808,400 GCL-POLY ENERGY 2.18 +3.32 +0.07 49,984,999

CHINA MOBILE 74.30 +0.95 +0.70 622,900,200 PETROCHINA CO-H 9.48 +1.17 +0.11 47,939,995

BANK OF CHINA-H 2.92 +1.74 +0.05 576,131,500 CNOOC LTD 13.72 +2.85 +0.38 46,856,728

HSBC HLDGS PLC 59.80 +1.44 +0.85 521,038,300 CHINA PETROLEU-H 8.31 +1.34 +0.11 43,364,758

PETROCHINA CO-H 9.48 +1.17 +0.11 454,313,700 YANZHOU COAL-H 16.74 +6.62 +1.04 43,033,630 Source: Bloomberg Source: Bloomberg

Regional Market Focus 28 December 2011

8

Thailand Top 10 Value Last % Chg Chg Value Top 10 Volume Last % Chg Chg Volume TOTAL ACCESS COM 88.25 +0.57 +0.50 482,768,000 THAI-GERMAN

PRO 0.20 -9.09 -0.02 151,150,600

PTT PCL 318.00 +0.32 +1.00 442,659,000 INTL ENGINEERING 0.02 +0.00 +0.00 143,149,600

KARMARTS PCL 3.84 -4.95 -0.20 338,178,000 SOLARTRON PCL 1.92 +4.92 +0.09 113,183,800 IRPC PCL 4.20 -1.87 -0.08 325,536,000 TMB BANK PCL 1.58 -1.25 -0.02 104,003,200 PTT GLOBAL CHEM 60.75 -0.41 -0.25 317,223,000 KARMARTS PCL 3.84 -4.95 -0.20 86,043,900

BANPU PUB CO LTD 544.00 -0.73 -4.00 537,278,000 THREE SIXTY FIVE 0.62 +0.00 +0.00 80,554,300

INDORAMA VENTURE 29.75 -0.83 -0.25 306,596,000 IRPC PCL 4.20 -1.87 -0.08 77,146,200

BANGKOK BANK PUB 152.50 -1.61 -2.50 293,554,000 JASMINE INTL

PCL 2.08 -0.95 -0.02 73,551,400

KRUNG THAI BANK 14.90 -1.32 -0.20 266,720,000 BTS GROUP HOLDIN 0.68 -1.45 -0.01 67,108,900

SHIN CORP PCL 42.25 -1.17 -0.50 266,103,000 JASMINE TELECOM 1.55 +0.00 +0.00 60,286,500

Source: Bloomberg Source: Bloomberg Indonesia Top 10 Value Last % Chg Chg Value Top 10 Volume Last % Chg Chg Volume BANK RAKYAT INDO 6850.00 0.00 0.00 67,720,880,000 ENERGI MEGA PERS 175.00 1.16 2.00 169,770,500 BUMI RESOURCES 2175.00 1.16 25.00 67,344,900,000 BAKRIE & BROTHER 51.00 0.00 0.00 70,657,000 TAMBANG BATUBARA 17350.00 0.87 150.00 59,515,630,000 LIPPO KARAWACI 660.00 0.00 0.00 70,096,500 ASTRA INTERNATIO 74000.00 0.41 300.00 50,356,970,000 BENAKAT PETROLEU 205.00 2.50 5.00 64,993,500 BANK MANDIRI 6750.00 -0.74 -50.00 49,000,030,000 SENTUL CITY TBK 250.00 2.04 5.00 62,454,500 LIPPO KARAWACI 660.00 0.00 0.00 46,267,140,000 BAKRIELAND DEV 121.00 -0.82 -1.00 47,427,000 BANK NEGARA INDO 3850.00 -1.91 -75.00 39,962,800,000 BUMI RESOURCES 2175.00 1.16 25.00 31,661,500 BANK CENTRAL ASI 8000.00 -0.62 -50.00 34,061,380,000 INTILAND DEVELOP 285.00 7.55 20.00 30,340,500 INDOFOOD SUKSES 4700.00 -0.53 -25.00 33,441,370,000 TRADA MARITIME 970.00 0.00 0.00 28,207,500 AKR CORPORINDO 2950.00 0.00 0.00 29,930,210,000 MEDIA NUSANTARA 1300.00 1.56 20.00 19,585,500 Source: Bloomberg Source: Bloomberg Sri Lanka Top 10 Value Last % Chg Chg Value Top 10 Volume Last % Chg Chg Volume COMMERCIAL BK 100.50 0.40 0.40 795,557,200 COMMERCIAL BK 100.50 0.40 0.40 7,955,200 REGNIS LANKA PLC 383.50 3.12 11.60 23,814,600 ENVIRONMENTAL RE 39.70 0.00 0.00 503,600 ENVIRONMENTAL RE 39.70 0.00 0.00 20,092,730 SMB LEASING - NV 0.80 14.29 0.10 382,500 UNITED MOTORS 142.00 -0.77 -1.10 14,566,000 AMANA TAKAFUL 2.30 4.55 0.10 296,800 SINGER SRI LANKA 132.30 3.76 4.80 13,471,890 SMB LEASING PLC 1.70 0.00 0.00 294,700 COLOMBO LAND & D 52.80 -1.12 -0.60 9,533,180 PAN ASIA BANKING 25.70 1.58 0.40 255,500 HVA FOODS LTD 37.00 -0.27 -0.10 8,760,310 EXPOLANKA HOLDIN 8.70 0.00 0.00 242,200 PAN ASIA BANKING 25.70 1.58 0.40 6,550,210 HVA FOODS LTD 37.00 -0.27 -0.10 234,000 BAIRAHA FARMS 211.20 2.47 5.10 4,829,250 FREE LANKA CAPIT 3.00 0.00 0.00 187,500 CENTRAL FINANCE 202.90 -0.25 -0.50 3,551,400 E-CHANNELLING 7.90 0.00 0.00 183,600 Source: Bloomberg Source: Bloomberg

Regional Market Focus 28 December 2011

9

Commodities & Currencies

Commodities % Chg Chg Last Currencies Price of FX to S$

Price of FX to US$

GOLD SPOT US$ / OZ -0.16 -2.50 1,593.23 AUSTRALIAN DOLLAR 0.7599 1.0157

SILVER SPOT US$ / OZ +0.07 +0.02 28.69 CANADIAN DOLLAR 0.7863 1.0186

WTI Cushing Crude Oil Spot Px +1.72 +1.71 101.34 EURO 0.5906 1.3071

BRITISH POUND 0.4925 1.5671 Source: Bloomberg

US DOLLAR 0.7718 1.0000

Commodities % Chg Chg Last CHINA RENMINBI 4.8800 6.3219

Malaysian Rubber Board Standard -0.57 -6.00 1044.25 HONG KONG DOLLAR 6.0030 7.7772

PALM OIL (RM$/METRIC TON) +1.43 +44.00 3131.50 JAPANESE YEN 60.1100 77.8800

Source: Bloomberg KOREAN WON 894.3691 1158.6700

Index % Chg Chg Last MALAYSIAN RINGGIT 2.4451 3.1677

DOLLAR INDEX SPOT -0.00 -0.00 79.84 THAI BAHT 24.2677 31.4400

Source: Bloomberg Source: Bloomberg

US Treasury Yields Maturity Today Yesterday Last Week Last Month 3 Months 0.00 0.00 0.00 0.00

6 Months 0.03 0.02 0.02 0.05

2 Years 0.29 0.28 0.25 0.27

3 Years 0.43 0.43 0.37 0.40

5 Years 0.96 0.97 0.85 0.93

10 Years 2.00 2.02 1.92 1.96

30 Years 3.03 3.05 2.93 2.92

Yield Spread (10 yrs - 3 mths) 2.00 Yield Spread (10 yrs - 2 yrs) 1.71

Source: Data provided by ValuBond –

Economic Announcement US Singapore Date Statistic For Survey Prior Date Statistic For Survey Prior 12/29/11 Initial Jobless Claims 24-Dec 374K - - 12/29/11 Credit Card Bad Debts NOV - - 15.0M 12/29/11 Continuing Claims 17-Dec 3590K - - 12/29/11 Credit Card Billings NOV - - 3029.7M

12/29/11 Chicago Purchasing Manager DEC 61.0 62.6 12/29/11 Bank Loans & Advances

(YoY) NOV - - 29.8%

12/29/11 Bloomberg Consumer Comfort 25-Dec - - -45.0 12/29/11 M1 Money Supply (YoY) NOV - - 19.2%

12/29/11 Pending Home Sales MoM NOV 1.5% 10.4% 12/29/11 M2 Money Supply (YoY) NOV - - 10.3%

12/29/11 Pending Home Sales YoY NOV - - 7.3% 02-13 JAN GDP (QoQ) 4Q A - - 1.9%

12/30/11 Kansas City Fed Manf. Activity DEC 6 4 02-13 JAN GDP (YoY) 4Q A - - 6.1%

12/30/11 NAPM-Milwaukee DEC 58.5 56.7 1/4/12 Electronics Sector Index DEC - - 50.9

1/3/12 Construction Spending MoM NOV 0.5% 0.8% 1/4/12 Purchasing Managers

Index DEC - - 48.7

1/3/12 ISM Manufacturing DEC 53.2 52.7 1/9/12 Foreign Reserves DEC - - $240.99B 1/3/12 ISM Prices Paid DEC 47.9 45 1/13/12 Retail Sales Ex Auto (YoY) NOV - - 8.6%

1/4/12 Minutes of FOMC Meeting 1/13/12 Retail Sales (MoM) sa NOV - - 6.1%

1/4/12 MBA Mortgage Applications 30-Dec - - - - 1/15/12 Retail Sales (YoY) NOV - - 8.5%

1/4/12 Factory Orders NOV 1.7% -0.4% 1/16/12 Electronic Exports (YoY) DEC - - 0.1%

1/5/12 Total Vehicle Sales DEC 13.50M 13.59M

1/16/12 Non-oil Domestic Exports (YoY) DEC - - 1.6%

Source: Bloomberg Source: Bloomberg

Regional Market Focus 28 December 2011

10

Thailand Hong Kong Date Statistic For Survey Prior Date Statistic For Survey Prior

12/28/11 Total Capacity Utilization ISIC NOV - - 46.4 12/29/11 Imports YoY% NOV - - 10.9%

12/28/11 Mfg. Production Index ISIC (YoY) NOV -39.55 -35.80 12/29/11 Trade Balance NOV - - -23.1B

12/28/11 Mfg. Production Index ISIC (SA) NOV - - 122.09 12/30/11 Money Supply M1 - in

HK$ (YoY) NOV - - -9.80%

12/30/11 Foreign Reserves 23-Dec - - $175.3B 12/30/11 Money Supply M2 - in HK$ (YoY) NOV - - -3.70%

12/30/11 Forward Contracts 23-Dec - - $31.0B 12/30/11 Money Supply M3 - in HK$ (YoY) NOV - - -3.80%

12/30/11 Total Exports YOY% NOV - - -0.1% 12/30/11 Govt Mthly Budget Surp/Def HK$ NOV - - 28.0B

12/30/11 Total Exports in US$ Million NOV - - $17019M 1/3/12 Retail Sales - Value

(YoY) NOV - - 23.10%

12/30/11 Total Imports YOY% NOV - - 20.6% 1/3/12 Retail Sales - Volume (YoY) NOV - - 15.00%

12/30/11 Total Imports in US$ Million NOV - - $16006M 1/5/12 Purchasing Managers

Index DEC - - 48.7

12/30/11 Total Trade Balance NOV - - $1013M 1/9/12 Foreign Currency Reserves DEC - - $282.5B

12/30/11 Current Account Balance (USD) NOV -$739M $39M 1/19/12 Unemployment Rate SA DEC - - 3.40%

12/30/11 Overall Balance in US$ Million NOV - - -$1886M 1/19/12 Composite Interest Rate DEC - - 0.48%

12/30/11 Business Sentiment Index NOV - - 36.7 1/20/12 CPI - Composite Index

(YoY) DEC - - 5.7%

1/4/12 Core CPI (YoY) DEC 2.70% 2.90% 1/26/12 Exports YoY% DEC - - - -

1/4/12 Consumer Price Index NSA (MoM) DEC 0.00% 0.21% 1/26/12 Imports YoY% DEC - - - -

Source: Bloomberg Source: Bloomberg

Indonesia Sri Lanka Date Statistic For Survey Prior Date Statistic For Survey Prior

1/2/12 Total Imports (YoY) NOV - - 29.10% 12/31/11 CPI Moving Average (YoY) DEC 6.7% 6.9%

02-10 JAN Danareksa Consumer Confidence DEC - - 91.4 12/31/11 CPI (YoY) DEC 4.5% 4.7%

03-06 JAN Foreign Reserves DEC - - $111.32B 07-15 JAN Exports YoY% NOV - - -4.9%

03-06 JAN Net Foreign Assets (IDR Tln) DEC - - 985.15T 07-15 JAN Imports YoY% NOV - - 41.4%

09-13 JAN Money Supply - M1 (YoY) NOV - - 19.70% 1/13/12 Repurchase Rate 13-Jan - - 7.0000%

09-13 JAN Money Supply - M2 (YoY) NOV - - 16.00% 1/13/12 Reverse Repo Rate 13-Jan - - 8.5000%

1/12/12 Bank Indonesia Reference Rate 12-Jan - - 6.00%

23-27 JAN Total Local Auto Sales DEC - - 67656

23-27 JAN Total Motorcycle Sales DEC - - 642126

2/1/12 Total Imports (YoY) DEC - - - -

01-15 FEB Annual GDP 2011 - - 6.10%

07-10 FEB Money Supply - M1 (YoY) DEC - - - -

07-10 FEB Money Supply - M2 (YoY) DEC - - - -

2/9/12 Bank Indonesia Reference Rate 9-Feb - - - -

13-17 FEB GDP Constant Price (YoY) 4Q - - 6.52%

Source: Bloomberg Source: Bloomberg

PHILLIP RESEARCH STOCK SELECTION SYSTEMS

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HOLD Trade within ± 15% from the current price

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Phillip Capital – Regional Member Companies

SINGAPORE

Phillip Securities Pte Ltd

Raffles City Tower 250, North Bridge Road #06-00

Singapore 179101 Tel : (65) 6533 6001 Fax : (65) 6535 6631

Website : www.poems.com.sg

MALAYSIA

Phillip Capital Management Sdn Bhd

B-2-6 Megan Avenue II 12 Jln Yap Kwan Seng 50450 Kuala Lumpur Tel : (603) 2166 8099 Fax : (603) 2166 5099

Website : www.poems.com.my

HONG KONG

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11-12/F United Centre 95 Queensway, Hong Kong

Tel : (852) 2277 6600 Fax : (852) 2868 5307

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THAILAND

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15/F, Vorawat Building 849 Silom Road

Bangkok Thailand 10500 Tel : (622) 635 7100 Fax : (622) 635 1616

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JAPAN

The Naruse Securities Co Ltd

4-2, Nihonbashi Kabutocho Chuo Ku, Tokyo Japan 103-0026

Tel : (81) 03-3666-2101 Fax : (81) 03-3664-0141

Website : www.naruse-sec.co.jp

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120 Cannon Street London EC4N 6AS

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