Regional Market Focusresearch.cyberquote.com.hk/page/htm/kc/share... · bonds advanced as the market digests two ideas: (1) a "banking union" of a central deposit insurance, regulator,

MICA (P) 081/12/2011 Ref No: RM2012_0107 1 of 16

Phillip Securities Research Pte Ltd

Regional Market Focus

5 June 2012

Morning Market Commentary - STI: -1.70% to 2698.9 - MSCI Far East ex-Japan: -2.66% to 428.9 - Euro Stoxx 50: +0.50% to 2078.96 - S&P500: +0.01% to 1278.2 US April factory orders declined 0.6%m-m following previous month's 2.1% decline, the first back to back decline in 3yrs. Consensus expected a 0.3% gain. We've had an out of consensus view of the US since last year, predicated on painfully slow disposable income growth and capex orders peaking out. We expect 1.9% growth this year for the US, and 2013 to be a recession risk year depending on how Congress handles the US$500b worth of fiscal withdrawals scheduled to kick in on 1st Jan 2013. Eurozone’s PPI and PPI ex-energy growth rates have been on a slowing trend for the past 7 months, April's PPI was +0%m-m (+0.5%m-m Mar) and 2.6%y-y (3.5%y-y Mar), and PPI ex-energy was 1.3%y-y (1.6%y-y March). A separate report of Germany’s June Sentix Investor Confidence shows the gauge steps down further to -28.9, worsened from -24.5 in May. The easing PPI, together with the earlier reported slowing down CPI growth of 2.4% in May, suggests an increasing scope for ECB to take benchmark rate even lower on 6th June from the current record-low level at 1%. Spain’s registered number of unemployed workers decreased by 0.63% m-m, as the country’s peak tourism season boosted the hiring rate. Despite the moderate m-m improvement, the number has risen by 12.52% from a year earlier, leaving the nation’s unemployment rate as high as over 24%. According to the Bank of Spain, the total economic output is set to further contract in the second quarter. Australia’s company profit dropped by 4.0% q-q on 1q12 for a second straight quarter, compared to the 6.4% q-q drop in 4q11. Though manufacturing sector received a tiny increase in sales by 0.1%, profit saw a 4th straight quarter drop by 9.8% q-q, worsened from the 3.7% drop in 4q11. Inventory in 1q11 saw a 0.9% q-q growth, compared to 1.4% q-q gain in 4q11, which may result from stagnated sales. On a yearly basis, total company profit dropped by 0.5% y-y last quarter, compared to the 2.1% yearly gain in 4q11. Earnings of retailers and manufacturers have been hurt by a stronger currency. The current benchmark interest rate is at the two-year low of 3.75%, and market is still expecting the RBA governor Glenn Stevens to announce a further cut of 25 bps as he has the scope due to eased inflation. EQUITY MARKETS: We might have a little relief from the selling in Asia today as the S&P500 and Euro Stoxx 50 closed positively, and Italian and Spanish bonds advanced as the market digests two ideas: (1) a "banking union" of a central deposit insurance, regulator, and bailout authority, plus (2) the road to fiscal union - joint liability euro bonds matched by a central fiscal authority. Spain's PM Rajoy backs (1), and he has also indicated that Spain would be willing to let go of some fiscal sovereignty to back (2) fiscal union. France Finance Minister publicly supported (1) as well. For Germany's Merkel, she is vehemently opposed to any joint liability that Germany might bear unless EZ states give up fiscal sovereignty. Thus far its a lot of rhetoric and few in terms of concrete plans. A roadmap with milestones to achieve such a union might calm markets down. As we said in a report last year (29 Nov 2011: Road to Fiscal Union, or else...), fiscal union to match a monetary union is the only long term viable solution to keep the currency together. Amid the bleak outlook, some short term positives still lurk in the background: (1) risk of a Greek exit may have receded as New Democracy leads Syriza in 7 opinion polls (2) China has been posturing heavily for a stimulus program (3) a slowing US economy is raising the odds for QE3/twist2. (Our general guidance in our morning notes and formal reports has been, as we weren't confident that econ/earnings data could outperform to drive markets, some combination of policy safety nets needs to occur in order to reverse consolidation/correction - QE3/Twist2, ECB intervention, further loosening by central banks to err on the side of growth as inflation recedes, a major China fiscal policy announcement. Longer term, we are still giving the heads up that post 6th November 12 USA presidential elections, markets could again be challenging going into 2013 - the US and EZ are under current law obliged to undertake tremendous fiscal tightening) For our larger trend outlook: Global Macro & Markets, 12 Apr. For Singapore Sector Strategy: Sector Strategy, 4 May. Singapore Sector Reports: Banks / Transport / Telcos / Property / REITS / Thematic Regional Strategy: Malaysia, 30 May / China, 24 May / Thailand, 4 May / Indonesia, 29 March Regional Macro: Singapore

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Singapore The STI hit its lowest level for five months taking its lead from Wall Street on

Friday which reacted badly to weak payrolls figures. It ended the day 1.7% down at 2,699 failing to find a floor at 2,700 as it faced too much pressure from recent weak US and Chinese data. Among the biggest casualties were commodity giants Olam (falling 5%) and Golden Agri-Resources (down 4.6%).

The STI is clinging on for dear life to some of the gains it notched up in quarter one and is still about 2% up on the year so far. While these returns beats keeping it in a Singaporean bank account they fail to keep pace with inflation, leaving you worse off in real terms.

Close +/- % +/-

FSSTI 2698.90 -46.81 -1.70P/E (x) 8.78P/Bv (x) 1.22

4.05Dividend Yield

STRAITS TIMES INDEX

2500

2700

2900

3100

3300

6/1 9/1 12/1 3/1 6/1

Source: Bloomberg

Thailand Thai stocks lost ground last Fri due to the same pressure from Europe’s debt

crisis and domestic political worries with the SET index finishing the session at the day’s low of 1115.19 points after a batch of weaker-than-expected economic data out of several countries in Europe as well as China and the US.

External pressure remained relatively high in the face of Europe’s debt crisis, which continued to be a major cause of concern for the market. Economic data out of the US, Europe and China also came out weaker than expected, fueling more concerns about the global economy. Last Fri, the US Labor Department said employers added a paltry 69,000 jobs to their payrolls last month, the weakest in a year. The weak labor market data dragged the Dow industrials down by nearly 275 points last Fri and lower further on Mon. In Thailand, domestic political temperature remained high after the Constitution Court decided to review the constitutionality of the draft charter amendment bill and issued an injunction to suspend the third reading of the bill scheduled for Jun 5 and the House Speaker decided to postpone the deliberation of the controversial draft reconciliation bills. What remains to be seen is how the ruling Puea Thai Party will push ahead with the bills amid opposition from the yellow-shirted People’s Alliance for Democracy. These uncertainties would continue to put pressure on the Thai stock market. In our view, the SET index could be headed for a test of 1100. However, the euro regained ground after the European Commission has been considering the possibility of direct bank re-capitalization by the euro zone’s ESM bailout fund, sending the baht higher to 31.51 per US dollar (0755 hrs Thailand time). Finance chiefs of the Group of Seven leading industrialized powers will also hold emergency talks on the euro debt crisis today.

For short-term strategy, we advise investors to remain on the selling side. Today we peg resistance for the composite SET index at 1123-1130 and support

at 1100-1087.

Close +/- % +/-SET INDEX 1115.19 -26.31 -2.30P/E (x) 14.35P/Bv (x) 1.97

3.86Dividend Yield

STOCK EXCH OF THAI INDEX

800

900

1000

1100

1200

6/1 9/1 12/1 3/1 6/1

Source: Bloomberg

Indonesia The Jakarta composite index tumbled 145.184 points or 3.82% to 3,654.582

Monday (04/06). Nine major sectors fell, led by mining sector which index shed 7.68%, followed by basic industry sector which declined 5.81% and agriculture sector lost 5.31%. LQ 45, the blue-chip stock index, fell 25.711 points or 4.01% to 615.717. The JCI fell as Asian markets slumped Monday, after a weak US jobs report added to a growing list of investor worries about a fragile global economy. As many as 280 shares tumbled, 12 shares advanced, and the remaining 31 shares were unchanged Monday, where 2.99 billion shares worth IDR 3.551 trillion traded on the regular market. Foreign investors accumulated a total net sell worth IDR 231.402 billion.

The composite index would likely trade within the range of 3,740 and 3,840 today.

Close +/- % +/-JCI Index 3654.58 -145.18 -3.82P/E (x) 18.60P/Bv (x) 2.45

2.52Dividend Yield

JAKARTA COMPOSITE INDEX

30003200340036003800400042004400

6/1 9/1 12/1 3/1 6/1

Source: Bloomberg

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Sri Lanka Sri Lanka market is closed for public holiday.

Close +/- % +/-CSEALL Index 4885.18 53.03 1.10P/E (x) 10.27P/Bv (x) 1.57

2.43

Dividend Yield

SRI LANKA COLOMBO ALL SH

4500

5000

55006000

6500

70007500

6/1 9/1 12/1 3/1 6/1

Source: Bloomberg

Australia The S&P/ ASX 200 closed on its lows yesterday, down 78.9 points as overseas

markets dominated the tone of trading for the entire day. The sell off did not subside and accelerated towards the end of the day as investors were not confident to hold long positions overnight. Gold was the only bright spot with most producers showing up for the day.

The SPI is pointing to a 23 point opening after overdoing it towards the close yesterday but all eyes are focused on the RBA rate decision at 2.30pm local eastern standard time. They seem to be in a no win position with an expected 25 point easing thought to be matched by a late belief that they may extend it to 50 points. Some parts of the market have priced the 50 point move in and thus the trading today could be immaterial until the decision is made public. Close +/- % +/-

S&P/ASX 200 INDEX 3985.03 -78.86 -1.94P/E (x) 13.40P/Bv (x) 1.58

7.11Dividend Yield

STANDARD & POORS/ ASX 200 INDEX

3500

4000

4500

5000

6/4 9/4 12/4 3/4 6/4

Source: Bloomberg

Hong Kong Local stocks dropped. The HSI and HSCEI lost 373 points and 245 points to

18185 and 9375 respectively. Market volume was 51.724 billion. Due to the concern of the China economy decline, market activities dropped

compared to previous trading day. Trading volume dropped 5.2% to 51.72 billion. Among the blue chips, 47 out of 49 stocks dropped, only 2 blue chips, which was CLP holding (0002) and power assets (0006), reflecting investors escape from the risky assets.

We peg resistance for the HSI at 18300 and support at 18000

Close +/- % +/-HSI INDEX 18185.59 -372.75 -2.01P/E (x) 8.81P/Bv (x) 1.26

3.59Dividend Yield

HANG SENG INDEX

16000

18000

20000

22000

24000

26000

6/1 9/1 12/1 3/1 6/1

Source: Bloomberg

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Thailand BTS Group Holdings – Update Recommendation: BUY Previous close: Bt0.76 Fair value: Bt0.92 BTS reported FY12 net profit growth of 734.85% y-y to Bt2,105.63mn in line with our forecast. For the year, total revenue grew 35.36% y-y. Stripping

out ex-item, full-year operating profit came in at Bt989.35mn. Growth momentum in fare box revenue and O&M income is likely to continue in FY13 driven by full-year contribution from the On Nut-Baring

extension line and the opening of two out of four stations of the Wong Wian Yai - Bang Wa extension line: Phothi Nimit and Taland Plu, a catalyst in keeping passenger traffic and O&M income growing.

Increased ad space in modern trade stores would keep media revenue growing at a brisk pace. There is also a plan to list VGI Global Media, a wholly owned subsidiary of BTSC on the Thai stock market.

We keep our FY13 pre-FX profit outlook for BTS at Bt1,588.12mn. We rate BTS shares a ‘BUY’ with a FY13 target price of Bt0.92/share. Hong Kong Longfor Properties (960.HK) – Update Rating: Accumulate Previous close: HKD$11.42 Fair value: HKD$13.20 Longfor’s contracted sales in the first 4 months totaled RMB 9.57bn, declining by 25.87% YoY. Longfor’s sales in the past 2 months exceeded

RMB3bn in the West region including Chongqing. We think that its hot sale in Chongqing is related with large scale promotion, which pulled the purchasing demand effectively and confirmed the good sale trend.

Considering excellent implementation capacity and flexible market strategy, we are positive towards Longfor’s sales future, and its sales proportion in 1H and 2H will be 40% and 60%.

Longfor’s revenue in 2011 rose by 59.6% YoY to RMB 24.09bn, in which revenue from properties development increased by 60.1% YoY to RMB 23.38bn. Profit attributable to shareholders rose by 53.2% YoY to RMB 6.33bn, net profit margin at 26.3%. Excluding fair value gain of investment properties, core profit increased by 74.9% YoY to RMB4.5bn, core profit margin at 18.7%.

When most developers faced the worse financial status in 2011, Longfor’s balance sheet in 2011 pleasantly surprised us. The company’s cash and deposit at the end of 2011 added RMB4.26bn to RMB14.12bn. In spite of net debt increasing to RMB9.85bn, net debt to equity ratio dropped from 43% to 40.9%. The company’s stable balance sheet reflects its cautious capital expense. Its completed properties value for sale at the end of 2011 was equal to that at the end of 2010, reflecting Longfor’s inventories were significantly better than peers.

In our opinion, Longfor’s management has good regional expansion experience and excellent implementation capacity, and the company has rich properties types and flexible market strategy with strict cash control. We expect that as one of major winners, Longfor will express its more powerful competitive edge and acquire more market shares. In addition, new Chongqing government’s positive attitudes towards the economy are helpful to its keeping growth meaningfully.

Currently the company’s valuation is determined mainly by investors’ forecast on regulation policy. We think that the central government’s attitude towards property regulation is loosening gradually. Therefore, valuation of good quality developers will be promoted gradually, especially in 2013. We give Longfor “Accumulate” rating, 12m TP at HKD 13.2, representing to 7.8 times of forecasted P/E in 2013.

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Market News

US Treasuries fell for a second day, the first back-to-back decline in two weeks, as the flight to quality that drove yields to record lows lost

momentum. Benchmark 10-year yields increased one basis point, or 0.01 percentage point, to 1.53 percent as of 9:23 a.m. in Tokyo, according to Bloomberg Bond Trader data. The 1.75 percent note maturing in May 2022 declined 3/32, or 94 cents per $1,000 face amount, to 101 31/32. The all-time low yield was 1.4387 percent set June 1. Treasuries interrupted a rally driven by Europe’s fiscal crisis and signs of slowing economic growth in the US. (Source: Bloomberg)

Oil gained a second day in New Yorkbefore a government report that may show crude stockpiles dropped for the first time in 11 weeks in the U.S., the world’s biggest consumer of the commodity. Futures advanced as much as 0.9 percent after rising for the first day in five yesterday. U.S. inventories probably slipped 1 million barrels last week as refineries increased gasoline output to meet peak summer consumption, according to the median estimate of nine analysts in a Bloomberg News survey before an Energy Department report tomorrow. Supplies climbed to a 22-year high in the week ended May 25. Prices also rebounded after falling to a technical support level. Oil for July delivery gained as much as 78 cents to $84.76 a barrel in electronic trading on the New York Mercantile Exchange, and was at $84.64 at 10:57 a.m. Sydney time. The contract yesterday rose 0.9 percent to $83.98, the highest close since May 31. Prices are 14 percent lower this year. (Source: Bloomberg)

Singapore The Ministry of Law has added two new sub-committees to its intellectual property (IP) steering committee. Formed in end-April, the

steering committee is chaired by Teo Ming Kian, chairman of MediaCorp. The two new sub-committees will focus on the two areas of developing a vibrant marketplace for IP transaction and commercialisation, and building IP capabilities and infrastructure in the country. The chairs of the sub-commitees have been picked from the 15-member steering committee. (Source: BT Online)

The Ministry of Manpower (MOM) on Monday announced that with immediate effect, foreign domestic workers (FDWs) are not allowed to clean window exteriors unless enhanced and safe working conditions are in place. Firstly, the employer or an adult representative of the employer must be physically present to supervise the FDW. Secondly, window grilles must have been installed and locked at all times during the cleaning process. The new rules will apply to all homes, except for windows that are at the ground level or along common corridors. (Source: BT Online)

Hong Kong Walt Disney Co. (DIS) had little trouble raising money for its $4.4 billion Shanghai theme park after winning approval in 2009, as a dozen

Chinese banks offered $2 billion of loans and promised more. Foreign lenders, limited in how much funding they can provide, watched from the sidelines. The deal size was beyond their reach. Citigroup Inc. and HSBC Holdings Plc are among companies still largely shut out of the world’s third-biggest banking market as they face government restrictions on adding branches and offering products. Five years after China said it fully met World Trade Organization obligations to open its economy to global financial firms, Citigroup Inc. (C) and HSBC Holdings Plc (HSBA) are among companies still largely shut out of the world’s third-biggest banking market as they face government restrictions on adding branches and offering products. Foreign banks hold less than 2 percent of assets in China, the lowest share among major emerging markets, according to the International Monetary Fund. (Source: Bloomberg)

China’s non-manufacturing industries expanded at the slowest pace in more than a year, as export orders declined and weakness in real estate countered strength in retailing and leasing, an official survey indicated. The purchasing managers’ index fell to 55.2 in May from 56.1 in April, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing. That’s the lowest reading since March 2011 when the federation started seasonally adjusting the data. The report adds to evidence that the world’s second-biggest economy is weakening as Europe’s debt crisis crimps demand and government curbs on the property market feed through to more industries. JPMorgan Chase & Co. has cut its full-year economic growth forecast for China twice in a month and now estimates an expansion of 7.7 percent, down from 9.2 percent in 2011. (Source: Bloomberg)

Chinese consumers may buy natural gas at more than five times current U.S. futures prices as the government eases control over domestic costs, opening the world’s biggest energy market to more overseas sellers. Wholesale, or city-gate gas, in China’s Guangdong and Guangxi provinces, where the country is running a pilot program linking prices to oil, cost as much as 2.74 yuan (43 cents) a cubic meter since December, according to the National Development and Reform Commission. That’s about $12 per million British thermal units, or five times more expensive than benchmark U.S. futures in New York. China plans to extend the pricing nationwide in two to three years, according to the official Xinhua News Agency, potentially boosting imports from North America, where Henry Hub futures contracts fell to a 10-year low in April. While China seeks to boost the use of cleaner fuels such as gas, retail price caps are discouraging energy companies from increasing supplies because they have to pay international rates and sell at a loss on the domestic market. (Source: Bloomberg)

Thailand Foreign investors turned net sellers of Thai shares worth Bt793.95mn last Fri. (Source: Bisnews) Energy Minister Arak Chonlathanont said the Energy Policy Management Committee agreed to raise the Oil Fund levies on diesel by

Bt0.30/liter from Bt0.90/liter to Bt1.20/liter. (Source: Bisnews) Local politics: (1) the Constitution Court last Fri decided to review the constitutionality of the draft charter amendment bill and issued an

injunction to suspend the third reading of the bill scheduled for Jun 5, and (2) the ABAC poll showed 66.2% of the respondents had no hope that the reconciliation bill would bring peace to the country while most people wanted the government to give more priority to solving economic problems and high product prices, and thought the reconciliation law would benefit the political sector rather than the general public as a whole. (Sources: Bisnews, The Nation)

Thailand’s consumer price index (CPI) in May 2012 was up 2.53% y-y, according to data from the Commerce Ministry. The May inflation

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figure was at stable level as a result of the government’s policy to control product prices and manufacturers’ unwillingness to raise the prices of products, except those which were affected by seasonal factors. (Source: Bisnews)

Indonesia Export in May of this year is expected to increase, even though exports in April fell by 7.36 percent. The increase is supported by the

United States’ economic recovery. Meanwhile depreciation of the rupiah is projected have no significant impact on the exports in May and June. Director of Distribution Statistics, Central Bureau of Statistics (BPS), said the demand from the United States has gradually improved in May, thus, increasing export to that country. Depreciation of the rupiah against the US dollar is expected to show some impact on exports after June. Exports in June are estimated to be higher than May, but import is expected to rise as well. Indonesia's export in April 2012 reached USD 15.98 billion, down 7.36 percent compared to March. Meanwhile, April’s import amounts to USD 16.62 billion, up 1.82 percent compared to USD 16.33 billion in March, so April’s trade balance deficit stands at USD 0.64 billion. The value of import from January to April 2012 reaches USD 62.37 billion, an increase of 16.18 percent over the same period the last year with USD 53.68 billion. (Source: Indonesia Finance Today)

Bank Indonesia (BI) plans to conduct direct trading transactions of rupiah currency with a number of export destinations’ currencies. Deputy Governor of Bank Indonesia, said the central bank is still studying the currencies for the direct trading. His statement is in response to the possibility of direct trading application with trade-partnering countries after the People's Bank of China, China's central bank, officiates direct trading of the yuan to the Japanese’ yen. As quoted by Bloomberg, the two countries have agreed to implement direct trading on June 1, 2012. Therefore, the exchange rate between the two countries will be determined based on market prices and are calculated without any intermediate value of the US dollar. Based on data from the Central Bureau of Statistics (BPS), Indonesia's total export from the period of January to April 2012 amounts to USD 61.94 billion, while exports to ASEAN countries reach USD 10.36 billion, China with USD 7.04 billion, and Japan with USD 5.74 billion. (Source: Indonesia Finance Today)

Sri Lanka Sri Lanka market is closed for public holiday.

Australia Average earnings across the economy fell 4 per cent in the first quarter of calendar 2012 in comparison to the last quarter of 2011, the

ABS said yesterday. Wage growth and lower commodities were seen as the biggest reasons with both contributors not showing any signs of easing any time soon. (Source: Australian Financial Review)

The ANZ monthly job ads index fell 2.4% in May while 4.3% lower than a year earlier. The largest fall was in newspaper job adverts in Western Australia (WA) which was down 5%. The fall in WA job ads is more worrying appreciating the WA’s mining sector has helped maintain economic growth in Australia. (Source: Australian Financial Review)

There is growing opposition to the Gillard government’s plan to allow Chinese investors funding the Northern Australia push to be a major supplier into the Asian food bowl according to a poll by the The Lowy Institute. The major obstruction is to the direct ownership of foreign firms into local farm land while the poll found most respondents favoured bringing in foreign workers to fill the labour shortages (Source: Australian Financial Review)

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Dollar Index 82.36 -0.24% Gold 1,618.85 +0.18%

Crude oil 83.98 +0.90% US Treasury 10yr Yield 1.531 +0.01%

DJI 12,101.46 -0.14% S&P 500 INDEX 1,278.18 +0.01%

SHCOMP 2,308.32 -0.01%

Source: Bloomberg

10000

11000

12000

13000

14000

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

70

75

80

85

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

1200

1400

1600

1800

2000

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

70

80

90

100

110

120

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

1.51.71.92.12.32.52.72.93.13.3

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

2000

2300

2600

2900Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

1000

1100

1200

1300

1400

1500

Jun-11

Jul-11

Aug-11

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Oct-11

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Dec-11

Jan-12

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Apr-12

May-12

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Source: Bloomberg

Major World Indices

JCI -3.82% 3,654.58

HSI -2.01% 18,185.59

KLCI -1.17% 1,555.18

NIKKEI 0.46% 8,333.56

KOSPI 0.76% 1,796.67

SET -2.30% 1,115.19

SHCOMP -2.73% 2,308.55

SENSEX 0.15% 15,988.40

ASX -1.94% 3,985.02

FTSE 100 -1.14% 5,260.19

DOW -0.14% 12,101.46 S&P 500 0.01% 1,278.18 NASDAQ 0.46% 2,760.01

COLOMBO 1.10% 4,885.18

STI -1.70% 2,698.90

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Top Value & VolumeSingaporeTop 10 Value Last % Chg Chg Value ('k) Top 10 Volume Last % Chg Chg Volume ('k)GOLDEN AGRI-RESO 0.62 -5.08 -0.030 63,182 GOLDEN AGRI-RESOURCES LTD 0.62 -5.08 -0.030 101,986KEPPEL CORP LTD 9.64 -2.12 -0.200 58,030 OLAM INTERNATIONAL LTD 1.53 -5.52 -0.080 26,753SINGAP TELECOMM 3.05 -0.66 -0.020 56,794 SAKARI RESOURCES LTD 1.25 -10.13 -0.115 26,598DBS GROUP HLDGS 12.95 -1.41 -0.180 55,305 GENTING SINGAPORE PLC 1.47 -1.74 -0.025 24,744OLAM INTERNATION 1.53 -5.52 -0.080 41,188 NOBLE GROUP LTD 1.07 -2.40 -0.025 24,048GENTING SINGAPOR 1.47 -1.74 -0.025 36,249 SINGAPORE TELECOM LTD 3.05 -0.66 -0.020 18,516UNITED OVERSEAS 16.97 -1.74 -0.290 35,828 LIONGOLD CORP LTD 1.00 -0.51 -0.005 14,212SAKARI RES LTD 1.25 -10.13 -0.115 33,718 YANGZIJIANG SHIPBUILDING 0.97 -4.30 -0.040 13,241SEMBCORP MARINE 4.27 -3.14 -0.130 27,149 GMG GLOBAL LTD 0.11 -4.59 -0.005 12,251NOBLE GROUP LTD 1.07 -2.40 -0.025 25,653 STX OSV HOLDINGS LTD 1.31 -6.94 -0.085 11,277

Hong KongTop 10 Value Last % Chg Chg Value ('k) Top 10 Volume Last % Chg Chg Volume ('k)PING AN INSURA-H 53.40 -5.49 -3.10 1,414,261 BANK OF CHINA-H 2.94 -1.34 -0.04 312,076CHINA CONST BA-H 5.32 -1.85 -0.10 1,364,557 CHINA CONST BA-H 5.32 -1.85 -0.10 256,944HSBC HLDGS PLC 60.15 -1.15 -0.70 1,215,356 IND & COMM BK-H 4.65 -1.06 -0.05 245,084AIA GROUP LTD 24.65 -2.38 -0.60 1,179,989 GOME ELECTRICAL 1.05 -11.02 -0.13 206,471IND & COMM BK-H 4.65 -1.06 -0.05 1,130,971 AGRICULTURAL-H 3.09 -0.64 -0.02 92,311CHINA MOBILE 76.75 -1.48 -1.15 1,087,981 EVERGRANDE REAL 4.00 -3.85 -0.16 91,984CHINA LIFE INS-H 17.06 -4.91 -0.88 944,453 CHINA PETROLEU-H 6.77 -1.31 -0.09 86,256BANK OF CHINA-H 2.94 -1.34 -0.04 915,160 ZIJIN MINING-H 2.59 +2.37 +0.06 79,703SANDS CHINA LTD 25.05 -4.75 -1.25 876,430 YUEXIU PROPERTY 1.78 -7.29 -0.14 72,540CNOOC LTD 13.38 -2.62 -0.36 851,383 PETROCHINA CO-H 9.71 -0.72 -0.07 71,688

ThailandTop 10 Value Last % Chg Chg Value ('k) Top 10 Volume Last % Chg Chg Volume ('k)PTT GLOBAL CHEM 53.25 -1.84 -1.00 1,681,892 ASIA AVIATION 3.30 -10.81 -0.40 376,303BANGKOK BANK PUB 172.00 -4.44 -8.00 1,369,693 BTS GROUP HOLDIN 0.76 -1.30 -0.01 205,839ASIA AVIATION 3.30 -10.81 -0.40 1,300,258 JASMINE INTL PCL 2.88 -3.36 -0.10 182,320ADVANCED INFO 179.50 +0.28 +0.50 1,270,229 THAI-GERMAN PRO 0.39 -7.14 -0.03 156,064KASIKORNBANK PCL 148.50 -4.19 -6.50 1,017,717 SIAM INTER MULTI 2.16 -10.00 -0.24 87,359PTT PCL 305.00 -2.56 -8.00 989,455 BANGKOK LAND PCL 0.67 +0.00 +0.00 81,116SIAM CEMENT PCL 329.00 -3.80 -13.00 820,341 TMB BANK PCL 1.44 -2.70 -0.04 67,078SIAM COMM BK PCL 135.50 -3.56 -5.00 807,376 HEMARAJ LAND DEV 2.82 +1.44 +0.04 64,285CHAROEN POK FOOD 36.75 -3.29 -1.25 663,138 PRINSIRI PCL 1.46 -6.41 -0.10 61,265PTT EXPL & PROD 154.50 -1.59 -2.50 621,908 TRUE CORP PCL 3.68 -0.54 -0.02 59,850

IndonesiaTop 10 Value Last % Chg Chg Value ('mn) Top 10 Volume Last % Chg Chg Volume ('k)BANK RAKYAT INDO 5,250 -4.55 -250.00 288,227 ENERGI MEGA PERS 122 -11.59 -16.00 392,986ASTRA INTERNATIO 6,240 -1.50 -95.00 276,003 SENTUL CITY TBK 225 -4.26 -10.00 214,801BANK MANDIRI 6,600 -4.35 -300.00 240,171 BAKRIELAND DEV 84 -12.50 -12.00 157,197BUMI RESOURCES 1,220 -13.48 -190.00 183,254 BUMI RESOURCES 1,220 -13.48 -190.00 144,761UNITED TRACTORS 21,200 -7.83 -1,800.00 180,327 TRADA MARITIME 800 -3.61 -30.00 124,892ADARO ENERGY TBK 1,200 -13.04 -180.00 135,694 ADARO ENERGY TBK 1,200 -13.04 -180.00 109,000TAMBANG BATUBARA 13,250 -11.67 -1,750.00 129,207 BAKRIE TELECOM 245 -12.50 -35.00 89,154SEMEN GRESIK TBK 9,950 -8.29 -900.00 116,098 BAKRIE SUMATERA 200 -11.11 -25.00 69,645BANK CENTRAL ASI 6,900 -2.82 -200.00 105,182 SURYA SEMESTA IN 810 -7.95 -70.00 68,524TELEKOMUNIKASI 7,600 0.00 0.00 103,830 BORNEO LUMBUNG 570 -9.52 -60.00 58,713

Sri LankaTop 10 Value Last % Chg Chg Value ('k) Top 10 Volume Last % Chg Chg Volume ('k)CENTRAL FINANCE 132.70 0.30 0.40 84,375 WASKADUWA BEACH 5.70 3.64 0.20 3,016COMMERCIAL BK 104.00 0.00 0.00 30,431 SMB LEASING - NV 0.30 50.00 0.10 1,962CEYLON TOBACCO 676.00 -0.13 -0.90 20,775 ASIRI HOSPITALS 7.60 1.33 0.10 1,189WASKADUWA BEACH 5.70 3.64 0.20 15,093 PANASIAN POWER L 2.20 0.00 0.00 1,026CARSON CUMBERBAT 468.20 1.28 5.90 14,038 ASIA ASSET FINAN 2.90 11.54 0.30 799PC PHARMA PLC 14.40 -0.69 -0.10 9,361 SWARNAMAHAL FINA 7.50 7.14 0.50 692ASIRI HOSPITALS 7.60 1.33 0.10 9,029 PC PHARMA PLC 14.40 -0.69 -0.10 650REGNIS LANKA PLC 96.10 0.63 0.60 6,515 FREE LANKA CAPIT 1.50 0.00 0.00 648ENVIRONMENTAL RE 12.00 4.35 0.50 5,989 CENTRAL FINANCE 132.70 0.30 0.40 626NESTLE LANKA PLC 1137.30 3.40 37.40 5,280 DIALOG AXIATA PL 5.60 3.70 0.20 522Source: Bloomberg

Regional Market Focus 5 June 2012

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AustraliaTop 10 Value Last % Chg Chg Value ('k) Top 10 Volume Last % Chg Chg Volume ('k)BHP BILLITON LTD 30.750 -3.09 -0.98 412,810 TELSTRA CORP LTD 3.660 0.55 0.02 70,922NATL AUST BANK 22.030 -1.96 -0.44 238,178 ELDERS LTD 0.220 -2.22 -0.01 4,853RIO TINTO LTD 52.900 -4.74 -2.63 313,357 KAIRIKI ENERGY LTD 0.002 -33.33 0.00 47,839COMMONW BK AUSTR 49.050 -1.29 -0.64 208,713 FLINDERS MINES LTD 0.135 -12.90 -0.02 15,809TELSTRA CORP 3.660 0.55 0.02 259,015 METAL STORM LTD 0.001 0.00 0.00 23,489AUST AND NZ BANK 20.870 -1.74 -0.37 177,779 ALUMINA LTD 0.955 -2.55 -0.03 18,003WESTPAC BANKING 20.200 -1.17 -0.24 162,752 FORTESCUE METALS GROUP 4.350 -4.81 -0.22 15,231WOODSIDE PETRO 30.870 -3.41 -1.09 96,220 LYNAS CORP LTD 0.970 -5.37 -0.06 19,458FORTESCUE METALS 4.350 -4.81 -0.22 66,817 NORTON GOLD FIELDS LTD 0.230 -2.13 -0.01 1,812NEWCREST MINING 24.530 1.74 0.42 112,512 VERUS INVESTMENTS LTD 0.004 0.00 0.00 9,139Source: Bloomberg

Commodities % Chg Chg Last Price of S$1 Price of US$1GOLD SPOT (US$/OZ) +0.06 +0.95 1,618.85 0.7999 0.9704SILVER SPOT (US$/OZ) +0.40 +0.11 28.25 0.8101 1.0435WTI Cushing Crude Oil Spot Price (US$/bbl) +0.90 +0.75 83.98 0.6222 1.2476

0.5052 1.53680.7764 1.0000

Commodities % Chg Chg Last 4.9420 6.3651Malaysian Rubber Board Standard (MYR/kg) -2.62 -25.75 955.25 6.0237 7.7587PALM OIL (MYR/Metric Tonne) -1.67 -51.50 3,040.50 60.8200 78.3500

916.6136 1179.6900Index % Chg Chg Last 2.4836 3.1965 DOLLAR INDEX SPOT -0.26 -0.22 82.34 24.4546 31.5000Source: Bloomberg

JAPANESE YENKOREAN WONMALAYSIAN RINGGITTHAI BAHT

US DOLLARCHINA RENMINBIHONG KONG DOLLAR

CANADIAN DOLLAREUROBRITISH POUND

CurrenciesAUSTRALIAN DOLLAR

Commodities & Currencies

Maturity Today Yesterday Last Week Last Month3 Months 0.04 0.04 0.07 0.056 Months 0.11 0.10 0.12 0.122 Years 0.25 0.24 0.28 0.253 Years 0.34 0.32 0.40 0.365 Years 0.67 0.62 0.74 0.7810 Years 1.52 1.45 1.74 1.8830 Years 2.56 2.52 2.84 3.07

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

US Treasury Yields

1.481.27

Source: Data provided by ValuBond – http://w w w .valubond.com

Regional Market Focus 5 June 2012

11 of 16

Date Statistic For Survey Prior Date Statistic For Survey Prior6/5/2012 ISM Non-Manf. Composite MAY 53.5 53.5 6/5/2012 Electronics Sector Index MAY -- 51.56/6/2012 MBA Mortgage Applications 1-Jun -- -1.30% 6/5/2012 Purchasing Managers Index MAY -- 49.76/6/2012 Nonfarm Productivity 1Q F -0.70% -0.50% 6/6/2012 Automobile COE Open Bid Cat A 6-Jun -- 580016/6/2012 Unit Labor Costs 1Q F 2.10% 2.00% 6/6/2012 Automobile COE Open Bid Cat B 6-Jun -- 852166/7/2012 Fed's Beige Book 6/6/2012 Automobile COE Open Bid Cat E 6-Jun -- 868896/7/2012 RBC Consumer Outlook Index JUN -- 47.6 6/7/2012 Foreign Reserves MAY -- $246.11B6/7/2012 Initial Jobless Claims 2-Jun 380K 383K 6/12/2012 Singapore Manpow er Survey 3Q -- 20%6/7/2012 Continuing Claims 26-May 3240K 3242K 6/15/2012 Unemployment Rate (sa) 1Q F -- 2.10%6/7/2012 Bloomberg Consumer Comfort 3-Jun -- -39.3 6/15/2012 Retail Sales Ex Auto (YoY) APR -- 6.50%07-08 JUN ICSC Chain Store Sales YoY MAY -- 0.60% 6/15/2012 Retail Sales (YoY) APR -- 9.10%6/8/2012 Consumer Credit APR $10.650B $21.355B 6/15/2012 Retail Sales (MoM) sa APR -- 1.60%6/8/2012 Annual Revisions: Trade 6/18/2012 Electronic Exports (YoY) MAY -- 1.00%6/8/2012 Trade Balance APR -$49.5B -$51.8B 6/18/2012 Non-oil Domestic Exports (YoY) MAY -- 8.30%6/8/2012 Wholesale Inventories APR 0.50% 0.30% 6/18/2012 Non-oil Domestic Exp SA (MoM) MAY -- 13.10%6/12/2012 NFIB Small Business Optimism MAY -- 94.5 6/20/2012 Automobile COE Open Bid Cat A 20-Jun -- --

Date Statistic For Survey Prior Date Statistic For Survey Prior6/5/2012 Consumer Confidence Economic MAY -- 67.5 6/5/2012 Purchasing Managers Index MAY -- 50.36/8/2012 Foreign Reserves 1-Jun -- $172.6B 6/7/2012 Foreign Currency Reserves MAY -- $295.6B6/8/2012 Forw ard Contracts 1-Jun -- $31.8B 6/12/2012 Hong Kong Manpow er Survey 3Q -- 8%6/13/2012 Benchmark Interest Rate 13-Jun -- 3.00% 6/14/2012 Industrial Production (YoY) 1Q -- -2.20%6/15/2012 Foreign Reserves 8-Jun -- -- 6/14/2012 Producer Price (YoY) 1Q -- 6.50%6/15/2012 Forw ard Contracts 8-Jun -- -- 6/18/2012 Unemployment Rate SA MAY -- 3.30%18-20 JUN Total Car Sales MAY -- 87788 6/19/2012 Composite Interest Rate MAY -- 0.39%18-20 JUN Customs Exports (YoY) MAY -- -3.67% 6/21/2012 CPI - Composite Index (YoY) MAY -- 4.70%18-20 JUN Customs Imports (YoY) MAY -- 7.87% 6/21/2012 Bal of Paymts - Overall 1Q -- $49.75B18-20 JUN Customs Trade Balance MAY -- -$2867M 6/21/2012 Bal of Paymts - Current A/C 1Q -- $20.09B6/22/2012 Foreign Reserves 15-Jun -- -- 6/26/2012 Exports YoY% MAY -- 5.60%6/22/2012 Forw ard Contracts 15-Jun -- -- 6/26/2012 Imports YoY% MAY -- 5.00%26-28 JUN Mfg. Production Index ISIC SA MAY -- 180.07 6/26/2012 Trade Balance MAY -- -42.9B26-28 JUN Mfg. Production Index ISIC NSA MAY -- 0.54 6/29/2012 Money Supply M1 - in HK$ (YoY) MAY -- 8.70%26-28 JUN Total Capacity Utilization ISIC MAY -- 62.2 6/29/2012 Money Supply M2 - in HK$ (YoY) MAY -- 5.70%Source: Bloomberg Source: Bloomberg

Source: Bloomberg

Thailand Hong Kong

US SingaporeEconomic Announcement

Source: Bloomberg

Regional Market Focus 5 June 2012

12 of 16

Date Statistic For Survey Prior Date Statistic For Survey Prior05-06 JUN Foreign Reserves MAY -- $116.41B 11-20 JUN Exports YoY% APR -- -10.20%05-06 JUN Net Foreign Assets (IDR Tln) MAY -- 1020.77T 11-20 JUN Imports YoY% APR -- 3.90%6/12/2012 Bank Indonesia Reference Rate 12-Jun -- 5.75% 6/12/2012 Repurchase Rate 12-Jun -- 7.75%12-20 JUN Total Local Auto Sales MAY -- 87080 6/12/2012 Reverse Repo Rate 12-Jun -- 9.75%12-20 JUN Total Motorcycle Sales MAY -- 617508 15-29 JUN GDP (YoY) 1Q -- 8.30%7/2/2012 Indonesia June Markit 6/29/2012 CPI Moving Average (YoY) JUN -- --7/2/2012 Inf lation (YoY) JUN -- 4.45% 6/29/2012 CPI (YoY) JUN -- --7/2/2012 Inf lation NSA (MoM) JUN -- 0.07% 7/10/2012 Repurchase Rate 10-Jul -- --7/2/2012 Core Inflation (YoY) JUN -- 4.14% 7/10/2012 Reverse Repo Rate 10-Jul -- --7/2/2012 Exports (YoY) MAY -- -3.50% 10-20 JUL Exports YoY% MAY -- --7/2/2012 Total Imports (YoY) MAY -- 11.70% 10-20 JUL Imports YoY% MAY -- --7/2/2012 Total Trade Balance MAY -- -$641M 7/31/2012 CPI Moving Average (YoY) JUL -- --7/2/2012 Consumer Confidence Index JUN -- 109 7/31/2012 CPI (YoY) JUL -- --

02-06 JUL Danareksa Consumer Confidence JUN -- 91.3 8/7/2012 Repurchase Rate 7-Aug -- --

03-06 JUL Foreign Reserves JUN -- -- 8/7/2012 Reverse Repo Rate 7-Aug -- --

Date Statistic For Survey Prior6/5/2012 AiG Performance of Service MAY -- 39.66/5/2012 Current Account Balance 1Q -14650M -8374M6/5/2012 Australia Net Exports of GDP 1Q -0.7 0.36/5/2012 RBA CASH TARGET 5-Jun 3.50% 3.75%6/6/2012 Gross Domestic Product (QoQ) 1Q 0.50% 0.40%6/6/2012 Gross Domestic Product (YoY) 1Q 3.20% 2.30%6/7/2012 AiG Perf of Construction Index MAY -- 34.96/7/2012 Employment Change MAY 0.0K 15.5K6/7/2012 Unemployment Rate MAY 5.10% 4.90%6/7/2012 Full Time Employment Change MAY -- -10.5K6/7/2012 Part Time Employment Change MAY -- 26.0K6/7/2012 Participation Rate MAY 65.20% 65.20%6/7/2012 Foreign Reserves MAY -- A$47.6B6/8/2012 Home Loans MoM APR 0.00% 0.30%6/8/2012 Investment Lending APR -- -1.00%

Australia

Sri Lanka

Source: Bloomberg

Source: BloombergSource: Bloomberg

Indonesia

PHILLIP RESEARCH STOCK SELECTION SYSTEMS

BUY >15% upside from the current price

HOLD Trade within ± 15% from the current price

SELL >15% downside from the current price

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