MCI (P) 137/11/2012 Ref No: RM2013_0040 1 of 16

Regional Market Focus

Phillip Securities Research Pte Ltd

28 February 2013

Singapore

UOB – Results Recommendation: Accumulate Previous close: S$19.20 Fair value: S$20.95

4Q12 results beat expectations on strong non-trading income, lower taxes.

S$0.40 Final and S$0.10 Special dividend declared.

Maintain “Accumulate” on inexpensive valuations, strong fundamentals, with unchanged target price of S$20.95, based on P/B multiple of 1.35X.

Singapore Telecommunications Sector – Update

Service revenue remains largely stable q-q

Telcos remain attractive as long term investments due to high dividend yields, but short term market-weight

Neutral on SingTel and M1, Reduce on StarHub. We prefer SingTel over M1 and StarHub Transportation Sector – Update

Prefer Aviation Services sector despite outperformance

Abnormally high level of uncertainty in the Land Transport sector

Cyclical Airline & Shipping counters remain subdued

Thailand

Charoen Pokphand Food – Company Results Recommendation: ACCUMULATE Previous close: Bt32.75 Fair value: Bt37.25

CPF posted a 4QCY12 net profit of Bt238mn, down 90% y-y and q-q on deteriorating operating performance at chicken, hog, shrimp and overseas operations as a result of a collapse in meat prices.

On a normalized basis, CPF turned in a massive operating loss of up to Bt2,171mn in 4QCY12. CPF booked a total net gain of Bt2,409mn in 4QCY12, comprising a Bt2,494mn gain on divestment of CPALL, a FX gain of Bt28mn, and a Bt113mn loss from change in fair value of biological assets.

The prospect of a recovery in meat prices against the backdrop of a decline in raw materials prices and the likely improvement in overseas operations could set the stage for a return to positive earnings growth on a normalized basis this year.

At current prices, we rate CPF shares an ‘ACCUMULATE’ with a target price of Bt37.25/share.

Asian Property – Company Update Recommendation: REDUCE Previous close: Bt10.50 Fair value: Bt9.20

AP aims for 8.7% presales growth in 2013 to Bt22bn with a plan to open both low- and high-rise projects.

We keep our CY13 revenue and profit outlook unchanged with projected 15% and 18% y-y growth given sizable backlog and YTD SDH presales riding on growth momentum.

We rate AP a ‘REDUCE’ as the stocks have been trading above its historical P/E multiples.

Major Cineplex Group – Company Update Recommendation: ACCUMULATE Previous close: Bt21.70 Fair value: Bt23.70

MAJOR’s CY12 net profit was short of forecast due to consolidated loss from MPIC and provision for goodwill write-down.

MAJOR announced to pay 2HCY12 dividend of Bt0.48 and the stock will go ex-dividend on Feb 28.

MAJOR is in process of restructuring MPIC and we are optimistic MPIC’s earnings would see notable improvement this year.

We keep our CY13 earnings outlook unchanged. At current share prices, we rate MAJOR an ACCUMULATE’ with a target price of Bt23.70/share.

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28 February 2013

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Hong Kong

BCIA(694.HK) - Investment for both offensive and defensive Recommendation: Buy Previous close: HKD6.05 Fair value: HKD7.60

The adjustment of valuation provide a buying opportunity: as a large-scale infrastructure, the airport owns specific defensive characteristics such as the price rigidity, rich cash flow and stable dividend payout policy, and the growth of non-aeronautical business lays the foundation for the performance improvement benefiting from the passenger throughput especially the large increase in the international/Hong Kong/Macau flights, and the expansion of commercial areas. It is a good investment subject in both offensive and defensive strategies. The Company’s previous valuation recovered obviously and the share price faces probable adjustment in the short term, but provides the good buying opportunity. We expect the Company’s net profits would achieve RMB1.31 and 1.73 billion, equivalent to EBITDA/Share RMB0.91 and 1.02 in 2012 and 2013 respectively. Currently the estimated Next-year EBITDA/Share for the European airport company is 7.4x, and 6.4x of Chinese airport companies. Our target price is HK$7.6, equivalent to 6x 2013E EBITDA/Share, recommends Buy rating

Strategy Views

- Country Strategy: Thai, 7 Feb / China & HK, 28 Jan / S’pore, 26 Dec - Global Macro, Asset Strategy: 24 Jan, Update / 4 Jan / US, 21 Dec / ASEAN, 5 Dec Morning Commentary

- STI: +0.21% to 3261.1 - SET: -0.80% to 1518.1 - JCI: +1.14% to 4716.4 - KLCI: -0.00% to 1624.1 - HSCEI: +0.36% to 11144.3 - Hang Seng: +0.25% to 22577 - Nikkei 225: -1.27% to 11254 - ASX200: +0.86% to 3331.1 - India NIFTY: +0.62% to 5796.9 - S&P500: +1.27% to 1516.0 Keppel Corp Ltd – New order wins update

By Nicholas Ong, Investment Analyst Keppel’s new order wins for 2013 begins with contracts worth S$200mn (announced in Tue with two contracts secured) and US$300mn (announced in Wed with three contracts secured) from repeat customers. Details of the US$300mn contracts: (1) The 1st contract to construct a KFELS B Class jack-up is awarded by Star Drilling, a Singapore-based company promoted by companies of D.P. Jindal Group. Delivery of the rig is scheduled for 4Q14. (2) The 2nd contract is awarded by Ensco to upgrade semi-sub ENSCO 5006. The project is expected to commence in 1Q14 and complete in 2Q14. (3) The 3rd contract from Diamond Offshore also comprises the upgrading of semi-sub Ocean Patriot. Work is expected to commence in Jun 2013 with redelivery at end 2013. As for the details of the S$200mn contracts: (1) The first contract to integrate the topside modules of a FPSO unit is awarded by MTOPS, which is a JV between MODEC and TOYO. Integration works will take place from 3Q14 to 3Q15. (2) The second contract is awarded by SBM Offshore to fabricate an internal turret for a new FPSO. The project is expected to complete by 3Q14. We maintain our FY13-14E earnings estimates given we have factored in S$5.9bn new order wins in 2013. Maintain Accumulate with unchanged target price of S$12.38. Pan United Corp (PUC) - Positive FY12 results

By Joshua Tan, Hd of Research We predicted that PUC would raise their final dividend from 2c to 2.5c (full year 4c), and were spot on as the group posted earnings that were in-line with our expectations. PATMI came in at S$43.1m (7.8c EPS) vs our estimate of S$44.3m (8.0s EPS) as building materials powered home the full year result as expected. China port CXP's earnings were slightly dampened as the preferential tax rate it enjoyed normalized. Positive surprise was that shipping posted positive ebit and bottom line margins even after stripping out disposal gains (we expected breakeven). Going forward, as Singapore fills the infrastructure gap, we expect PUC's ready mixed concrete to continue to be in hot demand; CXP's earnings growth to resume; and Shipping to start contributions. As the demand side of the equation is robust, our main concern is that we do see some cost pressures creeping in. Nonetheless, all in the result is positive and sets a good tone for the rest of this year. We will release a formal report tomorrow as we are scheduled a meeting with PUC management this morning. For the moment, no change to our BUY rating as although our TP of S$0.88 has been exceeded (S$0.92 last closing), we will be re-assessing our TP in a positive light. MARKET OUTLOOK:

By Ng Weiwen, Macro Analyst The Dow (DJIA) surged overnight, shrugging off the Italian election gridlock to register the second consecutive triple-digit gain. The bullish exuberance was largely on account of: (i) 6.3% surge in core (nondefense, ex-aircraft) capex orders in Jan to a new cyclical high in the US (we have already sighted the capex rebound since late last year in our GMAS report) (ii) Bernanke's observation in Day 2 of his Congress testimonial that the housing market recovery has gained traction (positive), though Bernanke also cautioned that the Fed must review its exit strategy from LSAPs soon (a recurrent theme in our US macro commentaries) (iii) Fed's as well as ECB's pledge to ensure monetary policy remain accommodative in the near term (iv) Italy's successful government bond auction (€6.5 bn), albeit at a higher borrowing cost

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While both the S&P 500 and DJIA are just a whisker away from their record highs, we reckon there is a slightly less than even chance of the clearing above their strong technical resistance levels of 1575 (triple top) and 14200 (double top) respectively. In the US, political gridlock persist in negotiations over the impending 1st March sequestration in the US. If warring politicians do not strike a more modest deficit reduction deal before then, the US$85 billion automatic "sequester" spending reductions will kick in, weighing on the economy as well as equities. Positive sentiment in US markets overnight is likely to rouse animal spirits in Asian markets today. The STI inched up yesterday (consistent with our guidance), treading insipidly on its 40dma support level and lower bollinger band. Looking ahead, gains –if any- for the STI will be capped by the political impassae in Italy. In fact, it will be a challenge to close the 26th Feb bearish gap. At this juncture, it is unclear as to whether Berlusconi and Bersani can overcome their deep divide and form a grand coalit ion government. As we have mentioned previously in our commentaries, with Berlusconi in the government, Italian reform commitments are in doubt and this will jolt the fragile equilibrium that the EZ is at now. If markets start to doubt Italy's qualifications for OMT aid, borrowing costs (i.e. Italian 10yr bond yields) will continue to escalate to unsustainable level of around 7% and that will have negative ramifications for equity markets. For the STI, near-term support at 3250 level. 3319 (52-week high) will be the immediate resistance level, followed by 3400 psychological resistance level and subsequently 3800 major key resistance. Near-term weakness for the HSCEI and HSI. Selling pressure has not abated for the HSCEI as well as HSI as both indices continue to hug their respective lower bollinger band. For both indices, the bearish breakaway gap to the downside formed in early Feb has yet to be filled, portending further downside in the near term. For the Nikkei 225, it continued to retrace lower, perching precariously below its 10dma support level yesterday. Looking ahead, there is another tactical trading opportunity with regard to the Nikkei 225 (pref. using CFDs) if you missed the earlier breakout (25th Feb bullish gap) that we have guided previously (20th Feb morning commentary). Specifically, PM Abe will announce his nomination for the BoJ Governor anytime soon. Markets are expecting -though not yet fully pricing in- Kuroda who is a dove and will likely have the support of both the upper and lower houses. So, we can expect a knee jerk reaction in the Yen and Nikkei when the official nomination announcement is made and when the incoming BoJ Governor makes his maiden monetary policy speech. Though, after the short bout of breakout, the Nikkei might pull back as there is a significant probability that markets might ‘sell the fact’. (All equity indices mentioned in this note are tradable with Phillip CFDs or ETFs) Macro data:

In US, while durable goods new orders slumped 5.2% in Jan, core (nondefense, ex-aircraft) capex orders surged 6.3% to a new cyclical high. In Thailand, exports rose 16% y-y in Jan (on low base effects as a result of devastating floods late 2011). Imports surged 41% y-y on higher purchases of gold, resulting in a record trade deficit of US$5.5bn in Jan vs US$2.4 bn deficit in the preceding month. In Euro zone, economic confidence continues to improve, with the confidence index rising to 91.1 in Feb, exceeding the market expected 89.9 and prior 89.2 reading. While European Central Bank President Mario Draghi said last week that the euro area should begin a“very gradual recovery” later this year, services and manufacturing data suggest the region’s economy continues to contract. In UK, GDP fell by 0.3% q-q 4q12, which is in line with the market expectation, after the same 0.3% q-q drop in 3q12. On y-y basis, GDP grew by a minor 0.3% y-y in 4q12, after reporting stagnancy in 3q12. Investment fell by 0.4% y-y, while the market was expecting a 0.2% y-y gain, after the 0.2% y-y loss in 3q12. Private consumption advanced 0.2% y-y, while the market was predicting a 0.1% y-y loss, after the 0.4% y-y gain in 3q12. Exports declined by 1.5% y-y, after the 1.2% y-y gain in 3q12. As announced earlier, Moody’s has downgraded UK’s sovereign debt citing the weak economic outlook. George Osborne, the Chancellor of the Exchequer, announced on 26 Feb that the government would redouble its efforts to reduce the nation’s debt; this would likely continue exerting downward pressure on the nation’s economic growth. In Japan, retail trade rose by 2.3% m-m in Jan, exceeding the market expected 0.9% m-m pace, after the 0.1% m-m gain in Dec. On y-y basis, retail trade fell by 1.1% y-y, after the 0.4% y-y gain in Dec. Since the new leadership came into power, JPY has depreciated over 20%. This leads to better outlook for the nation’s exporters as weak currency support exports. However, positive effect on the nation’s economy as whole is yet to be shown. In Hong Kong, GDP reported a seasonally adjusted 1.2% q-q growth in 4q12, trailing the market expected 1.4% q-q reading but exceeding the 0.6% q-q gain achieved in 3q12. On y-y basis, GDP grew by 2.5% y-y in 4q12, compared to the 1.3% y-y growth in 3q12. The city’s economic growth has benefited from mainland China’s economic bottoming out. Currently registering the world’s highest housing price, the government is likely to continue add curbs to the property market and work on a widening income gap by boosting spending on poor and elderly. In Taiwan, industrial production rose by 19.17% y-y in Jan, exceeding the market expected 16.8% y-y pace, after a 2.39% y-y gain in Dec. Commercial sales rose by 7.71% y-y in Jan, generally in line with the market expected 7.78% gain, after the 1.74% y-y gain in Dec. Like Hong Kong, the export centric island has also benefited from the economic recovery of China. Going forward, we expect the increase demand in China to continue to lend support to Taiwan’s economic growth.

Regional Market Focus

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Singapore The benchmark STI inched higher to 3,261.12 (+0.21%). The 12.2bn shares

traded were worth S$1.8bn in value. Despite a sharp decline in NIMs of 8bp q-q, UOB reported results that beat our

expectations. One of our top picks in the Singapore Market Pan United reported a positive set of results to end the year and our detailed analysis would follow after a management meeting today.

Top picks for the year are Pan United (Buy, TP: S$0.88), SIAEC (Buy, TP: S$6.10) & Capitaland (Accumulate, TP: S$4.05). Pan United is a dominant supplier to the construction industry in Singapore and we expect the company to perform well given the strong pipeline of infrastructure work over the next few years. Although current price has overshot our TP, and may experience short term profit taking, we look forward to 4q12 results to reassess our TP. SIAEC is a key beneficiary of the aviation growth story in the region and offers excellent dividend yields. Capitaland would be a beneficiary of the stabilisation of property prices and bottoming out of economic conditions in China.

Close +/- % +/-FSSTI 3261.12 6.86 0.21P/E (x) 10.32P/Bv (x) 1.43

2.84Dividend Yield

STRAITS TIMES INDEX

2500

2700

2900

3100

3300

3500

2/27 5/27 8/27 11/27 2/27

Source: Bloomberg

Thailand The composite SET index whipsawed between positive and negative territory on

Wed. Selective buying lent support to the market while sell-offs in bank, building material and energy counters weighed on overall market sentiment.

Thai stocks are expected to track regional markets higher today after the DJIA jumped as much as 175 points on US Federal Reserve Chairman Ben Bernanke’s reaffirmation of his commitment to the Fed’s stimulus efforts. Yesterday’s steep pullback in the composite SET index however triggered a technical sell signal. Under this circumstance, what remains to be seen today is whether the main index could break above 1524. From a technical viewpoint, a breakout above 1524 could open up the way for further upside. In view of market moving factors, there appears to be nothing new for the meantime as the Mar 1 deadline for US automatic federal spending cuts, the so-called sequestration hardly seems to have any impact on the stock markets as the sequester cuts may repeatedly be postponed. Due to ongoing uncertainties, investors should not be complacent as the sequestration would negatively hurt market sentiment if it really happens. In addition to US sequester worries, political uncertainty in Italy and foreign selling of Thai shares still need to be closely watched. If the SET index fails to break above 1524, further pullback towards 1500-1490 could be in store.

In the near term, investors could continue to selectively buy stocks if the composite SET index can break above 1524. If not, pare back equity holdings to 50% of the portfolio.

Today we peg resistance for the SET index at 1524-1527 and support at 1510-1500.

Close +/- % +/-SET INDEX 1518.05 -12.27 -0.80P/E (x) 17.64P/Bv (x) 2.47

2.63Dividend Yield

STOCK EXCH OF THAI INDEX

900

1000

1100

1200

1300

1400

1500

1600

2/27 5/27 8/27 11/27 2/27

Source: Bloomberg

Indonesia

Most Indonesian stocks rose on Wednesday (27/02), as the majority of stock markets in Asia rebounded with positive leads from the US markets overnight. The Jakarta Composite Index (JCI) rallied 53.384 points, or 1.14%, to close at its all time high at 4,716.415. The advance included all 9 major industry groups, led by construction, property and real estate sector that surged 2.80%, trailed by infrastructure sector with 1.90%-gain, and consumer goods sector with 1.26%-advance. Most of the blue-chip stocks also rose. The LQ45 index that tracks those stocks added 9.764 points, or 1.22%, at 808.528, a level never seen before. The Rupiah strengthened on Wednesday, climbed 15 points to IDR 9,690 against the US dollar. Indonesian 2-year government bond yield rose 1.8 bps at 4.341%. For every stock that declined, more than 3 advanced Wednesday on the Indonesia Stock Exchange, where 6.137 billion shares with total value of IDR 6.19 trillion traded on the regular board. Foreign investors accumulated net purchases worth IDR 822.65 billion.

The Jakarta Composite Index (JCI) will likely extend prior session’s advance. We expect the JCI to trade higher, with support and resistance at 4,656 and 4,752 respectively.

Close +/- % +/-JCI Index 4716.42 53.38 1.14P/E (x) 18.72P/Bv (x) 3.05

1.92Dividend Yield

JAKARTA COMPOSITE INDEX

3400

3600

3800

4000

4200

4400

4600

4800

2/27 5/27 8/27 11/27 2/27

Source: Bloomberg

Regional Market Focus

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Sri Lanka The Colombo bourse concluded the second trading day of the week on a positive

note resulting in both indices to retain within the green territory; this was as a result of the buying sentiment of the investors which was visible on most parts of the day. The benchmark ASPI Index closed positive at 5,674.47 gaining 4.99 points or 0.09% during the day having recorded a negative closure on the previous day.

Meanwhile the S&P SL20 Index increased by 8.61 points or 0.27% to close at 3,210.82. The market capitalization as at the day’s closure was LKR 2.18Tn recording a year to date gain of 0.58%.The total turnover for the day amounted to LKR 623.12Mn; this was a decrease of 12.73% compared to the previous trading day.

Under the Sectorial review Bank Finance & Insurance and Telecommunications stood out as the best performers contributing LKR 386Mn and LKR 46Mn respectively. Shares totaling up to 23.7Mn were traded during the day recording a decrease of 15.95% against the previous trading day. Price losers outpaced the price gainers at a ratio of 101:90. The foreigners appeared to be bearish during the day having recorded inflows for three consecutive trading days resulting in a net foreign outflow of LKR 107.2Mn while extending the year to date net foreign outflow to LKR 194Mn. On the Global Front, the USD closed at a quoted price of LKR 129.05/-.

Close +/- % +/-CSEALL Index 5674.47 4.99 0.09P/E (x) 11.38P/Bv (x) 1.69

2.67

Dividend Yield

SRI LANKA COLOMBO ALL SH

4500

4700

4900

5100

5300

5500

5700

5900

6100

2/27 5/27 8/27 11/27 2/27

Source: Bloomberg

Australia

On Tuesday the Australian share market closed lower but pared back earlier heavy falls. The benchmark S&P/ASX200 index closed down 52.2 points or 1.03 per cent to 5,003.6 points.

Today, the Australian market looks set to open higher after a positive performance on Wall Street buoyed by upbeat earnings results and after Federal Reserve chairman Ben Bernanke said US economic growth had rebounded from the fourth quarter. The SFE Futures 200 is pointing upwards 29 points or 0.58 per cent to 5007.

In economic news on Wednesday, the Australian Bureau of Statistics (ABS) is due to release construction work done, December quarter, figures.

In equities news, Westfield Group and Westfield Retail Trust are due to release full year results, as is Sydney Airport. Prime Media Group, Slater & Gordon, Wotif.com, AGL Energy and UGL are expected to post first half results, while James Hardie Industries is scheduled to release third quarter results.

Close +/- % +/-S&P/ASX 200 INDEX 5036.59 33.03 0.66P/E (x) 20.94P/Bv (x) 1.98

5.66

STANDARD & POORS/ ASX 200 INDEX

Dividend Yield

3800

4000

4200

4400

4600

4800

5000

5200

2/27 5/27 8/27 11/27 2/27

Source: Bloomberg

Hong Kong

Local stocks swung between gain and loss. The HSI and HSCEI rallied 57 points and 40 points to 22577 and 11144 respectively. Market volume was 68.176 billion.

We believe the market is going to consolidate, as some of the technical indicators are showing that the HSI is overbought, investors are suggested to stay on the sidelines and wait for a clear trading signal.

Technically, the HSI is expected to gain a support from 22500 level, major resistance will be 23000 level.

Close +/- % +/-HSI INDEX 22577.01 57.32 0.25P/E (x) 11.35P/Bv (x) 1.49

3.14Dividend Yield

HANG SENG INDEX

17000

18000

19000

20000

21000

22000

23000

24000

25000

2/27 5/27 8/27 11/27 2/27

Source: Bloomberg

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Market News

US The US economy won't collapse when the automatic spending cuts start hitting after tomorrow's deadline. A few economists even say

the sequester and its indiscriminate whack at the budget could eventually help the economy grow faster than it would have otherwise. That's the silver lining. Here are the clouds: the sequester is coming at a particularly inopportune time in the still-fragile US recovery, it promises to bite consumers and business activity quickly, and the Washington area will feel its pain acutely. While the cuts represent a relatively small slice of federal spending - about US$44 billion this year in actual dollars - most forecasters say they are large enough to reduce economic growth by at least half a percentage point for the year. They will kill public- and private-sector jobs and drain precious buying power out of the economy. Forecasters also expect the economy to lose a full point of growth this year from the payroll and income tax increases that lawmakers agreed to in the "fiscal cliff" deal at the end of 2012. And in recent weeks, a new threat to growth has emerged: a sharp rise in petrol prices that many economists had not predicted for this year. (Source: BT Online)

Wall Street may be shrinking - cutting thousands of jobs over the last year - but for those who remain, the pay is still very lucrative. The average cash bonus for those employed in the financial industry in New York last year rose roughly 9 per cent, to US$121,900, Thomas P DiNapoli, New York state's comptroller, said on Tuesday. Cash bonuses in total are forecast to increase by roughly 8 per cent, to US$20 billion this year. The total, however, is down from 2010, when it was US$22.8 billion. Wall Street's peak came in 2006, before the financial crisis, with a total US$34.3 billion in bonuses. The year-end bonus can account for the bulk of a finance professional's annual compensation. The report from the state comptroller's office gives estimates on the bonuses, based on tax withholding data, data from banks and conversations with industry experts. (Source: BT Online)

Singapore Businesses are generally satisfied with the current tax rates in Singapore and are loath to move to another country for lower corporate

tax rates, findings from the Grant Thornton International Report revealed. More than 3,400 companies were surveyed internationally for the report, with 55 Singaporean businesses among them. It said that a minority 26 per cent of businesses in Singapore think the government is not doing enough with tax measures to help ease economic pressures. This compares favourably with the global average of 61 per cent. Ms Michelle Seat, tax director at Foo Kon Tan Grant Thornton LLP, described the low dissatisfaction among Singaporean businesses as "no surprise" given the long-standing business-friendliness of Singapore's tax system. The report also surveyed businesses' willingness to relocate for lower corporate tax rates and found that 66 per cent of businesses in Singapore dismiss the possibility of relocations motivated by lower corporate tax rates, a number in line with the global average of 67 per cent. Numbers for Hong Kong, at 64 per cent, are similar. (Source: BT Online)

Singapore holds the best initial prospects for development as a regional liquefied natural gas (LNG) hub, according to a report compiled by the International Energy Agency (IEA) and presented in Tokyo. A new LNG terminal in Singapore, set to receive its initial cargo from Qatar in the first quarter, will serve a wide array of tankers and boost import capacity "far beyond" domestic consumption, the IEA said. The city-state, Asia's oil-trading centre, is also creating an example for the continent by unbundling transmission from other gas and power infrastructure and taking a "hands off" approach. "Singapore is really quite under way to establish the right infrastructure and the right market mechanisms, although there is still some more to do," Maria van der Hoeven, the IEA's executive director, said in an interview with Bloomberg TV on Tuesday. The body also said that Asia was expected to become the world's second-largest gas market after North America by 2015. The region is forecast to consume 790 billion cubic metres a year of gas by 2015, (Source: BT Online)

Private residence purchases rose in 2012 primarily due to increased demand from public-housing dwellers, according to the latest studies by DTZ Research and R'ST Research, with data from the Urban Redevelopment Authority. According to R'ST Research, 17,590 of the 36,887 private residence transactions across all markets last year, or 48 per cent, involved buyers with HDB addresses. This marked a sharp increase of 17 per cent from the number of such transactions in 2011. The increase in transactions largely took place on the primary market. According to DTZ, the primary market was the only market to see both quarter-on-quarter and year-on-year sales growth, of 12 and 20.7 per cent respectively. The number of transactions rose despite cooling measures last October that capped mortgage loan terms. (Source: BT Online)

Hong Kong

For the first time, China’s yuan has overtaken the Russian ruble for transactions in the global payment system, according to Society for Worldwide Interbank Financial Telecommunication, a financial messaging platform. The use of the yuan increased 24 percent in January from December and 171 percent from a year ago, while that of the ruble declined 5.4 percent on the month, the Belgium-based SWIFT said in a report today. The Chinese currency accounted for an all-time high of 0.63 percent of the global payments, making it the 13th most-used currency, compared with 0.56 percent for the ruble, now the 15th most-used. The euro leads the list, followed by the U.S. dollar and British pound. (Source: Bloomberg)

Almost half of China’s provinces are setting their growth sights lower in the wake of the central government’s emphasis on the quality of

expansion over speed, a sign of an increased focus on tackling rising debt. Fourteen provinces have set lower targets for gross domestic product expansion this year than in 2012 and the other 17 left their goals unchanged, according to Nomura Holdings Inc. The weighted average target has dropped to 9.9 percent from 10.3 percent, Citigroup Inc. calculates. (Source: Bloomberg)

Hong Kong Exchanges & Clearing Ltd.’s expansion into new asset classes means slowing initial public offerings aren’t a concern, said

Charles Li, chief executive of the No. 1 bourse operator by market value. IPOs and average daily trading volumes reflect market sentiment, which is why the company is entering new asset classes, including commodities, Li told Bloomberg Television’s Susan Li. Hong Kong Exchanges bought the London Metal Exchange, which handles trading of 83 percent of global base metals futures, for $2.2 billion in December. (Source: Bloomberg)

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Thailand Foreign investors remained net sellers of Thai shares worth Bt204.03mn on Wed. (Source: Bisnews) The cabinet approved a Bt2trn transport infrastructure investment plan and a bill authorizing loans amounting to Bt2trn is expected to be

presented to the cabinet for approval by mid-Mar 2013 and then to the parliament for its first reading in late Mar. (Source: Bisnews) Thailand’s exports in Jan 2013 rose 16.09% y-y to US$18,269mn while imports during the same period jumped 40.87% y-y to

US$23,755mn, leaving the country with a trade deficit of around US$5.49bn, according to data from the Ministry of Commerce. (Source: Bisnews)

The Energy Ministry said PTT will delay its scheduled maintenance shutdown plan for three gas separation plants in Rayong Province to May 2013 from Feb and Mar to alleviate the impact of the looming gas supply shortage due to a maintenance of a gas platform in Myanmar during Apr 5-14, 2013. (Source: Bisnews)

Indonesia Bank Indonesia (BI) will raise interest rate benchmark (BI rate) if the intervention instrument of foreign exchange (forex) and export

revenue (DHE) do not optimally improve the current account. However, BI sees currently it is not necessary to raise BI rate yet. Governor of Bank Indonesia, said that until now BI uses foreign exchange intervention and optimizes instrument of export revenue to strengthen the balance of payments. If two instruments are not effective, the central bank will raise interest rates. Now the fundamental of those two policies is still strong, so the rise in interest rates is not needed. (Source: Indonesia Finance Today)

Gradual improvement on global economic conditions is estimated to cause 2013 economic growth prospective to rise again. This year economic growth is estimated to reach 6.5 percent, 0.3 percent higher than 2012 realization’s 6.23 percent. Senior Economist and Head of Government Relations, Standard Chartered Bank Indonesia, said global economic which starts improving pushes increases in several sectors contributing towards Indonesia’s economy. Such increase is driven by export commodity price hike. (Source: Indonesia Finance Today)

In order to evenly distribute cigarette tax proceeds to people, the government will return 10 percent of cigarette tax direct ly to provinces by 2014. This move is deemed as improvement from two-percent revenue sharing scheme for cigarette-producing areas which during the period is less effective. Division Head of Second Customs and Excise Policy at the Ministry of Finance, said the return of 10 percent cigarette tax to provinces is expected to set cigarette tax proceeds more distributed to provinces, particularly areas which during the period are places for selling cigarettes. (Source: Indonesia Finance Today)

Sri Lanka Sri Lanka's Treasuries yields were flat at today’s auction with the 3-months with 18.7 billion rupees in bids being accepted from the

market after 15.0 billion rupees of maturing bills being offered. The 3-month yield eased 01 basis point to 9.09 percent, the 6-month yield was unchanged at 10.08 percent and the 12-month yield was also flat at 11.10 percent. Five year gilts maturing on 01.04.2018 were quoted in the market at around 11.15/20 percent, up from yesterday's 11.10/15 levels. Sri Lanka's risk free yield curve was inverted a few months back. Meanwhile bank deposit rates remains high, with some state banks paying as much as 17 percent for one year bills. December credit data showed heavy borrowings by the state from banks, crowding out private borrowers. (lbo.lk)

Growth in consumer electronics imports to Sri Lanka have slowed following a fall in the exchange rate and higher interest rates and China has increased its share. Sri Lanka's Ceylon Chamber of Commerce mentioned, machinery and mechanical appliances classified under chapter 84 of the international harmonized customs code system grew 19 percent in 2012 slowing from a 66 percent growth in 2011. Electronic machinery and equipment (HS code Chapter 85) increased 18 percent in 2012 slowing from a 57 percent increase in 2012. The Ceylon Chamber mentioned that China's market share grown to 34 percent in 2012 from 25 percent in 2011. India came in second place with 11 percent. Sri Lanka experienced a large volume of unsustainable imports from mid-2011 due to an expansion during a balance of payments crisis which was largely triggered by state credit taken to subsidize imported energy. From mid-July to December 2012, Sri Lanka's central bank injected 167 billion rupees of new money in to the banking systems in the course of sterilizing foreign exchange sales and keep interest rates low, creating unsustainable consumption and import demand. (lbo.lk)

Australia Business is urging the Gillard government to use the May budget to ease English language requirements for foreign workers on 457

visas, declaring the program is a crucial economic "shock absorber". In a submission to be released today, the Australian Industry Group also calls for measures to lift the capability of school teachers, including by broadening ways to enter the profession. Source: The Australian

Woolworths’ net profit rose 19.4 per cent to $1.15 billion in the six months ending December, underpinned by higher food and liquor margins and booming profits from poker machines. The result would have been higher if not for losses from the retailer’s Masters home improvement joint venture and one-off costs of $94.2 million associated with the sale of Dick Smith and the spin-off of property assets last year. Woolworths booked a net $231 million in one-off costs in the December half 2012. Underlying net profit before one-off costs rose 5.5 per cent to $1.25 billion, just short of market consensus forecasts around $1.26 billion. Woolworths upgraded its full year guidance and is now forecasting 4 to 6 per cent net profit growth before one-off costs on a 52 week basis compared with its previous forecast of 3 to 6 per cent. “The company appears well-placed to deliver a result towards the top end of guidance,” said Citigroup analyst Craig Woolford. Source: The Australian

Rolling back family tax benefits extended to mostly single-income families could save the federal budget $2 billion a year, new economic modelling has shown. As the Gillard government considers a range of deep budget cuts to pay for its multi-billion-dollar disability insurance and school funding reforms, the National Centre for Social and Economic Modelling has identified massive savings from tightening eligibility for Family Tax Benefit Part B. Source: The Australian

Regional Market Focus

28 February 2013

8 of 16

81.60 -0.33% 292.90 -0.11%

113.38 -1.50% 1.901 +0.02%

1,597.40 +0.01% 14,075.37 +1.26%

549.53 +0.46% MSCI SEA 895.10 +0.15%

2,611.89 +1.61% 53.3

Dollar Index

Gold (US$/Oz)

ThomReuters/JefferiesCRB

DJI

Crude oil, Brent (US$/bbl) US Treasury 10yr Yield

Euro Stoxx 50

Source: Bloomberg

MSCI Asia x-Japan

JPM Global Composite PMI SA

1.20

1.40

1.60

1.80

2.00

2.20

2.40

Feb

-12

Mar-1

2

Apr-1

2

May-1

2

Jun-1

2

Jul-1

2

Aug-12

Sep-12

Oct-1

2

Nov-12

Dec-12

Jan-1

3

700

750

800

850

900

Feb

-12

Mar-1

2

Apr-1

2

May-1

2

Jun-1

2

Jul-1

2

Aug-12

Sep-12

Oct-1

2

Nov-12

Dec-12

Jan-1

3

11,000

12,000

13,000

14,000

Feb

-12

Mar-1

2

Apr-1

2

May-1

2

Jun-1

2

Jul-1

2

Aug-12

Sep-12

Oct-1

2

Nov-12

Dec-12

Jan-1

3

2,0002,1002,2002,3002,4002,5002,6002,7002,800

Feb

-12

Mar-1

2

Apr-1

2

May-1

2

Jun-1

2

Jul-1

2

Aug-12

Sep-12

Oct-1

2

Nov-12

Dec-12

Jan-1

3

48

49

50

51

52

53

54

55

56

Feb

-12

Mar-1

2

Apr-1

2

May-1

2

Jun-1

2

Jul-1

2

Aug-12

Sep-12

Oct-1

2

Nov-12

Dec-12

Jan-1

3

1,500

1,600

1,700

1,800

Feb

-12

Mar-1

2

Apr-1

2

May-1

2

Jun-1

2

Jul-1

2

Aug-12

Sep-12

Oct-1

2

Nov-12

Dec-12

Jan-1

3

Feb

-13

78

80

82

84

Feb

-12

Ma

r-12

Apr-1

2

Ma

y-12

Jun-1

2

Jul-1

2

Aug-1

2

Sep-1

2

Oct-1

2

Nov-1

2

Dec-1

2

Jan-1

3

260

280

300

320

340

Feb

-12

Ma

r-12

Apr-1

2

Ma

y-12

Jun-1

2

Jul-1

2

Aug-1

2

Sep-1

2

Oct-1

2

Nov-1

2

Dec-1

2

Jan-1

3

90

100

110

120

130

Feb-1

2

Mar-1

2

Apr-1

2

May-1

2

Jun-1

2

Jul-1

2

Aug

-12

Sep

-12

Oct-1

2

Nov-1

2

Dec-1

2

Jan-1

3

440

460

480

500

520

540

560

580

Feb

-12

Mar-1

2

Apr-1

2

May-1

2

Jun-1

2

Jul-1

2

Aug-12

Sep-12

Oct-1

2

Nov-12

Dec-12

Jan-1

3

Regional Market Focus

28 February 2013

9 of 16

Valuations of Major Regional Markets

14.7 1.43

13.9 2.47

10.9 1.49

15.1 3.05

15.4 1.99

Source: Bloomberg

Hang Seng Index, P/B (X)

S&P/ASX 200 Index, Forward P/E (X) S&P/ASX 200 Index, P/B (X)

Jakarta Stock Exchange Composite Index, P/B (X)

Straits Times Index, Forward P/E (X)

Hang Seng Index, Forward P/E (X)

Straits Times Index, P/B (X)

Stock Exchange of Thailand, Forward P/E (X) Stock Exchange of Thailand, P/B (X)

Jakarta Stock Exchange Composite Index,

10

12

14

16

18

Dec-0

9

Ma

r-10

Ju

n-1

0

Se

p-1

0

Dec-1

0

Ma

r-11

Ju

n-1

1

Se

p-1

1

Dec-1

1

Ma

r-12

Ju

n-1

2

Se

p-1

2

Dec-1

2

1.0

1.2

1.4

1.6

1.8

2.0

Dec-0

9

Ma

r-10

Ju

n-1

0

Se

p-1

0

Dec-1

0

Ma

r-11

Ju

n-1

1

Se

p-1

1

Dec-1

1

Ma

r-12

Ju

n-1

2

Se

p-1

2

Dec-1

2

1.0

1.5

2.0

2.5

Dec-0

9

Ma

r-10

Ju

n-1

0

Se

p-1

0

Dec-1

0

Ma

r-11

Ju

n-1

1

Se

p-1

1

Dec-1

1

Ma

r-12

Ju

n-1

2

Se

p-1

2

Dec-1

2

8

10

12

14

16

Dec-0

9

Ma

r-10

Ju

n-1

0

Se

p-1

0

Dec-1

0

Ma

r-11

Ju

n-1

1

Se

p-1

1

Dec-1

1

Ma

r-12

Ju

n-1

2

Se

p-1

2

Dec-1

2

1.01.21.41.61.82.02.2

Dec-0

9

Ma

r-10

Ju

n-1

0

Se

p-1

0

Dec-1

0

Ma

r-11

Ju

n-1

1

Se

p-1

1

Dec-1

1

Ma

r-12

Ju

n-1

2

Se

p-1

2

Dec-1

2

8

10

12

14

16

Dec-0

9

Ma

r-10

Ju

n-1

0

Se

p-1

0

Dec-1

0

Ma

r-11

Ju

n-1

1

Se

p-1

1

Dec-1

1

Ma

r-12

Ju

n-1

2

Se

p-1

2

Dec-1

2

2.22.42.62.83.03.23.43.6

Dec-0

9

Ma

r-10

Ju

n-1

0

Se

p-1

0

Dec-1

0

Ma

r-11

Ju

n-1

1

Se

p-1

1

Dec-1

1

Ma

r-12

Ju

n-1

2

Se

p-1

2

Dec-1

2

10

12

14

16

18

20

Dec-0

9

Ma

r-10

Ju

n-1

0

Se

p-1

0

Dec-1

0

Ma

r-11

Ju

n-1

1

Se

p-1

1

Dec-1

1

Ma

r-12

Ju

n-1

2

Se

p-1

2

Dec-1

2

1.4

1.6

1.8

2.0

2.2

Dec-0

9

Ma

r-10

Ju

n-1

0

Se

p-1

0

Dec-1

0

Ma

r-11

Ju

n-1

1

Se

p-1

1

Dec-1

1

Ma

r-12

Ju

n-1

2

Se

p-1

2

Dec-1

2

8

10

12

14

16

18

Dec-0

9

Ma

r-10

Ju

n-1

0

Se

p-1

0

Dec-1

0

Ma

r-11

Ju

n-1

1

Se

p-1

1

Dec-1

1

Ma

r-12

Ju

n-1

2

Se

p-1

2

Dec-1

2

Regional Market Focus

28 February 2013

10 of 16

Source: Bloomberg

World Index

JCI 1.14% 4,716.42

HSI 0.25% 22,577.01

KLCI 0.00% 1,624.14

NIKKEI -1.27% 11,253.97

KOSPI 0.20% 2,004.04

SET -0.80% 1,518.05

SHCOMP 0.87% 2,313.22

SENSEX 0.72% 19,152.41

ASX 0.66% 5,036.59

FTSE 100 0.88% 6,325.88

DOW 1.26% 14,075.37

S&P 500 1.27% 1,515.99

NASDAQ 1.04% 3,162.26 COLOMBO 0.09% 5,674.47

STI 0.21% 3,261.12

Regional Market Focus

28 February 2013

11 of 16

Date Statistic For Survey Prior Date Statistic For Survey Prior

2/28/2013 GDP QoQ (Annualized) 4Q S 0.50% -0.10% 2/28/2013 M1 Money Supply (YoY) Jan -- 9.00%

2/28/2013 Personal Consumption 4Q S 2.30% 2.20% 2/28/2013 M2 Money Supply (YoY) Jan -- 7.20%

2/28/2013 GDP Price Index 4Q S 0.60% 0.60% 2/28/2013 Credit Card Bad Debts Jan -- 19.1M

2/28/2013 Core PCE QoQ 4Q S 0.90% 0.90% 2/28/2013 Credit Card Billings Jan -- 3694.5M

2/28/2013 Initial Jobless Claims 23-Feb 360K 362K 2/28/2013 Bank Loans & Advances (YoY) Jan -- 16.70%

2/28/2013 Continuing Claims 16-Feb 3140K 3148K 3/4/2013 Electronics Sector Index Feb -- 49.9

2/28/2013 NAPM-Milw aukee Feb 52 51.3 3/4/2013 Purchasing Managers Index Feb -- 50.2

2/28/2013 Chicago Purchasing Manager Feb 54 55.6 04-08 MAR Foreign Reserves Feb -- $258.84B

2/28/2013 Bloomberg Consumer Comfort 24-Feb -- -33.4 3/6/2013 Automobile COE Open Bid Cat A 6-Mar -- 78301

3/1/2013 Kansas City Fed Manf. Activity Feb -1 -2 3/6/2013 Automobile COE Open Bid Cat B 6-Mar -- 92667

3/1/2013 Personal Income Jan -2.40% 2.60% 3/6/2013 Automobile COE Open Bid Cat E 6-Mar -- 91910

3/1/2013 Personal Spending Jan 0.20% 0.20% 3/12/2013 Singapore Manpow er Survey 2Q -- 10%

3/1/2013 PCE Deflator (MoM) Jan 0.10% 0.00% 3/15/2013 Unemployment Rate (sa) 4Q F -- 1.80%

3/1/2013 PCE Deflator (YoY) Jan 1.20% 1.30% 3/15/2013 Retail Sales Ex Auto (YoY) Jan -- -0.40%

3/1/2013 PCE Core (MoM) Jan 0.20% 0.00% 3/15/2013 Retail Sales (YoY) Jan -- -1.50%

Date Statistic For Survey Prior Date Statistic For Survey Prior

2/28/2013 Total Exports YOY% Jan -- 13.60% 2/28/2013 Govt Mthly Budget Surp/Def HK$ Jan -- 51.7B

2/28/2013 Total Exports in US$ Million Jan -- $17955M 2/28/2013 Money Supply M1 - in HK$ (YoY) Jan -- 15.90%

2/28/2013 Total Imports YOY% Jan -- 1.30% 2/28/2013 Money Supply M2 - in HK$ (YoY) Jan -- 12.10%

2/28/2013 Total Imports in US$ Million Jan -- $17672M 2/28/2013 Money Supply M3 - in HK$ (YoY) Jan -- 12.10%

2/28/2013 Total Trade Balance Jan -- $283M 3/4/2013 Retail Sales - Value (YoY) Jan -- 8.80%

2/28/2013 Current Account Balance (USD) Jan $477M $730M 3/4/2013 Retail Sales - Volume (YoY) Jan -- 8.10%

2/28/2013 Overall Balance in US$ Million Jan -- $799M 3/5/2013 Purchasing Managers Index Feb -- 52.5

2/28/2013 Business Sentiment Index Jan -- 50.6 3/7/2013 Foreign Currency Reserves Feb -- $321.0B

2/28/2013Mfg. Production Index ISIC NSA

(YoY)Jan 12.4 23.4 3/14/2013 Industrial Production (YoY) 4Q -- -0.10%

2/28/2013 Mfg. Production Index ISIC SA Jan -- 185.31 3/14/2013 Producer Price (YoY) 4Q -- -1.50%

2/28/2013 Total Capacity Utilization ISIC Jan -- 63.8 3/14/2013 Hong Kong Manpow er Survey 2Q -- 12%

3/1/2013 Consumer Price Index (YoY) Feb 3.30% 3.39% 15-19 MAR Composite Interest Rate Feb -- 0.28%

3/1/2013 Consumer Price Index NSA (MoM) Feb 0.30% 0.16% 3/18/2013 Unemployment Rate SA Feb -- 3.40%

3/1/2013 Core CPI (YoY) Feb 1.60% 1.59% 3/21/2013 CPI - Composite Index (YoY) Feb -- 3.00%

3/1/2013 Foreign Reserves 22-Feb -- $179.7B 3/21/2013 Bal of Paymts - Current A/C 4Q -- $29.21B

Source: BloombergSource: Bloomberg

Source: Bloomberg

Thailand Hong Kong

Source: Bloomberg

US Singapore

Economic Announcement

Regional Market Focus

28 February 2013

12 of 16

Date Statistic For Survey Prior Date Statistic For Survey Prior

3/1/2013 HSBC-Markit Manufacturing PMI Feb -- 49.7 2/28/2013 CPI Moving Average (YoY) Feb -- 8.10%

3/1/2013 Inflation NSA (MoM) Feb -- 1.03% 2/28/2013 CPI (YoY) Feb -- 9.80%

3/1/2013 Inflation (YoY) Feb -- 4.57% 05-20 MAR Exports YoY% Jan -- -6.70%

3/1/2013 Exports (YoY) Jan -- -9.80% 05-20 MAR Imports YoY% Jan -- -19.40%

3/1/2013 Total Imports (YoY) Jan -- -5.60% 3/15/2013 Repurchase Rate 15-Mar -- 7.50%

3/1/2013 Core Inflation (YoY) Feb -- 4.32% 3/15/2013 Reverse Repo Rate 15-Mar -- 9.50%

3/1/2013 Total Trade Balance Jan -- -$155M 15-28 MAR GDP (YoY) 4Q -- 4.80%

01-05 MAR Danareksa Consumer Confidence Feb -- 94.9 3/28/2013 CPI Moving Average (YoY) Mar -- --

01-11 MAR Consumer Confidence Index Feb -- 116.2 3/28/2013 CPI (YoY) Mar -- --

01-11 MAR Money Supply - M1 (YoY) Jan -- 16.40% 05-19 APR Exports YoY% Feb -- --

01-11 MAR Money Supply - M2 (YoY) Jan -- 14.90% 05-19 APR Imports YoY% Feb -- --

04-07 MAR Foreign Reserves Feb -- $108.78B 4/9/2013 Repurchase Rate 9-Apr -- --

04-07 MAR Net Foreign Assets (IDR Tln) Feb -- 1021.36T 4/9/2013 Reverse Repo Rate 9-Apr -- --

3/7/2013 Bank Indonesia Reference Rate 7-Mar -- 5.75% 4/30/2013 CPI Moving Average (YoY) Apr -- --

11-20 MAR Total Local Auto Sales Feb -- 96704 4/30/2013 CPI (YoY) Apr -- --

Date Statistic For Survey Prior

2/28/2013 HIA New Home Sales (MoM) Jan -- 6.20%

2/28/2013 Private Capital Expenditure 4Q 1.00% 2.80%

2/28/2013 Private Sector Credit MoM% Jan 0.30% 0.40%

2/28/2013 Private Sector Credit YoY% Jan 3.70% 3.60%

3/1/2013 AiG Performance of Mfg Index Feb -- 40.2

3/1/2013 RPData-Rismark House PX Actual Feb -- 1.20%

3/1/2013 RBA Commodity Price Index Au Feb -- 90.3

3/1/2013 RBA Commodity Index SDR YoY% Feb -- -6.40%

3/4/2013 TD Securities Inflation MoM% Feb -- 0.30%

3/4/2013 TD Securities Inflation YoY% Feb -- 2.50%

3/4/2013 Building Approvals (MoM) Jan -- -4.40%

3/4/2013 Building Approvals (YoY) Jan -- 9.30%

3/4/2013 Company Operating Profit QoQ% 4Q -- -2.90%

3/4/2013 Inventories 4Q -- 1.10%

3/4/2013 ANZ Job Advertisements (MoM) Feb -- -0.90%

Source: Bloomberg

Indonesia

Australia

Sri Lanka

Source: Bloomberg Source: Bloomberg

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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

Phillip Securities (HK) Ltd

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

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

Website : www.poems.com.hk

THAILAND

Phillip Securities (Thailand) Public Co Ltd

15/F, Vorawat Building 849 Silom Road

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

Website : www.poems.in.th

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

UNITED KINGDOM King & Shaxson Ltd

6th Floor, Candlewick House

120 Cannon Street London EC4N 6AS

Tel : (44) 207 426 5950 Fax : (44) 207 626 1757

Website : www.kingandshaxson.com