Regional Morning Notes

UOBKayHian Regional Morning Notes Monday, July 12, 2010 Refer to last page for important disclosures. Page 1 of 25 REGIONAL Sector Container Shipping Page 3 Valuations lag behind strong earnings momentum; expect imminent sector re-rating. CHINA Economics External Trade Page 5 Exports reach historical high in June, but face downside risk in 2H10. Sector Banking Page 7 June new loans of Rmb603.4b beat market estimates again. Consumer Page 9 This week, we talk about the sportswear sector, and discuss how much is Nike’s threat to domestic brands. HONG KONG Sector Property Page 11 New project, Lime Stardom, is selling well, with demand from both investors and home buyers. It remains to be seen how long this rebound will last. INDONESIA Sector Banking Page 13 Reiterate OVERWEIGHT as we believe the sector is on the sweet spot for faster growth and healthier performance. MALAYSIA Update Mah Sing (BUY/RM1.69/Target: RM2.32) Page 15 Bigger and still fast. SINGAPORE Sector Banking Page 18 Rising interest rates. BUY laggard DBS. Property Page 20 Property Nuggets: Office – Rising pre-commitment levels. KEY STORY Regional Container Shipping Page 3Valuations lag behind strong earnings momentum; expect imminent sector re-rating. Thailand Thanachart Capital (BUY/Bt30.25/Target: Bt43.00) Page 22Expect robust results in 2Q10, backed by organic and inorganic growth. Upgrade 2010 net profit estimate by 30% and raise target price to Bt43.00. Key Indices Prev Close 1D % 1W %1M % YTD %DJIA 10198.0 0.6 4.8 (0.1) (2.2) S&P 500 1078.0 0.7 4.9 (1.2) (3.3) FTSE 100 5132.9 0.5 6.1 (0.6) (5.2) AS30 4414.5 0.9 3.5 (2.3) (9.6) CSI 300 2647.1 2.8 4.5 (4.1) (26.0) FSSTI 2917.2 0.7 2.6 4.3 0.7 HSI 20378.7 1.6 2.4 2.5 (6.8) JCI 2943.9 1.0 2.5 5.1 16.2 KLCI 1324.3 0.6 1.3 2.3 4.0 KOSPI 1723.0 1.4 3.1 2.8 2.4 Nikkei 225 9585.3 0.5 4.1 (1.2) (9.1) SET 820.6 0.4 2.2 6.6 11.7 TWSE 7647.3 0.5 4.3 4.8 (6.6) BDI 1902 (2.0) (16.6) (45.9) (36.7) CPO (RM/mt) 2400 (0.3) (1.4) (5.7) (7.4) Nymex Crude (US$/bbl) 76 0.2 5.7 3.4 (3.9) Source: Bloomberg Top BUYs/SELLs Current Target Pot. +/- Price Price (%) Ticker (lcy) (lcy) Top BUYs China Merchants Bk 3968 HK 19.36 26.50 36.9 CNOOC 883 HK 13.02 17.80 36.7 Hong Leong Bank HLBK MK 8.75 10.00 14.3 WCT WCT MK 2.76 3.40 23.2 OCBC OCBC SP 8.98 12.42 38.3 SATS SATS SP 2.80 3.60 28.6 Swiber SWIB SP 1.01 1.54 52.5 Bangkok Bank BBL TB 128.00 161.00 25.8 PTT PTT TB 248.00 325.00 31.0 Top SELLs Top Glove TOPG MK 13.80 10.23 (25.9) TMB Bank TMB TB 1.70 0.63 (62.9)