MCI (P) 137/11/2012 Ref No: RM2013_0060 1 of 18

Regional Market Focus

Phillip Securities Research Pte Ltd

28 March 2013

Singapore

REIT Sector – Update

Year-to-date, S-REIT continued to beat the broad market (4.6%) by a margin, registering price return of 5.2%

S-REIT yield spread and forward dividend yield remain appealing compared to some developed REIT markets

PLife REIT is our top pick as it would benefit from elevated inflation and possible new acquisitions

Thailand

Thai Tap Water – Company Update Recommendation: ACCUMULATE Previous close: Bt11 Fair value: Bt11.10

Total sales volume grew 3.57% y-y in the first two months of 2013 while average water tariff increased by 1.95%. The sooner than expected summer season is likely to boost consumption demand.

New investment projects remains on the table, though it appears to be a lack of development at the moment; however the business venture in Myanmar seems to shape up.

We revise down our CY13 earnings outlook as an adjustment of water tariff was a tepid below expectation.

We rate TTW an ‘ACCUMULATE’ with a target price of Bt11.10/share.

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Hong Kong

BYD(1211 HK) – May see a performance inflection point in 2013 Recommendation: ACCUMULATE Previous close: HK$25.15 Fair value: HK$29.00

Under the burden of solar photovoltaic business, FY2012 net profit down by over 90%: BYD reported operating revenue of about RMB 44.38 billion in 2012, 4.2% down on YoY basis. Income growth of the three major businesses is slower than costs growth, and overall gross profit rate dropped by 3.3ppts to 11.55%. Huge loss of solar photovoltaic business swallowed profits. Core business of the Company recorded nearly RMB 300 million of operational losses. Fortunately, RMB 970 million of government subsidy and other income rescued the final profit (RMB 81.37 million, down 94.12% on YoY basis) from losses. EPC is RMB 0.03 as compared with RMB 0.6 in 2011.

Structural improvement of auto business and high takeoff potential in 2013: Auto sales for the year rose slightly by 2.3%, i.e. 456,000 cars (where the export increased by 39% to 24,000 cars). YoY increase of income grows by 1.88% to RMB 22.55 billion. Driven by hotter new car sales and upgrading vehicle structure, the average unit price is promoted by 9.3%. However, due to improvement of spare part quality, growth of purchase costs drives gross profit slightly down. We believe that the Company will gain rewards by the measures for improvement of product quality: in the 4th quarter in 2012, auto sales well started to bottom out with a significant YoY increase of 24.6%, while in the first two months of 2013; auto sales reached 91,000 with a YoY increase of 27.9%, faster than the industrial average. Through three years of adjustment and gradual improvement of sales channels, gradual release of key vehicles (Sirui as the upgrading model of F6, high-end SUV S7, the second-generation dual-mode electric vehicle, Qin, and the pure electrical vehicle jointly manufactured with Daimler, Denza) will lay a foundation for further takeoff of car business of the Company.

Rapid development of new energy vehicles by zero down payment pattern: In terms of new energy vehicles, the pure electric vehicle, E6, to be sold in Hong Kong had sales of about 1700 sets in 2012, in addition to 262 electric buses, K9, and 1,201 sets of F3DM. In November 2012, the Company launched the business pattern of “Zero Down Payment” in consideration of high initial purchase price of electric vehicles. In addition to the good demonstration effect of the vehicles under trial operation and new energy subsidy policy to be promulgated in April-May, we believe that new energy vehicles of the Company may develop by a higher speed and further improve the profitability of the Company.

IT business: Accumulative input of the Company to photovoltaic business has been over RMB 3 billion. Sluggish industrial demand causes much loss for assets diminution. Most inventory diminution of the Company’s photovoltaic business in 2012 has been withdrawn. 500MW photovoltaic power station project under the contract with Yulin, Shaanxi, will expectedly be put into construction in 2013. The construction will effectively improve production capacity utilization. It is expected that photovoltaic business will significantly ease its burden on performance of the Company in 2013. Mobile business of the Company has a poor performance in 2012, because new product models of key customers have not been put into mass production. The Company will further expand new customers, new models and market demand. We expect that the two businesses will grow steady in 2013.

Valuation: On basis of stabilizing auto sales, optimizing car models and decreasing photovoltaic burden, we believe that the Company has survived the hardest period. With effect of new car models, it is expected that auto business will achieve a growth of over 20% in 2013. The Company may usher in a further takeoff of profit improvement. It is expected that in 2013 and 2014, net profit of the Company will be RMB 820 million and 1.59 billion. The target price is HKD 29, equivalent to 66 and 34 times of the expected PE ratio, and 2.44 and 2.24 times of expected PB ratio in 2013, 2014 respectively, hence “accumulate” rating.

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Strategy Views

- Country Strategy: S’pore, 8 Mar / Thai, 8 Mar / China & HK, 28 Jan - Global Macro, Asset Strategy: US, 20 Mar / 4 Mar, Update / 24 Jan, Update / 4 Jan / ASEAN, 5 Dec

Morning Commentary - STI: +0.75% to 3313.03 - SET: +1.09% to 1560.9 - JCI: +1.77% to 4928.1 - KLCI: +0.89% to 1667.6 - HSCEI: +0.99% to 11033.6 - Hang Seng: +0.69% to 22464.8 - Nikkei 225: +1.08% to 12493.8 - ASX200: -0.28% to 3367.3 - India NIFTY: +0.14% to 5641.6 - S&P500: -0.06% to 1562.9 MARKET OUTLOOK: By Ng Weiwen, Macro Analyst Today, Cypriot banks re-open. And markets (including US markets which ended flat yesterday) will be paying close attention on that front. Already, the fx market is not too optimistic with EUR/USD breaking below key support of 1.28 and renewed selling pressure could see the EUR/USD test the Nov 2012 low of 1.2657. Capital controls are enacted and we reckon it is likely to stay there for a long time (as was in the case of Iceland). Cyprus is also on the brink of a potential credit rating downgrade. Specifically, FitchRatings has placed its credit rating on Cyprus on watch for a potential downgrade from its current B rating after S&P downgraded Cyprus’ credit rating by one notch to CCC last week. Note the black swan event lingering at the backdrop. Admittedly, though not entirely an unknown unknown. Geopolitical tensions are heightened with Pyongyang's recent aggressive rhetoric escalating to putting its artillery forces on high alert. But markets have deemed North Korea’s threats to be empty and generally shrugged it off thus far. In Singapore, the STI registered another bullish marubozu for the second consecutive day. STI is likely to challenge the 3320 resistance so long as it stays above key support at 3250. The Nikkei 225 is confronted with strong resistance at the 12,500 level amid a tight consolidation range. For the Nikkei rally to continue, the bulls need to take the index across the 12,500 minor resistance level and the USDJPY need to resume its climb above the 95 level. Next major event risk will be BoJ’s 3

rd – 4

th April monetary policy meeting.

Downward bias for the HSI, HSCEI and CSI 300. Note the bearish pin bar as at yesterday’s close as well as the bearish short-term moving average cross over. In Malaysia, the KLCI gapped up on Tues and surged higher as the 13th GE draws nearer. Market sentiment seemed to be cautiously bullish at this juncture. Philippines' sovereign rating was upgraded to investment grade by Fitch on account of strong external balance as well as robust economic growth. Reckon S&P and Moody's are likely to follow suit soon. In the near term, Philippines could see larger capital inflows as the upgrade opens up a pool of potential investors. But Philippines will be confronted with challenges such as managing a stronger peso as well as risks of an asset bubble if not managed prudently. On balance, the market reaction is likely to be muted as the writing is already on the wall. Specifically, we raised the possibility of Philippines achieving investment grade as early as last year in our ASEAN macro strategy report. Since then, Philippines equities have already rallied quite a fair bit and govt bond yields have fallen below many other investment grade sovereigns (with dubious credit quality). (All equity indices mentioned in this note are tradable with Phillip CFDs or ETFs)

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MACRO DATA: In US, the pending home sales index slipped 0.4% sa m-m in Feb. But that should be seen as a minor pullback from the 3.8% increase in the preceding month. On the whole, the housing market recovery is still gaining traction. In Euro zone, economic confidence fell to 90 in Mar, compared to the market expected 90.5 reading, after the 91.1 reading in Feb. The case is worsened by the concern over Cyprus. A gauge of sentiment among European manufacturers declined to minus 12.5 from minus 11.3 in February. An indicator of services confidence fell to minus 6.7 from minus 5.3, while consumer sentiment improved to minus 23.5 from minus 23.6. The euro-zone economy has contracted for five consecutive quarters, and the ECB sees the economy shrinking 0.5% in 2013. In Germany, the largest economy in Euro zone, consumer survey shows that a gauge for the nation’s consumer confidence remain unchanged in Apr at 5.9, the level it reached in Mar. In UK, disposable income fell by 0.1% q-q in 4q12, marking a fall for 4th consecutive quarter, underlining the pressure on consumer spending. The revised data for GDP by expenditures shows that Business investment fell by 0.8% q-q in the quarter instead of the 1.2% q-q decline previously estimated, and that consumer spending rose 0.4 percent instead of 0.2 percent. Exports fell 1.6% and net trade contributed 0.2 percentage point of the overall decline in GDP, suggesting exporters are seeing little benefit from the pound’s decline. The economy is standing on the brink of another recession and hampering the government’s efforts to narrow the budget deficit. In South Korea, consumer confidence rose to 104 in Mar, after the 102 reading in Feb, indicating an improving consumer sentiment. The weak Yen from Japan’s aggressive loosening is likely to continue weighing on South Korea’s exports, and we expect the bank of Korea to cut the benchmark rate by a 25 bps to 2.5% in the near term.

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Singapore The benchmark STI closed above the psychological resistance level of 3,300 to

3,313.03 (+0.75%). The 3.1bn shares traded were worth S$1.7bn in value. Our analyst reiterated his positive view on PLife REIT (Accumulate, TP: S$2.45)

and found the S-REIT sector’s dividend yield and spreads as attractive relative to other developed REIT markets. Prior to market opening, Keppel Corp. (Accumulate, TP: S$12.38) announced that its Offshore & Marine division clinched a contract worth US$820mn for the construction of four jackup rigs.

Top picks for the year are Pan United (Buy, TP: S$1.21), SIAEC (Buy, TP: S$6.10) & Boustead Singapore (Buy, TP: S$1.80). 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. SIAEC is a key beneficiary of the aviation growth story in the region and offers excellent dividend yields. There are hidden gems within Boustead Singapore and we believe that the stock would continue to re-rate as the market appreciates the economic moat in its businesses.

Close +/- % +/-FSSTI 3313.03 24.50 0.75P/E (x) 10.93P/Bv (x) 1.48

2.84Dividend Yield

STRAITS TIMES INDEX

2500

2700

2900

3100

3300

3500

3/27 6/27 9/27 12/27 3/27

Source: Bloomberg

Thailand The composite SET index extended its winning streak for a third straight session

on Wed on better-than-expected economic data from the US and buying orders from the newly launched trigger funds.

Even though Thai stocks staged a strong rebound after last week’s steep correction driven by institutional end-of-quarter window dressing, buying orders from the newly launched trigger funds and return of foreign buying, we however believe the absence of strong positive catalysts in the near term may leave the market vulnerable to volatility triggered by more bouts of short-term profit taking. For the meantime, the market’s focus remained on Europe’s debt crisis, especially the reopening of Cyprus banks today and Italy’s political stalemate, which dampened investment confidence and pushed up bond yields. In Thailand, the parliament will begin debate on the Bt2trn infrastructure development loan bill today while the resurgence of the baht’s strength may likely pile more pressure on the Bank of Thailand’s Monetary Policy Committee at its meeting next week.

The short-term strategy is still to be selective in stocks. Investors may raise equity holdings back to 50% of the short-term trading portfolio if the composite SET index closes above 1550.

Today we peg resistance for the SET index at 1570-1586 and support at 1553-1540.

Close +/- % +/-SET INDEX 1560.87 16.84 1.09P/E (x) 17.91P/Bv (x) 2.53

2.69Dividend Yield

STOCK EXCH OF THAI INDEX

900

1000

1100

1200

1300

1400

1500

1600

1700

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

Source: Bloomberg

Indonesia

Indonesian stocks extended rallies Wednesday (27/03), bringing the Jakarta Composite Index (JCI) to a new record high, amidst positive sentiments in Asia and supported by earning reports from listed companies in Indonesia. The JCI ended at 4,928.102, up 85.583 points, or 1.77% for the day. The advance on Wednesday was supported by gains in all major industry groups, led by financial sector that surged 2.47%, followed by miscellaneous industry sector and consumer goods sector with gains of 2.24% and 1.99% each. The LQ45 index rose 15.567 points, or 1.90%, to close at 834.411, with 33 of the 45 blue-chip stocks finished in green. For every stock that declined, more than two advanced Wednesday on the Indonesia Stock Exchange, where 6.74 billion shares valued at IDR 7.08 trillion traded on the regular market. Foreign investors posted net purchases of IDR 624.09 billion.

The Jakarta Composite Index will likely turn lower today, retreating from 3-day rallies, as global leads pointed to negative zone this morning. We expect the Jakarta Composite Index to trade with support and resistance at 4,829 and 4,978 respectively.

Close +/- % +/-JCI Index 4928.10 85.58 1.77P/E (x) 19.30P/Bv (x) 3.13

1.90Dividend Yield

JAKARTA COMPOSITE INDEX

3400

3900

4400

4900

5400

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

Source: Bloomberg

Regional Market Focus

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Sri Lanka The Colombo Bourse ended the second trading day of the week on a mixed

note; following the negative closures recorded on previous trading day. The market displayed flat movements throughout the day and indices were floated in between both spaces.

Lack of participation of the investor segments were witnessed throughout the day and the benchmark ASPI index lost tiny 0.56 points or 0.01% to close the day at 5,744.99; however, the S&P SL20 price index closed within the green terrain at 3,299.87 having gained 3.91 points or 0.12%.

The market capitalization as at the day’s closure stood at LKR 2.21Tn resulting in a year to date gain of 1.89% and the market PER and PBV stood at 15.54 and 2.12 respectively. The turnover for the day totaled up to record LKR 938.05Mn indicating a significant increase of 165.41% against the previous trading day.

Diversified Holdings (DIV) sector emerged as the top contributor for the day under the sectorial summary having provided LKR 413.02Mn which accounts to 44.03% of the daily aggregate turnover. Bank Finance & Insurance (BFI) sector stood next to that providing LKR 349.26Mn, capturing high investor attractions during the day with 1754 trades out of the aggregate 4524 trades.

Furthermore, the two sectors DIV and BFI collectively made an 81.26% subscription to the daily aggregate turnover. A total of 17.76Mn Shares changed hands resulting in an increase of 38.56% against the previous trading day. Price losers outperformed the price gainers by 105:75.

Foreigners appeared to be bullish during the day for the sixth successive trading day resulting in a net foreign inflow of LKR 408.17Mn, while extending the year to date net foreign inflow to record LKR 4.95Bn.

Further, the inflows recorded during the past 6 trading days aggregated up to nearly LKR 1.2Bn. In regard to the local FOREX market, the USD closed the day at LKR 128.40/- selling and LKR 125.25/- buying.

Close +/- % +/-CSEALL Index 5744.99 -0.56 -0.01P/E (x) 11.51P/Bv (x) 1.68

2.76

Dividend Yield

SRI LANKA COLOMBO ALL SH

4500

4700

4900

5100

5300

5500

5700

5900

6100

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

Source: Bloomberg

Australia The Australian share market on Wednesday closed almost one per cent higher

as investors took their cues from positive news in the US. At the close on Wednesday, the benchmark S&P/ASX200 index was up 44.8 points to 4,995.0.

Today (28/03/13), the Australian market looks set to open lower, following Wall Street’s overnight lead. The SFE Futures 200 is pointing downward 17 points or 0.33 per cent to 4,987.

In economics news on Thursday, data scheduled for release include TD Securities/Melbourne Institute inflation gauge for March and Australian Bureau of Statistics job vacancies for the three months to February. The Reserve Bank of Australia is due to release its financial aggregates for February.

In equities news, surfwear retailer Billabong will reach its deadline to decide on two takeover bids.

The Australian share market will be closed for Good Friday and Easter Monday and will re-open on the 02/04/13.

Close +/- % +/-S&P/ASX 200 INDEX 4994.99 44.75 0.90P/E (x) 20.73P/Bv (x) 1.98

5.71

STANDARD & POORS/ ASX 200 INDEX

Dividend Yield

3800

4000

4200

4400

4600

4800

5000

5200

5400

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

Source: Bloomberg

Hong Kong

Local stocks rallied. The HSI and HSCEI rose 154 points and 108 points to 22465 and 11033 respectively. Market volume was 63.36 billion.

We believe the market is going to consolidate on the 22000 points level, investors are suggested to stand on sideline and wait for a clear trading signal.

Technically, the HSI is expected to gain a support from 22000 level, major resistance will be 23000 level.

Close +/- % +/-HSI INDEX 22464.82 153.74 0.69P/E (x) 10.75P/Bv (x) 1.46

3.19Dividend Yield

HANG SENG INDEX

17000

18000

19000

20000

21000

22000

23000

24000

25000

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

Source: Bloomberg

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Market News

US Investors seeking to buy higher yielding, riskier slices of home-loan bonds sold yesterday byEverBank Financial Corp. (EVER) were told

they’d have a better shot if they also purchased some of the AAA rated classes, showing weaker demand for the top-ranked debt. Bank of America Corp. and Barclays Plc, the underwriters of the deal, pushed investors to purchase the debt in a package as relative yields widen on AAA portions of securities tied to new mortgages without government backing, according to two people familiar with the discussions who asked not to be identified because the negotiations were private. Greater demand for junior-ranked debt signals some investors are willing to take on the risk of homeowners defaulting on larger mortgages for higher returns. At the same time, rising spreads on the AAA debt as issuance accelerates may hamper the pace at which the U.S. government can scale back its role as it seeks to reduce the influence of mortgage guarantors Fannie Mae and Freddie Mac. “It’s important because the bulk of a deal is the AAAs,”Scott Buchta, head of fixed-income strategy at New York-based brokerage Brean Capital LLC, said today in a telephone interview. (Source: Bloomberg)

Americans signed fewer contracts to buy previously owned homes in February, indicating a pause in momentum for an industry that is helping power the economy. An index of pending home sales fell 0.4 percent to 104.8, the second-highest level since April 2010, after a revised 3.8 percent increase the prior month, the National Association of Realtors reported today in Washington. Contract signings, unadjusted for seasonal variations, increased 5 percent from February 2012. Tighter mortgage lending criteria have made it tougher for prospective homeowners to take advantage of historically low interest rates, while fewer properties for sale hinder those with access to credit. Rising property values may encourage more people to list homes as the spring selling season gets under way, giving the housing market another leg up. (Source: Bloomberg)

Genworth Financial Inc. (GNW), the life insurer and mortgage guarantor, agreed to sell its wealth- management unit to a venture of Aquiline Capital Partners LLC and Genstar Capital LLC for about $412.5 million. The sale will yield a loss of about $40 million after tax, with $35 million recognized in the current quarter, Richmond, Virginia-based Genworth said today in a statement. The deal is expected to be completed in the second half, Genworth said. Genworth Chief Executive Officer Tom McInerney, who took over in January, is seeking to simplify the company and bolster finances after losses tied to insuring U.S. mortgages. Proceeds from the sale, which includes the Altegris asset manager, will be kept at the holding company to repay 2014 debt, at maturity or before, according to the statement. (Source: Bloomberg)

Singapore Tourism, touted in recent years as a promising driver of economic growth, faces its own set of challenges this year. Given lingering

global economic uncertainty and local manpower constraints, the Singapore Tourism Board (STB) is sharpening its focus on quality tourism and pushing for a higher average daily spend by visitors. "We want to focus a bit more on yield, and discerning business and leisure travellers who will be able to take advantage of the differentiated offerings that Singapore has," said STB chief Lionel Yeo at a media briefing yesterday. This could include companies keen to hold internal events here as well as sophisticated leisure travellers for whom the Republic's mix of attractions, retail and dining offerings would prove appealing. Growth is still on the cards in 2013, albeit at a slower rate compared to the last decade. (Source: BT Online)

The Jan 12 cooling measures appear to have spooked Singapore permanent residents (PRs) looking to buy private homes here. Their share of private home purchases dived in February after the measures introduced additional buyer's stamp duty (ABSD) on a PR's first residential property purchase here. The ABSD rate on subsequent purchases by PRs was also raised significantly. However, most analysts expect the PR buying share to recover, at least among PRs acquiring their first property. An analysis of URA Realis caveats data by Knight Frank shows that in February, PRs accounted for just 12.7 per cent of the 789 caveats lodged for the purchase of private homes excluding executive condominiums in that month. (Source: BT Online)

The big car COE premium went up as expected and in the predicted range, while the small car premium's fall was also foreseen. In yesterday's bidding exercise for certificates of entitlement required to register a car, Category A (for cars below 1,600cc) shed $10,480 to $64,209, while Cat B (for cars above 1,600cc) climbed $15,810 to $73,900. Cat E (the open category which currently tracks Cat B) rose $8,300 to $73,301, while Cat C (for goods vehicles) increased $211 to $54,111 and Cat D (for motorcycles) inched up $14 to $1,909. "Common sense has returned to the market - Cat A is lower and Cat B is higher," said the managing director of a luxury franchise. Two weeks ago, in the first COE tender after the government announced a tiered ARF or Additional Registration Fee structure and introduced vehicle financing restrictions, Cat B had crashed to $58,090, or a $34,577 plunge. (Source: BT Online)

Hong Kong

A Chinese supertanker able to haul 2 million barrels of crude sent a signal from Iran’s largest export terminal in what may be the first visit of its kind since a European ban on insuring shipments in July. The Yuan Yang Hu, belonging to state-owned China Ocean Shipping (Group) Co., the country’s biggest shipping company, was at Kharg Island on March 21, according to vessel-tracking data from IHS Fairplay, a Redhill, England-based research company. The ship has since left the Persian Gulf, according to a signal today. (Source: Bloomberg)

Attacks on Apple Inc. (AAPL)’s customer service by Chinese state media this month have failed to change the perception of the country’s consumers, according to a survey by China Market Research Group. The People’s Daily newspaper, published by the the ruling Communist Party, printed a commentary today with the headline “Destroy Apple’s ‘Incomparable’ Arrogance.” It was the third consecutive day that the newspaper has carried an article criticizing the maker of iPhones and iPads. Two weeks earlier, state

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broadcaster China Central Television aired a report on Apple’s after-sales practices as part of its annual Consumer Rights Day programming. (Source: Bloomberg)

ZTE Corp. (000063), China’s second-biggest maker of mobile-phone equipment, posted its second-straight quarterly loss due to contract delays and falling handset sales in China. The net loss of 1.14 billion yuan ($183 million) in the three months ended Dec. 31 compared with net income of 991.6 million yuan a year earlier, based on figures derived from 12- month results the Shenzhen-based company released in a statement today. (Source: Bloomberg)

Thailand

Foreign investors bought a net Bt1,219mn worth of Thai equities on Wed. (Source: Bisnews)

Thailand and Myanmar are planning a new MOU for the investment in a holding company in the Dawei Deep Sea Port Project with each holding a 50% stake. (Source: Krungthep Turakij)

The Tourism Authority of Thailand (TAT) forecasts that the upcoming Songkran Festival will generate tourism revenue of nearly Bt60bn with around 800k Thais expected to take overseas trips during the long holiday. (Source: Matichon)

The NBTC said all mobile operators passed its mandatory technical standard for mobile signal quality after random checks but it found AIS had the highest number of connection losses for data services. The findings would be concluded and submitted to the Office of the Consumer Protection Board on Mar 28, 2013. (Source: Thai Post)

Chairman of the Thai Contractors Association said the government’s Bt2trn infrastructure investment scheme would ramp up construction activity but it could exacerbate the current labor shortage, which might affect the quality of construction work and building materials, especially cement and steel that could possibly lead to a shortage and drive prices higher. (Source: Post Today)

Indonesia Government estimates that the inflation in March will be below 0.75 percent due to the loosening on import restriction of shallots and

garlic. In mid-March, the government loosened garlic-import restriction and released 332 containers of garlic to the market to stabilize the prices. Coordinating Minister for Economic Affairs ensured that inflation in March will be lower than February. The government has made several policies to stabilize prices of commodities, such as shallots, which in February contributed to the inflation rate of 0.12 percent. His said March and April are basically the months with low inflation due to the harvest season.(Source: Indonesia Finance Today)

Labor absorption this year tends to be moderate as the economic growth is sustained more by non-tradable sectors which are naturally not labor-intensive. In addition to that, labor demands and human capital availability are not synchronized. The flexibility of labor absorption from the economic growth is estimated to decrease. In 2012, every one percent of economic growth only absorbed 200,000 labors. In fact, earlier, every one percent of economic growth could absorb 500,000 labors. (Source: Indonesia Finance Today)

The government plans to incorporate hybrid financing by using a method of performance-based annuity scheme (PBAS) in 2014 Revised State Budget Changes (APBN-P). The government hopes that there is a pilot project that will use the alternative of financing schemes. Head of Integration Program Committee for the Acceleration and Expansion of Indonesia's Economic Development (KP3EI) said the National Development Planning Agency and the Ministry of Finance are reviewing the PBAS financing system for infrastructure projects. (Source: Indonesia Finance Today)

Sri Lanka India has approved a request made by Sri Lanka to remove a condition of sourcing of fabric from India in order to increase the number of

garments Sri Lanka can export to India under the India-Sri Lanka Free Trade Agreement. India to remove the condition of sourcing of fabric from India for 5 million pieces under the terms of the India-Sri Lanka Free Trade Agreement so that the total quota for duty free apparel exports from Sri Lanka to India becomes 8 million pieces, without any condition on fabric sourcing. Indian government has also notified SAFTA duty concessions on 6 September 2012. Under this revised SAFTA duty regime notified by India for non-LDC countries, Sri Lankan textiles exports would attract a duty of 5%, as against the earlier 11%. This is another step that will facilitate greater Sri Lankan exports of readymade garments to the Indian market. Sri Lanka's export to India has increased substantially since the coming into force of the India-Sri Lanka FTA, reaching US$ 720.89 million in the year 2011-12. For the period April-December 2012, Sri Lanka's exports to India were US$ 528.76 million. (Source: colombopage.com)

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Australia The company building the National Broadband Network, already under fire for running late, has admitted it faces rising competition from

wireless networks offering improved services and prices. NBN Co has conceded its own modelling finds that if it increases prices by the maximum it expects to be allowed by regulators, the number of wireless-only premises will rise to 30 per cent by 2039-40 because affordability is such a significant factor for households. (Source: The Australian)

The number of job vacancies in Australia has fallen by 10.1 per cent to a three-year low, official statistics show. The total number of vacancies in February 2013 was 149,800, in seasonally adjusted terms, compared with 166,600 in November, according to the latest Australian Bureau of Statistics quarterly survey released today. (Source: The Australian)

The competition watchdog has given the nod to GrainCorp's plans to allow customers to transfer capacity to other users along its east coast port network. "This change will result in a more efficient use of port terminal capacity by reducing the chance that capacity will go unused at peak times," Australian Competition & Consumer Commission executive Joe Dimasi said in a statement. (Source: The Australian)

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83.22 +0.41% 298.17 +0.49%

108.53 +0.30% 1.845 -0.06%

1,605.25 +0.00% 14,526.16 -0.23%

544.17 +0.63% MSCI SEA 918.89 +1.27%

2,612.46 -1.09% 53.0

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

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

700

750

800

850

900

950

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

11,000

12,000

13,000

14,000

15,000

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

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

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

48

49

50

51

52

53

54

55

56

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

1,500

1,600

1,700

1,800

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

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

Feb

-13

260

280

300

320

340

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

Feb

-13

90

100

110

120

130

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

Feb-1

3

440

460

480

500

520

540

560

580

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

Regional Market Focus

28 March 2013

11 of 18

Valuations of Major Regional Markets

15.1 1.48

14.4 2.53

10.8 1.46

15.7 3.13

15.2 1.97

Source: Bloomberg

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,

Hang Seng Index, P/B (X)

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

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

3.0

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

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 March 2013

12 of 18

Source: Bloomberg

World Index

JCI 1.77% 4,928.10

HSI 0.69% 22,464.82

KLCI 0.89% 1,667.57

NIKKEI 0.18% 12,493.79

KOSPI 0.49% 1,993.44

SET 1.09% 1,560.87

SHCOMP 0.16% 2,301.26

SENSEX 0.12% 18,704.53

ASX 0.90% 4,994.99

FTSE 100 -0.18% 6,387.56

DOW -0.23% 14,526.16

S&P 500 -0.06% 1,562.85

NASDAQ 0.12% 3,256.52 COLOMBO -0.01% 5,744.99

STI 0.75% 3,313.03

Regional Market Focus

28 March 2013

13 of 18

Date Statistic For Survey Prior Date Statistic For Survey Prior

3/28/2013 Revisions: Initial Jobless Claims 3/28/2013 M1 Money Supply (YoY) Feb -- 11.20%

3/28/2013 GDP QoQ (Annualized) 4Q T 0.50% 0.10% 3/28/2013 M2 Money Supply (YoY) Feb -- 8.50%

3/28/2013 Personal Consumption 4Q T 2.10% 2.10% 3/28/2013 Credit Card Bad Debts Feb -- 18.3M

3/28/2013 GDP Price Index 4Q T 0.90% 0.90% 3/28/2013 Credit Card Billings Feb -- 3393.6M

3/28/2013 Core PCE QoQ 4Q T 0.90% 0.90% 3/28/2013 Bank Loans & Advances (YoY) Feb -- 18.30%

3/28/2013 Initial Jobless Claims 23-Mar 340K 336K 4/3/2013 Electronics Sector Index Mar -- 52.1

3/28/2013 Continuing Claims 16-Mar 3041K 3053K 4/3/2013 Purchasing Managers Index Mar -- 49.4

3/28/2013 NAPM-Milw aukee Mar 56 56.5 05-13 APR GDP (annualized) (QoQ) 1Q A -- 3.30%

3/28/2013 Chicago Purchasing Manager Mar 56.5 56.8 05-13 APR GDP (YoY) 1Q A -- 1.50%

3/28/2013 Bloomberg Consumer Comfort 24-Mar -- -33.9 08-12 APR Foreign Reserves Mar -- $259.14B

3/28/2013 Kansas City Fed Manf. Activity Mar -3 -10 4/10/2013 Automobile COE Open Bid Cat A 10-Apr -- --

3/29/2013 Personal Income Feb 0.80% -3.60% 4/10/2013 Automobile COE Open Bid Cat B 10-Apr -- --

3/29/2013 Personal Spending Feb 0.60% 0.20% 4/10/2013 Automobile COE Open Bid Cat E 10-Apr -- --

3/29/2013 PCE Deflator (MoM) Feb 0.50% 0.00% 4/14/2013 Retail Sales Ex Auto (YoY) Feb -- -4.90%

3/29/2013 PCE Deflator (YoY) Feb 1.40% 1.20% 4/14/2013 Retail Sales (YoY) Feb -- -2.00%

Date Statistic For Survey Prior Date Statistic For Survey Prior

27-28 MARMfg. Production Index ISIC NSA

(YoY)Feb 3 10.1 3/28/2013 Govt Mthly Budget Surp/Def HK$ Feb -- 41.9B

27-28 MAR Mfg. Production Index ISIC SA Feb -- 178.18 3/28/2013 Money Supply M1 - in HK$ (YoY) Feb -- 20.20%

27-28 MAR Total Capacity Utilization ISIC Feb -- 67 3/28/2013 Money Supply M2 - in HK$ (YoY) Feb -- 14.10%

3/28/2013 Customs Exports (YoY) Feb -0.15% 16.09% 3/28/2013 Money Supply M3 - in HK$ (YoY) Feb -- 14.10%

3/28/2013 Customs Imports (YoY) Feb 10.60% 40.87% 4/2/2013 Retail Sales - Value (YoY) Feb -- 10.50%

3/28/2013 Customs Trade Balance Feb -$1800M -$5490M 4/2/2013 Retail Sales - Volume (YoY) Feb -- 10.40%

3/29/2013 Total Exports YOY% Feb -- 15.60% 4/3/2013 Purchasing Managers Index Mar -- 51.2

3/29/2013 Foreign Reserves 22-Mar -- $178.3B 4/8/2013 Foreign Currency Reserves Mar -- $304.8B

3/29/2013 Total Exports in US$ Million Feb -- $17924M 4/18/2013 Unemployment Rate SA Mar -- 3.40%

3/29/2013 Forw ard Contracts 22-Mar -- $23.5B 4/18/2013 Composite Interest Rate Mar -- 0.25%

3/29/2013 Total Imports YOY% Feb -- 38.40% 4/22/2013 CPI - Composite Index (YoY) Mar -- 4.40%

3/29/2013 Total Imports in US$ Million Feb -- $20745M 4/25/2013 Exports YoY% Mar -- --

3/29/2013 Total Trade Balance Feb -- -$2821M 4/25/2013 Imports YoY% Mar -- --

3/29/2013 Current Account Balance (USD) Feb -$700M -$2237M 4/25/2013 Trade Balance Mar -- --

3/29/2013 Overall Balance in US$ Million Feb -- $1030M 4/30/2013 Govt Mthly Budget Surp/Def HK$ Mar -- --

US Singapore

Economic Announcement

Thailand Hong Kong

Source: Bloomberg

Source: BloombergSource: Bloomberg

Source: Bloomberg

Regional Market Focus

28 March 2013

14 of 18

Date Statistic For Survey Prior Date Statistic For Survey Prior

4/1/2013 HSBC-Markit Manufacturing PMI Mar -- 50.5 3/28/2013 CPI Moving Average (YoY) Mar -- 8.60%

4/1/2013 Inflation (YoY) Mar -- 5.31% 3/28/2013 CPI (YoY) Mar -- 9.80%

4/1/2013 Inflation NSA (MoM) Mar -- 0.75% 05-19 APR Exports YoY% Feb -- --

4/1/2013 Core Inflation (YoY) Mar -- 4.29% 05-19 APR Imports YoY% Feb -- --

4/1/2013 Exports (YoY) Feb -- -1.20% 4/9/2013 Repurchase Rate 9-Apr -- 7.50%

4/1/2013 Total Imports (YoY) Feb -- 6.80% 4/9/2013 Reverse Repo Rate 9-Apr -- 9.50%

4/1/2013 Total Trade Balance Feb -- -$171M 4/30/2013 CPI Moving Average (YoY) Apr -- --

01-05 APR Danareksa Consumer Confidence Mar -- 92.3 4/30/2013 CPI (YoY) Apr -- --

01-10 APR Consumer Confidence Index Mar -- 116.8 06-20 MAY Exports YoY% Mar -- --

01-10 APR Money Supply - M1 (YoY) Feb -- 13.20% 06-20 MAY Imports YoY% Mar -- --

01-10 APR Money Supply - M2 (YoY) Feb -- 12.80% 5/7/2013 Repurchase Rate 7-May -- --

03-08 APR Foreign Reserves Mar -- $105.18B 5/7/2013 Reverse Repo Rate 7-May -- --

03-08 APR Net Foreign Assets (IDR Tln) Mar -- 983.19T 5/31/2013 CPI Moving Average (YoY) May -- --

10-22 APR Total Local Auto Sales Mar -- 103284 5/31/2013 CPI (YoY) May -- --

10-22 APR Total Motorcycle Sales Mar -- 649434 05-20 JUN Exports YoY% Apr -- --

Date Statistic For Survey Prior

3/28/2013 TD Securities Inflation MoM% Mar -- 0.00%

3/28/2013 TD Securities Inflation YoY% Mar -- 2.40%

3/28/2013 Job vacancies Feb -- -6.90%

3/28/2013 Private Sector Credit MoM% Feb 0.30% 0.20%

3/28/2013 Private Sector Credit YoY% Feb 3.50% 3.60%

4/2/2013 AiG Performance of Mfg Index Mar -- 45.6

4/2/2013 RPData-Rismark House PX Actual Mar -- --

4/2/2013 RBA CASH TARGET 2-Apr 3.00% 3.00%

4/2/2013 RBA Commodity Price Index Au Mar -- 91.1

4/2/2013 RBA Commodity Index SDR YoY% Mar -- -7.20%

4/3/2013 HIA New Home Sales (MoM) Feb -- 4.20%

4/3/2013 Trade Balance Feb -- -1057M

4/4/2013 AiG Performance of Service Index Mar -- 48.5

4/4/2013 Building Approvals (MoM) Feb -- -2.40%

4/4/2013 Building Approvals (YoY) Feb -- 9.90%

Source: Bloomberg

Indonesia

Australia

Sri Lanka

Source: Bloomberg Source: Bloomberg

PHILLIP RESEARCH STOCK SELECTION SYSTEMS

BUY >15% upside from the current price

HOLD Trade within ± 15% from the current price

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We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors

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absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final

recommendation

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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