MICA (P) 081/12/2011 Ref No: RM2012_0002 1 of 15

Phillip Securities Research Pte Ltd

Regional Market Focus

4 January 2012

Singapore - STI rose 1.6% to 2688

- MSCI Asia-Pac ex-Japan surged 2.2% - Euro Stoxx 50 added 0.8% - S&P500 rose 1.5% to 1277.

US manufacturing PMI expanded at a faster pace in December, along with China's official mfg PMI flipping positive and the rate of mfg contractions easing across much of Europe and Asia - we thus have Equities pricing in hope that this slowdown is coming to an end. Another important data point is that China's services PMI accelerated markedly for December which along with the mfg PMI reduces the odds for a China hard landing.

Unfortunately, danger signs are still there, Libor-OIS spreads hit a new record as systemic risk lurks in Europe, where deficit targets will be missed and recession will challenge the huge sovereign refinancing that awaits. Although the US is seeing housing and construction come back, investment and mfg may see a slowdown cum Jan12 as the accelerated depreciation policy drops from 100% to 50%. Generally, the US faces a fiscally tighter 2012 and we expect it to be politically challenging to renew the payroll tax cut.

Nonetheless, in the short term, conditions seem positive for global equities on 3 counts: (1) better US and China data, (2) the rate of mfg contractions in Europe and Asia have eased somewhat, and (3) unlimited liquidity by the ECB has resulted in a backdoor QE. Despite these, we suspect the STI may underperform given Singapore's GDP slowdown. On the larger trend for the STI and S&P500, we remain bears unless (1) the Eurozone process for fiscal integration actually addresses its suboptimal growth path, and (2) lead econ indicators globally corroborate positive. We have some improvement in the latter already.

Close +/- % +/-FSSTI 2688.36 42.01 1.59P/E (x) 6.60P/Bv (x) 1.30

4.08Dividend Yield

STRAITS TIMES INDEX

2500

2700

2900

3100

3300

3500

1/4 4/4 7/4 10/4

Source: Bloomberg

Hong Kong Local stock soared. The HSI and HSCEI gained 443.02 points and 298.69 points

to 18877.41 and 10235.17 respectively. Market volume was 32.642 billion. The benchmark index soared in the first trading day of 2012, which seems to be

a good signal. However, the trading volume is still disappointing, at about 32 billion, which reflects that investors are still standing on the sideline.

Technically, the HSI consolidated and closed above 50 SMA (18801) and tried to challenge the 100 SMA (18901), we expect there will be relatively strong resistance at this level. If HSI closes above the 100 SMA today, we suggest that investors close out on their short position. We believe this is only a short-term rebound, due to the Europe Sovereign debt crisis not being solved. We suggest that investors use derivatives to grasp opportunities resulting from the trend.

We peg resistance for the HSI at 18900 and support at 18600

Close +/- % +/-HSI INDEX 18877.41 443.02 2.40P/E (x) 8.54P/Bv (x) 1.35

3.63Dividend Yield

HANG SENG INDEX

16000

18000

20000

22000

24000

26000

1/4 4/4 7/4 10/4

Source: Bloomberg

Regional Market Focus 4 January 2012

2 of 15

Thailand Thai stocks traded in a narrow range on an extremely light turnover of a mere

Bt8b ahead of the long New Year holidays. The SET index ended 2011 down 7.44 points or 7% from the prior year at 1025.32 points.

We expect a bounce on the first working day of 2012 following better-than-expected economic reports released by various countries including construction spending and manufacturing activities data from USA, production and services data from China and falling unemployment rate data from Germany. Meanwhile, the euro zone’s PMI shrunk by lesser than expected. All these have led to supportive buying momentum in risky assets. In our view, as long as the EU debt problems remain unsolved, a recovery may not be sustainable. Eyes should be particularly on 1) Italy’s huge debts and redemption of Euro100b bonds during 4M12 whereby 10-year bond yield is now near to 7% 2) Greece, which may eventually has to exit from the euro zone if Euro130b financial assistances sought from the EU and IMF fail to materialize. For the short-term, although the SETI is set to gain by 10 or 20 points today, we also advise investors to watch over the Thai cabinet consideration on the transfer of the FIDF debts and the flooding situation in Southern Thailand that may lead to negative repercussions.

We advise investors ‘Selective Trading’ amid a short-term positive market sentiment. Investors are advised, however, to limit equity exposure to no more than 50% of the portfolio in view of still prevailing uncertainties ahead.

Today we peg resistance for the SET index at 1029-1032 and support at 1019, 1010.

Close +/- % +/-SET INDEX 1025.32 1.41 0.14P/E (x) 12.57P/Bv (x) 1.93

4.03Dividend Yield

STOCK EXCH OF THAI INDEX

800

900

1000

1100

1200

1/4 4/4 7/4 10/4

Source: Bloomberg

Indonesia Yesterday The Jakarta Composite Index (JCI) started the market positively. The

JCI gained when the market opened by adding 0.34% and stayed on the positive trend by January effect until the market was close at 3,857.882, adding 48.742 points (+1.28%). The JCI was moving within the range of 3,808.689 - 3,858.188.

All sectors were in positive zone yesterday, led by Mining Sector (+2.29%), Miscellaneous Sector (+1.91%) and Trade and Services sector (+1.70%). The breadth of the market was positive with 170 shares advanced as compared to 54 declined and 83 shares were unchanged. The total turnover on the regular market was recorded at IDR 2.62 trillion (USD 287.59 million).

Today, we have an expectation that the JCI has support-resistance level of 3,770 – 3,940.

Close +/- % +/-

JCI Index 3857.88 48.74 1.28P/E (x) 16.87P/Bv (x) 2.85

2.06Dividend Yield

JAKARTA COMPOSITE INDEX

30003200340036003800400042004400

1/4 4/4 7/4 10/4

Source: Bloomberg

Sri Lanka Soon after the opening rally the market started to reflect an investor’s selling

sentiment and traversed in a down trend. Eventually the red market closed the day having recorded negative closures on both the indices .The All Share Price Index (ASPI) dipped 39.22 points to close the day at 6,035.65. The more liquid Milanka Price Index (MPI) lost 65.64 points to close the day at 5,174.28. The market capitalization stood at LKR 2.20Tn.

213 counters traded during the day to record a turnover of LKR 380Mn which is a reduction of 9.4% over previous trading day. The day recorded a total of 6,295 trades to result in 31.8Mn shares changing hands which is an increase of 144% compared to previous day’s volume. The price losers outnumbered the price gainers by 145:36. The foreign transactions recorded a net outflow of LKR 57.5Mn.

Close +/- % +/-CSEALL Index 6035.65 -39.22 -0.65P/E (x) 13.15P/Bv (x) 2.19

1.92Dividend Yield

SRI LANKA COLOMBO ALL SH

5500

6000

6500

7000

7500

8000

1/4 4/4 7/4 10/4

Source: Bloomberg

Regional Market Focus 4 January 2012

3 of 15

Hong Kong Review of Air sector - Supply and demand gap will narrow In 2011, the global economy was on the recession stage with regional conflicts and Japan Earthquake, which matched with the sluggish

demand on the international air market. During the first three quarters of 2011the global aviation passenger load factor decreased by 0.8 ppts yoy, and the hit-hard global air cargo market by the European debt crisis and worsening global trade market saw a 5% drop in air cargo volumes for the third quarter of 2011 over the first quarter.

As we expected before, China still remains the strongest aviation of the world. After a prosperous 2010, the boom of China’s aviation industry continued in 2011, but growth ratio narrowed infected by the economic slow-down, high basement from 2010 Shanghai Expo and Japan Earthquake. Segment differed much more significantly and the growth ratio flattened out after 2010’s steep rise.

The RTK of China in the first eleven months of 2011 grew by 6.7%, 9.7%, 1.2% and 9.0% (Vs 2010’s 26.4%, 16.6%, 49.4% and 30.4%) for total, domestic routes, international routes and regional routes respectively to 52.6, 34.8, 17.8 and 1.15 billion ton-km.

Thailand BTS Group Holdings – Company Update Recommendation: BUY Previous close: Bt0.70 Fair value: Bt0.90 BTS reported that its average daily ridership in Oct-Nov 2011 rose 4.71% YoY thanks to the opening of On Nut-Baring extension line this

year but dropped 10.04% compared to the Aug-Sep period due chiefly to the impact of the widespread flooding in Bangkok. Ridership numbers are likely to pick up in Dec after the end of the flooding.

Bangkok Metropolitan Administration (BMA) approved an extension of free rides on the On Nut-Baring extension line to Apr 30, 2012 from Dec 31, 2011, a move that would keep passenger traffic at high levels. The Mass Rapid Transit Authority (MRTA) also lately signed a contract with CK for construction of the green line from Baring to Samut Prakarn.

We keep our FY2012 net profit outlook for BTS at Bt1,639.03m. Ex-items in FY2Q12 are already built into the forecast. At current prices, we maintain a ‘BUY’ call on BTS with FY2012 price target of Bt0.90/share.

Regional Market Focus 4 January 2012

4 of 15

Market News

US WHEN top US retailers post their December sales this week, Wall Street analysts are expecting them to report a healthy end to the

holiday season, helped by discounts, improved consumer sentiment and tactics like extended hours and layaways. Some 22 major chains, from Macy's Inc and Target Corp to Costco Wholesale Corp and Gap Inc should post an aggregate 4.3 per cent increase in December sales at stores open at least a year, according to Thomson Reuters, capping a season that started moderately but gained steam in December. The top gainers are again expected to be discount chains like Costco, with its cheaper petrol, and Target as shoppers sought out low prices. (Source: BT Online)

Manufacturing in the United States grew in December at the fastest pace in six months, remaining at the forefront of the expansion entering 2012. The Institute for Supply Management's (ISM) factory index climbed to 53.9 last month from 52.7 in November, the group's data showed yesterday. Fifty is the dividing line between growth and contraction. Increasing demand for autos, gains in holiday sales and lean inventories may pave the way for further strength in the industry that accounts for about 12 per cent of the economy. At the same time, faltering growth in Europe due to the debt crisis poses a risk to the US expansion. (Source: BT Online)

Singapore As Singapore enters a slowdown - with at least two years of sub-par growth ahead of it - this year's Budget must focus on intensifying

long-term economic restructuring efforts, Deputy Prime Minister Tharman Shanmugaratnam said yesterday. Observers say Mr Tharman's comments, coupled with sobering views from the Prime Minister over the New Year weekend, suggest that companies and workers ought to expect less short-term help come February compared with what had been dished up in the last recession Budget of 2009. Advance GDP estimates for 2011 yesterday pointed to a sharper-than-expected, quarter-on-quarter Q4 contraction of 4.9 per cent, triggering speculation over a possible technical recession, defined as two quarters of sequential contractions. (Source: BT Online)

Prices of both private homes as well as HDB resale flats are poised to fall this year. This was foreshadowed in the official flash estimates for the fourth quarter of last year which showed a slowdown in growth for both segments. Urban Redevelopment Authority's private residential property price index rose a mere 0.2 per cent quarter-on-quarter in Q4 2011, its most anaemic growth in 10 quarters since the index bottomed out in Q2 2009. From the 15.8 per cent q-on-q increase in Q3 2009, the index has now moderated for nine consecutive quarters, according to CBRE's analysis. The 0.2 per cent q-on-q hike in Q4 was lower than the 1.3 per cent q-on-q rise for Q3 last year. For the whole of 2011, the index rose 5.9 per cent - a marked slowdown from the 17.6 per cent jump in 2010. (Source: BT Online)

Greater China Region Chinese Premier Wen Jiabao said business conditions may be “relatively difficult” this quarter and monetary policy will be fine-tuned as

needed. “We see downside pressure on our economy and elevated inflation at the same time,” Wen said during a two-day trip to Hunan province, according to a statement on the government’s website yesterday. “We also face problems of weakening external demand and rising costs for companies.” Economists at Barclays Capital and Bank of America Corp. say the central bank will cut lenders’ reserve requirements (CHRRDEP) before a weeklong Chinese New Year holiday starts on Jan. 23, the second reduction since 2008. The ruling Communist Party is shifting focus to supporting growth rather than damping inflation as Europe’s debt crisis threatens to curb exports. (Source: Bloomberg)

Manufacturing in India and China improved in December, a sign the world’s fastest-growing major economies are withstanding Europe’s debt crisis. The Purchasing Managers’ Index in India rose to 54.2, the most in six months, from 51 in November, HSBC Holdings Plc and Markit Economics said in an e-mailed statement yesterday. In China, the index was at 50.3 from 49 in November, the Beijing- based logistics federation said in a statement on Jan. 1. A number above 50 indicates expansion. In another positive sign, a Chinese index for non- manufacturing industries rose today. Europe’s crisis may still cap demand for goods from Asia with an index for Chinese export orders indicating a third month of contraction in December. India’s economic growth will be constrained by higher borrowing costs and global economic weakness, HSBC and Markit said. (Source: Bloomberg)

Thailand Foreign investors remained net buyers of Thai shares worth Bt525.63m last Fri. (Source: Bisnews) Thailand’s economy contracted sharply in Nov 2011 due to the impact of the country’s severe flooding crisis and a global economic

slowdown, which put downward pressure on exports and imports and sapped domestic consumption, according to the Bank of Thailand. (Source: Krungthep Turakij)

Deputy PM and Commerce Minister Kittiratt Na-Ranong will today seek cabinet approval for 4 emergency decrees to reconstruct the economy. One of the emergency decrees would result to a Bt1.14 trillion Baht debt of the Financial Institutions Development Fund (FIDF) being transferred to the Bank of Thailand to ease the burden on the Finance Ministry. The Deposit Protection Agency (DPA) would help shoulder partial interest burden, while commercial banks would be asked to contribute more. (Negative to BANK) (Source: Krungthep Turakij)

Heavy rain and flooding hit 56 districts in 9 Southern provinces (Songkla, Yala, Pattani, Narathiwat, Pattalung, Nakorn Srithammarat, Krabi, Surat Thani and Shumporn). A main road, Asia Route 41, was cut off and rail passengers have to disembark at Nakorn Srithammarat. (Source: Krungthep Turakij, Post Today)

Indonesia Indonesia`s need for meat this year will reach 484 thousand tons. Agriculture Ministry said here on Monday that the figure of estimated

need was made by taking into account the population growth of 1.49 percent and economic growth of 6.60 percent. Other factors taken into account included meat elasticity of 1.2 and the estimate of meat need during national and religious holiday celebrations which put it

Regional Market Focus 4 January 2012

5 of 15

at 1.984 kg per capita. In order to meet the need, the government has set a target of livestock supplies in 2012, namely 2,678,758 head of slaughter cows, 21,641 milk cows, 347,613 buffaloes or in total reaching 3,048,012 head. He said that livestock supplies in 2012 increased from that in 2011 which stood at 2,942,080 head which consisted of 2,517,628 slaughter cows, 44,842 milk cows and 379,610 buffaloes. The national meat consumption in 2011, he said, reached 449 thousand tons of which 292 thousand tons were met domestically while 156 thousand tons by imports. For the meat need in 2012, it would be met by 399 thousand tons of local cows, 84 thousand tons by imports. (Source: Bisnis Indonesia)

The Association of Indonesia Automotive Industries, or Gaikindo, estimated domestic car market will grow 3%-5% in 2012 compared to last year. Based on the data from Gaikindo until November 2011, the total national car market exceeded 813,856 units, and predicted to grow further to reach 870,000 units throughout last year. Furthermore, the 2012 growth target of national car market is conservative one. Gaikindo, could have been targeting a larger market growth such as 10%, to 960,000 units. Based on the Global Auto Report released by Scotia Economics Research Institution, the 5% growth in 2011 is moderate and even declined compared to 12% in 2010. The report added Japan’s market that recovered after the tsunami disaster will prompt global market growth. The market that dropped almost 20% in 2011, the lowest level since 1987, is estimated to grow double digit in 2012. The growing demand in developing countries will also support global market growth as triggered by strong employment growth and interest rates decline. Besides Japan and developed countries, US market will also grow to 13.5 million units this year, which is the highest level since 2007 boosted by the growing demand from household and corporate consumers who replace their old vehicle. (Source: AntaraNews)

Sri Lanka Central Bank governor expressed that Sri Lanka's debt to GDP ratio had fallen to 78 percent by end-2011 from 82 percent in 2010.

Further he said that the island's foreign exchange reserves had fallen to 6.0 billion US dollars by the end of 2011 enough to cover 4.0 months of imports and higher than the 3.5 months targeted in IMF programme. The International Monetary Fund has so far given Sri Lanka 1.7 billion US dollars under its programme. (Source: LBO)

Central Bank governor further expressed that Sri Lanka's economy is projected to grow at 8.0 percent in 2011 with a new deal in the offing with the International Monetary Fund. The island economy had grown at about 8.3 percent in 2011. Sri Lanka will also negotiate a follow up or surveillance programme with IMF for 2012. The IMF came in with a 2.5 billion US dollar bailout after Sri Lanka ran down its foreign reserves in a period of peg defence from around September 2008 to April 2009 triggering currency and banking crisis after a period of earlier loose monetary policy. Two tranches of about 400 million dollars remain to be given under a review in September 2011 that was put off and another in March 2012 and the program will formally end in May. (Source: LBO)

As per a new study the household accesses to telephones is on par with electricity, television, and radio in Sri Lanka mainly because of the boom in mobile phones, and are set to overtake TV and radio. Access to household phones is greater than to transport in the island, the study of Asian countries by the LIRNEasia think tank said. SMS (short message service) use, gaming and balance checking has decreased but camera and radio use increased in Sri Lanka from 2008 to 2011, said the study on use of information communications technology, mostly phones, among poor people in emerging Asian economies. (Source: LBO)

Regional Market Focus 4 January 2012

6 of 15

Dollar Index 79.65 -0.79% Gold 1,603.50 +0.19%

Crude oil 102.96 +4.18% US Treasury 10yr Yield 1.947 +0.07%

DJI 12,397.38 +1.47% S&P 500 INDEX 1,277.06 +1.55%

SHCOMP 2,199.42 +1.19%

Source: Bloomberg

10000

11000

12000

13000

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

70

75

80

85

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

1200

1400

1600

1800

2000

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

70

80

90

100

110

120

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

1.5

2

2.5

3

3.5

4

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

2000

2300

2600

2900

3200Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

1000

1100

1200

1300

1400

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Regional Market Focus 4 January 2012

7 of 15

Major World Indices

JCI 1.28% 3,857.88

HSI 2.40% 18,877.41

KLCI -1.12% 1,513.54

KOSPI 2.69% 1,875.41

NIKKEI 0.67% 8,455.35

SET 0.14% 1,025.32

SHCOMP 1.19% 2,199.42

SENSEX 2.72% 15,939.36

ASX 1.23% 4,206.50

FTSE 100 2.29% 5,699.91

DOW 1.47% 12,397.38 S&P 500 1.55% 1,277.06 NASDAQ 1.67% 2,648.72

COLOMBO -0.65% 6,035.65

STI 1.59% 2,688.36

Regional Market Focus 4 January 2012

8 of 15

Top Value & VolumeSingaporeTop 10 Value Last % Chg Chg Value ('k) Top 10 Volume Last % Chg Chg Volume ('k)GENTING SINGAPOR 1.57 +3.64 +0.055 73,438 GMG GLOBAL LTD 0.12 +6.25 +0.007 124,776NOBLE GROUP LTD 1.16 +2.65 +0.030 35,751 GENTING SINGAPORE PLC 1.57 +3.64 +0.055 47,431KEPPEL CORP LTD 9.56 +2.80 +0.260 33,522 GOLDEN AGRI-RESOURCES LTD 0.73 +1.40 +0.010 44,324GOLDEN AGRI-RESO 0.73 +1.40 +0.010 32,018 UMS HOLDINGS LTD 0.41 +6.58 +0.025 38,957SINGAP TELECOMM 3.14 +1.62 +0.050 27,100 NOBLE GROUP LTD 1.16 +2.65 +0.030 31,041DBS GROUP HLDGS 11.70 +1.56 +0.180 24,785 MEWAH INTERNATIONAL INC 0.49 +5.38 +0.025 29,307UNITED OVERSEAS 15.55 +1.83 +0.280 19,702 GENTING HONG KONG LTD 0.30 +13.21 +0.035 29,244OCBC BANK 7.91 +1.02 +0.080 17,005 PSL HOLDINGS LTD 0.38 +1.35 +0.005 22,331UMS HOLDINGS LTD 0.41 +6.58 +0.025 15,593 MEMSTAR TECHNOLOGY LTD 0.06 +8.77 +0.005 19,437OLAM INTERNATION 2.17 +1.88 +0.040 15,238 KEONG HONG HOLDINGS LTD 0.30 +1.69 +0.005 18,748

Hong KongTop 10 Value Last % Chg Chg Value ('k) Top 10 Volume Last % Chg Chg Volume ('k)PETROCHINA CO-H 10.10 +4.45 +0.43 1,524,632 SINO PROSPER STA 0.06 -29.41 -0.03 311,190CHINA MOBILE 77.10 +1.58 +1.20 1,307,526 IND & COMM BK-H 4.75 +3.04 +0.14 198,971CHINA CONST BA-H 5.52 +1.85 +0.10 1,001,998 BANK OF CHINA-H 2.93 +2.45 +0.07 190,057HSBC HLDGS PLC 60.55 +2.63 +1.55 984,790 CHINA CONST BA-H 5.52 +1.85 +0.10 181,908CHINA PETROLEU-H 8.62 +5.51 +0.45 973,939 CH FIN LEASING 0.15 -16.67 -0.03 153,915IND & COMM BK-H 4.75 +3.04 +0.14 941,461 PETROCHINA CO-H 10.10 +4.45 +0.43 151,089CNOOC LTD 14.14 +4.12 +0.56 768,469 PAC PLYWOOD 0.03 +4.17 +0.00 127,160BANK OF CHINA-H 2.93 +2.45 +0.07 554,127 TITAN PETROCHEMI 0.26 -19.05 -0.06 122,400CHINA LIFE INS-H 19.96 +3.96 +0.76 547,149 SIMSEN INTERNATI 0.01 -8.33 -0.00 113,900CHINA MENGNIU DA 19.20 +5.73 +1.04 495,042 CHINA PETROLEU-H 8.62 +5.51 +0.45 113,860

ThailandTop 10 Value Last % Chg Chg Value ('k) Top 10 Volume Last % Chg Chg Volume ('k)ADVANCED INFO 140.50 -1.06 -1.50 438,183 BTS GROUP HOLDIN 0.70 +0.00 +0.00 321,355ASIAN PHYTOCEUTI 7.90 +22.48 +1.45 417,627 THAI-GERMAN PRO 0.20 +5.26 +0.01 126,161IRPC PCL 4.08 -1.45 -0.06 353,896 IRPC PCL 4.08 -1.45 -0.06 85,968PTT PCL 318.00 +0.32 +1.00 351,765 TMB BANK PCL 1.58 -0.63 -0.01 60,170INDORAMA VENTURE 29.25 -0.85 -0.25 316,442 NATURAL PARK PCL 0.02 +0.00 +0.00 58,596BANGKOK BANK PUB 153.50 +0.33 +0.50 292,589 ASIAN PHYTOCEUTI 7.90 +22.48 +1.45 57,353PTT EXPL & PROD 168.50 +0.00 +0.00 252,572 BETTER WORLD GRE 1.50 -2.60 -0.04 56,066KASIKORNBANK PCL 122.00 +0.41 +0.50 248,550 G STEEL PCL 0.37 +2.78 +0.01 50,751BTS GROUP HOLDIN 0.70 +0.00 +0.00 224,834 SAHAVIRYA STEEL 0.71 -4.05 -0.03 50,567SIAM CEMENT PCL 313.00 -0.32 -1.00 214,376 JASMINE INTL PCL 2.06 +0.00 +0.00 38,117

IndonesiaTop 10 Value Last % Chg Chg Value ('mn) Top 10 Volume Last % Chg Chg Volume ('k)ADARO ENERGY TBK 1,810 2.84 50 197,038 ENERGI MEGA PERS 198 5.88 11 993,858ENERGI MEGA PERS 198 5.88 11 193,909 BAKRIE & BROTHER 53 3.92 2 951,981BANK MANDIRI 6,800 1.49 100 149,677 BAKRIELAND DEV 135 4.65 6 684,011ASTRA INTERNATIO 75,000 1.76 1,300 122,694 DARMA HENWA 86 4.88 4 477,093BUMI RESOURCES 2,275 3.41 75 114,354 ADARO ENERGY TBK 1,810 2.84 50 109,474BANK RAKYAT INDO 6,900 1.47 100 112,830 SURYA SEMESTA IN 770 8.45 60 75,430BAKRIELAND DEV 135 4.65 6 91,449 BAKRIE SUMATERA 290 1.75 5 61,678TELEKOMUNIKASI 7,050 0.00 0 90,603 KAWASAN INDUS JA 196 0.51 1 60,831UNITED TRACTORS 26,400 1.54 400 87,435 CLIPAN FIN INDON 490 15.29 65 57,008HARUM ENERGY 7,150 4.38 300 82,051 BHUWANATALA INDA 56 12.00 6 51,321

Sri LankaTop 10 Value Last % Chg Chg Value ('k) Top 10 Volume Last % Chg Chg Volume ('k)JOHN KEELLS HLDG 169.20 -1.05 -1.80 62,828 SMB LEASING - NV 0.70 0.00 0.00 11,126COLOMBO LAND & D 55.70 -0.89 -0.50 21,762 TESS AGRO LTD 4.20 -4.55 -0.20 1,838ENVIRONMENTAL RE 37.50 -4.09 -1.60 16,251 SMB LEASING PLC 1.80 0.00 0.00 1,740HVA FOODS LTD 37.30 -3.62 -1.40 12,358 PANASIAN POWER L 4.10 -2.38 -0.10 588TESS AGRO LTD 4.20 -4.55 -0.20 7,799 TEXTURED JERSEY 10.00 -2.91 -0.30 523SMB LEASING - NV 0.70 0.00 0.00 7,788 ENVIRONMENTAL RE 37.50 -4.09 -1.60 431COLOMBO FORT LAN 48.70 -2.60 -1.30 5,495 COLOMBO LAND & D 55.70 -0.89 -0.50 395TEXTURED JERSEY 10.00 -2.91 -0.30 5,238 JOHN KEELLS HLDG 169.20 -1.05 -1.80 370HDFC BANK OF SL 1464.90 4.64 64.90 3,839 HVA FOODS LTD 37.30 -3.62 -1.40 327SEYLAN DEVELOPME 12.10 -3.20 -0.40 3,279 RAIGAM WAYAMBA S 4.10 -2.38 -0.10 284Source: Bloomberg

Regional Market Focus 4 January 2012

9 of 15

Commodities % Chg Chg Last Price of S$1 Price of US$1GOLD SPOT (US$/OZ) +0.19 +2.97 1,603.50 0.7516 1.0361SILVER SPOT (US$/OZ) +0.17 +0.05 29.67 0.7868 1.0101WTI Cushing Crude Oil Spot Price (US$/bbl) +4.18 +4.13 102.96 0.5970 1.3049

0.4979 1.56480.7791 1.0000

Commodities % Chg Chg Last 4.9080 6.2980Malaysian Rubber Board Standard (MYR/kg) -0.64 -6.50 1,014.00 6.0520 7.7679PALM OIL (MYR/Metric Tonne) -0.50 -16.00 3,167.50 59.7500 76.6900

893.1215 1147.4000Index % Chg Chg Last 2.4410 3.1395 DOLLAR INDEX SPOT -0.79 -0.63 79.65 24.4372 31.3100Source: Bloomberg

CurrenciesAUSTRALIAN DOLLAR

Commodities & Currencies

CANADIAN DOLLAREUROBRITISH POUNDUS DOLLARCHINA RENMINBIHONG KONG DOLLARJAPANESE YENKOREAN WONMALAYSIAN RINGGITTHAI BAHT

Maturity Today Yesterday Last Week Last Month3 Months 0.00 0.00 0.00 0.006 Months 0.04 0.04 0.03 0.032 Years 0.25 0.24 0.29 0.253 Years 0.39 0.35 0.43 0.385 Years 0.88 0.83 0.96 0.9110 Years 1.95 1.87 2.00 2.0330 Years 2.98 2.89 3.03 3.03

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

US Treasury Yields

1.951.70

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

Regional Market Focus 4 January 2012

10 of 15

Date Statistic For Survey Prior Date Statistic For Survey Prior1/4/12 Minutes of FOMC Meeting 1/4/12 Electronics Sector Index DEC 51.2 50.9

1/4/12 MBA Mortgage Applications 30-Dec - - - - 1/4/12 Purchasing Managers Index DEC 48.8 48.7

1/4/12 Factory Orders NOV 2.0% -0.4% 1/5/12 Automobile COE Open Bid Cat A

5-Jan - - 50001

1/5/12 Total Vehicle Sales DEC 13.50M 13.59M 1/5/12 Automobile COE Open Bid Cat B

5-Jan - - 70003

1/5/12 Domestic Vehicle Sales DEC 10.40M 10.53M 1/5/12 Automobile COE Open Bid Cat E

5-Jan - - 71000

1/5/12 Challenger Job Cuts YoY DEC - - -12.8% 1/9/12 Foreign Reserves DEC - - $240.99B

1/5/12 RBC Consumer Outlook Index

JAN - - 40.3 1/13/12 Retail Sales Ex Auto (YoY) NOV - - 8.6%

1/5/12 ADP Employment Change DEC 175K 206K 1/13/12 Retail Sales (MoM) sa NOV - - 6.1%1/5/12 Initial Jobless Claims 31-Dec 375K 381K 1/15/12 Retail Sales (YoY) NOV - - 8.5%1/5/12 Continuing Claims 24-Dec 3578K 3601K 1/17/12 Electronic Exports (YoY) DEC - - 0.1%

1/5/12 Bloomberg Consumer Comfort

1-Jan - - -47.5 1/17/12 Non-oil Domestic Exports (YoY)

DEC - - 1.6%

1/5/12 ISM Non-Manf. Composite DEC 53.0 52.0 1/17/12 Non-oil Domestic Exp SA (MoM)

DEC - - 5.9%

05-06 JAN ICSC Chain Store Sales YoY

DEC - - 3.2% 1/18/12 Automobile COE Open Bid Cat B

18-Jan - - - -

1/6/12 Change in Nonfarm Payrolls DEC 150K 120K 1/18/12 Automobile COE Open Bid Cat E

18-Jan - - - -

1/6/12 Change in Private Payrolls DEC 170K 140K 1/19/12 Automobile COE Open Bid Cat A

19-Jan - - - -

Date Statistic For Survey Prior Date Statistic For Survey Prior

1/4/12 Core CPI (YoY) DEC 2.75% 2.90% 1/5/12 Purchasing Managers Index DEC - - 48.7

1/4/12 Consumer Price Index NSA (MoM)

DEC -0.10% 0.21% 1/9/12 Foreign Currency Reserves DEC - - $282.5B

1/4/12 Consumer Price Index (YoY)

DEC 4.00% 4.19% 1/19/12 Unemployment Rate SA DEC - - 3.4%

16-18 JAN Customs Exports (YoY) DEC - - -12.4% 1/19/12 Composite Interest Rate DEC - - 0.48%

16-18 JAN Total Car Sales DEC - - 25664 1/20/12 CPI - Composite Index (YoY)

DEC - - 5.7%

1/25/12 Benchmark Interest Rate 25-Jan - - 3.25% 1/26/12 Exports YoY% DEC - - 2.0%

26-28 JAN Total Capacity Utilization ISIC

DEC - - 40.1 1/26/12 Imports YoY% DEC - - 8.8%

26-30 JAN Mfg. Production Index ISIC (YoY)

DEC - - -48.59 1/31/12 Money Supply M1 - in HK$ (YoY)

DEC - - 3.1%

1/31/12 Business Sentiment Index DEC - - - - 1/31/12 Money Supply M2 - in HK$ (YoY)

DEC - - 3.6%

1/31/12 Current Account Balance (USD)

DEC - - - - 1/31/12 Money Supply M3 - in HK$ (YoY)

DEC - - 3.5%

1/31/12 Total Exports in US$ Million DEC - - - - 1/31/12 Govt Mthly Budget Surp/Def HK$

DEC - - -1.4B

1/31/12 Total Exports YOY% DEC - - - - 2/2/12 Retail Sales - Value (YoY) DEC - - 23.5%

1/31/12 Total Imports in US$ Million DEC - - - - 2/2/12 Retail Sales - Volume (YoY)

DEC - - 16.9%

1/31/12 Total Imports YOY% DEC - - - - 03-06 FEB Purchasing Managers Index JAN - - - -

1/31/12 Total Trade Balance DEC - - - - 2/7/12 Foreign Currency Reserves JAN - - - -

Source: Bloomberg Source: Bloomberg

Source: Bloomberg Source: Bloomberg

Thailand Hong Kong

US SingaporeEconomic Announcement

Regional Market Focus 4 January 2012

11 of 15

Date Statistic For Survey Prior Date Statistic For Survey Prior

03-06 JAN Danareksa Consumer Confidence

DEC - - 91.4 07-15 JAN Exports YoY% NOV - - -4.9%

03-06 JAN Foreign Reserves DEC - - $111.32B 07-15 JAN Imports YoY% NOV - - 41.4%

03-06 JAN Net Foreign Assets (IDR Tln)

DEC - - 985.15T 1/13/12 Repurchase Rate 13-Jan - - 7.000%

1/12/12 Bank Indonesia Reference Rate

12-Jan - - 6.00% 1/13/12 Reverse Repo Rate 13-Jan - - 8.500%

23-27 JAN Total Local Auto Sales DEC - - 67656 1/31/12 CPI Moving Average (YoY) JAN - - 6.7%23-27 JAN Total Motorcycle Sales DEC - - 642126 1/31/12 CPI (YoY) JAN - - 4.9%2/1/12 Total Trade Balance DEC - - $1526M 09-21 FEB Exports YoY% DEC - - - -2/1/12 Inflation NSA (MoM) JAN - - 0.57% 2/29/12 CPI Moving Average (YoY) FEB - - - -2/1/12 Inflation (YoY) JAN - - 3.79% 2/29/12 CPI (YoY) FEB - - - -2/1/12 Exports (YoY) DEC - - 8.30% 09-20 MAR Exports YoY% JAN - - - -2/1/12 Core Inflation (YoY) JAN - - 4.34% 09-20 MAR Imports YoY% JAN - - - -2/1/12 Total Imports (YoY) DEC - - 18.4% 15-30 MAR GDP (YoY) 4Q - - 8.4%

01-07 FEB Danareksa Consumer Confidence

JAN - - - -

01-15 FEB Annual GDP 2011 - - 6.10%03-06 FEB Foreign Reserves JAN - - - -Source: Bloomberg

Indonesia

Source: Bloomberg

Sri Lanka

PHILLIP RESEARCH STOCK SELECTION SYSTEMS

BUY >15% upside from the current price

HOLD Trade within ± 15% from the current price

SELL >15% downside from the current price

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

like (but not limited to) a stock's risk reward profile, market sentiment, recent rate of share price appreciation, presence or

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

recommendation

GENERAL DISCLAIMER

This publication is prepared by Phillip Securities (Hong Kong) Ltd (“Phillip Securities”). By receiving or reading this

publication, you agree to be bound by the terms and limitations set out below.

This publication shall not be reproduced in whole or in part, distributed or published by you for any purpose. Phillip

Securities shall not be liable for any direct or consequential loss arising from any use of material contained in this

publication.

The information contained in this publication has been obtained from public sources which Phillip Securities has no reason

to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”)

contained in this publication are based on such information and are expressions of belief only. Phillip Securities has not

verified this information and no representation or warranty, express or implied, is made that such information or Research

is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in this

publication is subject to change, and Phillip Securities shall not have any responsibility to maintain the information or

Research made available or to supply any corrections, updates or releases in connection therewith. In no event will Phillip

Securities be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of

the information or Research made available, even if it has been advised of the possibility of such damages.

Any opinions, forecasts, assumptions, estimates, valuations and prices contained in this material are as of the date

indicated and are subject to change at any time without prior notice.

This material is intended for general circulation only and does not take into account the specific investment objectives,

financial situation or particular needs of any particular person. The products mentioned in this material may not be suitable

for all investors and a person receiving or reading this material should seek advice from a financial adviser regarding the

suitability of such products, taking into account the specific investment objectives, financial situation or particular needs of

that person, before making a commitment to invest in any of such products.

This publication should not be relied upon as authoritative without further being subject to the recipient’s own independent

verification and exercise of judgment. The fact that this publication has been made available constitutes neither a

recommendation to enter into a particular transaction nor a representation that any product described in this material is

suitable or appropriate for the recipient. Recipients should be aware that many of the products which may be described in

this publication involve significant risks and may not be suitable for all investors, and that any decision to enter into

transactions involving such products should not be made unless all such risks are understood and an independent

determination has been made that such transactions would be appropriate. Any discussion of the risks contained herein

with respect to any product should not be considered to be a disclosure of all risks or a complete discussion of such risks.

Nothing in this report shall be construed to be an offer or solicitation for the purchase or sale of a security. Any decision to

purchase securities mentioned in this research should take into account existing public information, including any

registered prospectus in respect of such security.

Disclosure of Interest

Analyst Disclosure: Neither the analyst(s) preparing this report nor his associate has any financial interest in or serves as

an officer of the listed corporation covered in this report.

Firm’s Disclosure: Phillip Securities does not have any investment banking relationship with the listed corporation covered

in this report nor any financial interest of 1% or more of the market capitalization in the listed corporation. In addition, no

executive staff of Phillip Securities serves as an officer of the listed corporation.

Phillip Securities (HK)Phillip Securities (HK)Phillip Securities (HK)Phillip Securities (HK) Ltd Ltd Ltd Ltd

2

Availability

The information, tools and material presented herein are not directed, intended for distribution to or use by, any person or

entity in any jurisdiction or country where such distribution, publication, availability or use would be contrary to the

applicable law or regulation or which would subject Phillip Securities to any registration or licensing or other requirement,

or penalty for contravention of such requirements within such jurisdiction.

© 2011 Phillip Securities (Hong Kong) Limited

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