MCI (P) 137/11/2012 Ref No: RM2012_0244 1 of 15

Regional Market Focus

Phillip Securities Research Pte Ltd

18 December 2012

Thailand

Shin Corporation – Company Update Recommendation: Buy Previous close: Bt66.50 Fair value: Bt82

ADVANC delivered stellar earnings growth of 42.40% y-y in 9MCY12.

On a core business basis, THCOM swung to a profit of Bt349mn in 9MCY12 from a loss of Bt176mn in 9MCY11.

INTCH plans to bid for broadcasting licenses to operate three terrestrial digital TV channels. The auction of digital TV licenses is expected to take place in Apr 2013.

We estimate INTUCH will earn a net profit of Bt14,312.25mn in CY12 and its profit is projected to rise further by 19.4% y-y to Bt17,089.58mn in CY13.

We rate INTUCH shares a ‘BUY’ with a target price of Bt82/ share based on a 10% discount to NAV.

Hong Kong

China Merchants Bank (3968.HK) Recommendation: Accumulative, Previous close: HK$16.44, Fair value: HK$18.28

According to CMB’s 3Q2012 result, its accumulate net profits reached RMB34.790 billion, a significant increase by 22.55% y-y, and 49% q-q respectively, translating to an EPS of RMB1.98, higher than our expectation.

The Group’s total assets increased sharply by 12.51% to RMB3.14 trillion compared to the end of 2011, equivalent to BVPS of RMB8.85, 15.69% higher than that of 2011.

We note there was the deterioration of CMB’s asset quality with the increase of both amount and ratio of NPLs. As at the end of 3Q2012, the Group’s NPL ratio increased by 0.03 percentage points to 0.59% compared with the end of 2011, and the converge ratio dropped 22.76 percentage points to 377.37%.

We concern about CMB’s financing plan. Currently, CMB had announced the delay of financing plan, and showed large capital pressure under the low CAR. By the end of Sep, the Core CAR and CAR of CMB recorded 8.47% and 11.56%, increasing by 0.25 and 0.03 percentage points respectively, which are at the bottom of the industry.

Considering the better-than-expected profit growth, we slightly increase 12-m TP of CMB to HK$18.28, 11.18% higher than the latest closing price, equivalent to P/E6.9x and P/B1.4x in 2013 respectively, and we recommend Accumulate rating.

Regional Market Focus

18 December 2012

2 of 15

Strategy Views

- Country Strategy: Thai, 7 Dec / ASEAN, 5 Dec / China & HK, 23 Nov / US, 24 Oct - Global Macro, Asset Strategy: Update, 25 Oct

Morning Commentary

- STI: -0.31% to 3158.7 - MSCI SE Asia: -0.14% to 860.4 - Hang Seng: -0.41% to 22513.6 - MSCI APxJ: -0.47% to 462.9 - Euro Stoxx 50: -0.10% to 2628 - S&P500: +1.19% to 1430.4 Property Sector Update: By Bryan Go, Investment Analyst. Developers sold fewer residential units in November with 1,087 units unloaded (-44% m-m, -36% y-y), excluding ECs. The lower sales could be due to lower new launches in the month (773 units) and the absence of sizable new projects ahead of year-end holiday’s season. Nonetheless, take-up rates have been over 100% since June 2012. Among the different regions, OCR saw the most decline of sales with 711 units sold by developers (-52%m-m) and sales in RCR declined to 167 units (-48%m-m). CCR, however, closed more transactions with 209 unit sold (+45%m-m). Top seller in the month was Eco Sanctuary by SP Setia, with 140 units sold at median price of $1,050psf. That followed by 133 units sold from d’Leedon (by CapitaLand’s JV), out of the 300 units launched in the month. We maintain our view that residential property prices to remain resilient with ~1% growth in 2012 but possibly 5% downward correction in 2013, and continued to prefer CapitaLand (TP: $3.97) MARKET OUTLOOK: By Joshua Tan, Hd of Research The STI, Hang Seng, KLCI (N.Asian and ASEAN markets in general) paused in synch yesterday, it’s still too early to say whether there will be a pullback in the immediacy or a resumption in the uptrend. We do note however that feedback from market participants is that after a near relentless 6 week rally, are we due one soon. In the near term, some possible further encouragement from the US: markets there may be regaining footing after a glimmer of progress in fiscal cliff negotiations as Republican leader John Boehner has conceded for the first time the possibility of tax raisings (for >US$1m earners) in exchange for controls on spending entitlements, the President is therefore now willing to explore concessions on social security. We note also that Crude has poked its head above the 50dma which has acted as resistance for about 3 months. Dollar index is also on the decline. Both are good signs for stocks. In the longer term, the fact that the STI has finally cracked its wedge formation, 3q12 earnings were not as bad as feared, and Asia’s economic indicators are trending better, are all encouraging signs. We are increasingly positive on stocks 1H13. As for the US economy, the main drag has been investment, but this could easily reverse and spark a strong rebound should we get progress on resolving the fiscal cliff. SG equity strategist favours Capitaland, SATS and SIAEC. MACRO DATA: In Singapore, NODX registered modest growth of 0.4% y-y 3mma in Nov, compared to the 2.6% decline in the preceding month. However, weakness in the electronics cluster continued to persist. Specifically, electronics NODX continued to contract by 16.5% in Sept, following the 0.8% decline in the preceding month. As we have guided previously in our ASEAN macro strategy report, the weakness in electronics manufacturing output as well as exports is likely to persist in the near term as (i) Singapore is not plugged into the tablet and smartphone value chain (unlike South Korea and Taiwan) and (ii) global demand -as reflected in the SEMI book-to-bill ratio- remains tepid. In the US, manufacturing in the New York region shrank more than forecast, showing weakness in the industry is persisting. The Federal Reserve Bank of New York’s general economic index dropped to minus 8.1, the fifth month of contraction, from minus 5.2 in November. The median forecast of 55 economists in a survey called for minus 1. Readings less than zero signal contraction. In Euro zone, export fell for a second month in Oct by 1.4% m-m seasonally adjusted (sa) in Oct, after the 1.3% m-m sa fall in Sept. Import rose by 0.6% m-m in Oct and trade surplus narrowed to 7.9 bn euros from the revised 11 bn euros in Sept. Germany’s export fell by 3.6% m-m sa in Oct while import rose by 3.4% m-m. France and Italy reported export declines of 2.1% m-m sa and 1.4% m-m sa respectively. The ECB has signaled the weakness in economic activities is likely to extend into the first half in 2013 and reduced its growth forecast to a 0.5% contraction in 2012 and a 0.3% contraction in 2013.

Regional Market Focus

18 December 2012

3 of 15

Singapore The benchmark STI closed marginally lower at 3,158.7 (-0.31%). The 1.9bn

shares traded were worth S$1.0bn. 19 of the STI components closed lower with the biggest decline in Land

Transport Conglomerate, ComfortDelGro. Our transport analyst believes that there is no fundamental reason for this fall and continues to stay positive on the counter.

Despite lower sales of residential units in Nov, our property analyst maintained his view for resilience in residential property prices in 2012. However, he expects a mild correction of prices in 2013.

Our top picks for the Singapore Market are SIAEC, SATS & Capitaland. SIAEC & SATS are yield plays that benefit from strong underlying business trends. Capitaland would be a beneficiary of the stabilization of property prices and bottoming out of economic conditions in China.

Close +/- % +/-FSSTI 3158.70 -9.73 -0.31P/E (x) 12.05P/Bv (x) 1.44

2.94Dividend Yield

STRAITS TIMES INDEX

2500

2700

2900

3100

3300

12/17 3/17 6/17 9/17 12/17

Source: Bloomberg

Thailand Thai stocks remained stuck in range on Mon. Even though the SET index spent

most of the session in the green amid more sector rotation, gains were limited by sporadic bouts of short-term profit taking while investors were keeping a close eye on progress in US budget talks.

Big gains of more than 100 points on Wall Street lifted by optimism about a deal to avert the US fiscal cliff by year-end deadlines could set the positive tone for the Thai stock market today. The Thai baht stayed on the strong side with the unit hovering at 30.59 per US dollar in today’s early trade (0755 hrs Thailand time), corresponding with foreign fund inflows. Foreign buying of Thai equities continued yesterday to the tune of Bt1.3bn but data however showed foreign investors unwound some positions to book profits in derivatives markets as they held net short positions of more than 700 contracts yesterday, leaving the market vulnerable to bouts of short-term profit taking. However, uncertainty over the US fiscal cliff talks along the way before end-of-year deadlines could add volatility to the market from time to time. Overall we expect the SET index to trade in a range of between 1350 and 1365 today.

The short-term strategy is to be selective in stocks. We advise investors to look for laggards relative to peers/broader market and focus on year-end spending plays.

Resistance on the main index is seen at 1365-1370 and support at 1357-1350 today.

Close +/- % +/-SET INDEX 1359.09 0.59 0.04P/E (x) 16.92P/Bv (x) 2.32

3.26Dividend Yield

STOCK EXCH OF THAI INDEX

900

1000

1100

1200

1300

1400

12/17 3/17 6/17 9/17 12/17

Source: Bloomberg

Indonesia

The Jakarta composite index closed slightly up on Monday (18/12), amidst mixed closes on Asian markets as investors turned optimistic after Japan’s election but US “fiscal cliff” dampened sentiments. The JCI added 6.994 points, or 0.16%, to close at 4,315.857. The advance included five of the 9 major stock sectors, with miscellaneous industry gained 1.32%, mining added 0.69%, and infrastructure also climbed 0.69%. Indonesia’s blue-chip stocks finished in a mixed bag on Monday, with the LQ45 index gained a modest 1.674 points, or 0.23%, to 737.557, as 19 of its components rose, and other 19 components fell. More than 110 shares advanced, 135 shares declined, and the remaining 219 shares stayed unchanged Monday on the Indonesia Stock Exchange, where 3.331 billion shares valued at IDR 4.19 trillion changed hands on the regular market. Foreign market participants posted net purchases worth IDR 66.437 billion in total.

The Jakarta composite index will likely trade higher today, after positive closes on US markets overnight. We expect the JCI to trade within 4,280 – 4,344 range.

Close +/- % +/-JCI Index 4315.86 6.99 0.16P/E (x) 16.92P/Bv (x) 2.83

2.12Dividend Yield

JAKARTA COMPOSITE INDEX

3400

3600

3800

4000

4200

4400

4600

12/17 3/17 6/17 9/17 12/17

Source: Bloomberg

Regional Market Focus

18 December 2012

4 of 15

Sri Lanka The Colombo bourse unwrapped the third week of December and remained

within the negative territory for the second consecutive trading day recording adverse closures on all the indices. This was as a result of the lack of buying interest prevailed in whole the day. The Benchmark ASPI stood at 5,503.51 losing 19.21 points; this was a decrease of 0.35% compared to the previous trading day. The liquid MPI closed the day at 5,011.90, dropping 33.30 points. Meanwhile, losing 13.35 points, the S&P SL20 Price Index closed the day at 3,009.44. The market capitalization for the day stood at LKR 2.11Tn recording a year to date loss of 4.49%. The day’s turnover stood at LKR 532.88Mn, an increase of 5.43% against the previous trading day. The best performers were Investment Trusts (LKR 203.76Mn) and Bank Finance & Insurance (LKR 138.48Mn) respectively. The total traded volume for the day amounted to 26.98Mn shares; this was a 75.07% Increase against the previous trading day. Price losers outnumbered the price gainers at a ratio of 90:66. The foreigners appeared to be bullish during the day, recording a net foreign inflow (LKR 102.46Mn) for the second consecutive trading day. This extended the year to date net foreign inflow to record LKR 36.74Bn.

Close +/- % +/-CSEALL Index 5503.51 -19.21 -0.35P/E (x) 11.61P/Bv (x) 1.40

2.73

Dividend Yield

SRI LANKA COLOMBO ALL SH

4500

5000

5500

6000

6500

12/17 3/17 6/17 9/17 12/17

Source: Bloomberg

Australia The Australian market closed weaker on Monday with the gold sector leading the

broader market lower. The benchmark S&P/ASX200 index lost 9.7 points or 0.21 per cent to 4,573.4 points.

The Australian share market is likely to open higher after Wall Street rose on hopes of progress in United States budget talks. The SFE Futures 200 is pointing upwards 34points or 0.74 per cent to 4,607.

On the economic news front for Tuesday, the Reserve Bank of Australia (RBA) releases the minutes from its December 4 board meeting. The Australian Bureau of Statistics (ABS) publishes international merchandise imports data for November.

Close +/- % +/-S&P/ASX 200 INDEX 4573.40 -9.71 -0.21P/E (x) 17.75P/Bv (x) 1.82

6.15

STANDARD & POORS/ ASX 200 INDEX

Dividend Yield

3800

4000

4200

4400

4600

4800

12/17 3/17 6/17 9/17 12/17

Source: Bloomberg

Hong Kong

China’s shares soared more than 4 percent on Friday, as investors speculated that the upcoming economic work conference that will set the tone for China's economic policies in 2013. The benchmark Shanghai Composite Index gained 4.32 percent, or 89.15 points, to 2,150.63. The Shenzhen Component Index closed strong at 8,530.9, up 4.4 percent, or 359.55 points. Combined turnover on the two bourses jumped to 208.23 billion yuan from 98.2 billion yuan the previous trading day.

Hong Kong stocks rode on the rally of China’s market. The benchmark Hang Seng Index gained 160.40 to 22,605.98 and traded between 22,636.43 and 22,396.72. Turnover totaled 72.35 billion HK dollars, comparing with Thurday’s 62.49 billion HK dollars.

Technically, the HSI is expected to consolidate at around 22,000 with near term support and resistant at 22,400 and 22,800 respectively.

Close +/- % +/-HSI INDEX 22513.61 -92.37 -0.41P/E (x) 11.56P/Bv (x) 1.51

3.14Dividend Yield

HANG SENG INDEX

17000

18000

19000

20000

21000

22000

23000

12/17 3/17 6/17 9/17 12/17

Source: Bloomberg

Regional Market Focus

18 December 2012

5 of 15

Market News

US A top US Federal Reserve policymaker on Monday redoubled his opposition to the US central bank's accommodative policies, warning

that its latest policy steps" test the limits" of the Fed's hard-won credibility on inflation. Repeating arguments he has made in the past, Richmond Fed President Jeffrey Lacker said the central bank's growing stable of assets makes it much more vulnerable to "small errors." The Fed is "straining to provide as much stimulus as possible without endangering our price-stability credibility," he said on CNBC television. (Source: BT Online)

Singapore Singapore employees expect to enjoy an increase in their salary next year, a survey released yesterday showed. The Randstad

Workmonitor Report for Q4 2012 tracks employee expectations, mobility, satisfaction and personal motivation. Randstad is one of the world's largest recruitment and HR service providers. Some 14,780 employees from 32 countries were surveyed via an online questionnaire. The survey was conducted from Oct 18 to Nov 6. Of the 405 employees from Singapore who were surveyed, 76 per cent expect salary hikes next year. This is slightly higher than the 70 per cent of employees who actually received an increase in salary this year. (Source: BT Online)

Singapore marine bunker fuel sales plunged to an eight-month low in November as an uncertain economic outlook kept demand tepid for the heavy residue, official data showed on Monday. Total volumes for November stood at around 3.27 million tonnes, down almost two per cent from October's 3.50 million, data from the Maritime and Port Authority of Singapore (MPA) showed. Sales of the 380-cst grade, which accounts for about 70 per cent to 80 per cent of total sales, dropped more than nine per cent from October to 2.49 million tonnes. The data came as no surprise to most bunker traders, some of whom are expecting sales volumes to drop even more. "Demand (for bunker) is poor worldwide. Ship owners are still not buying up the volumes," said a Singapore-based bunker trader. (Source: BT Online)

Hong Kong

A government think tank has warned that 2013 may see continued rises in real estate prices and face the risks of market collapses in some localities. According to a green paper on China's housing sector released by the Chinese Academy of Social Sciences (CASS) on Thursday, the academy is worried that many indexes of the country's housing market have shown rising trends in recent months. According to a report by the National Bureau of Statistics on Dec. 9, China's real estate investment rose 16.7 percent year on year in the first 11 months of this year, compared with 15.4 percent in the first 10 months. (Source: peopledaily.com.)

China's coal imports will grow 48 percent year-on-year to about 270 million metric tons this year due to the country's increasing energy demand to support its economic development, said JYD Online Co Ltd, a Beijing-based bulk commodity consultant. Last year, China imported 182 million tons of coal. By the end of October, the country had imported 225 million tons of coal. JYD Online said that government data predicts that the country's coal consumption in 2013 will grow 4.5 percent year-on-year. (Source: peopledaily.com.)

China's oil refinery output will increase to about 42 million metric tons in December, up 7.3 percent year-on-year, indicating that the country's economy is gradually warming up at the end of the year, said Shanghai-based industrial information provider ICIS C1 Energy. Sinopec Group and PetroChina Co -- the two biggest oil and gas companies in the country -- will process 32.51 million tons of crude oil in total this month, up 1.27 percent compared with last month, C1 Energy said. C1 Energy's estimates are based on data from 35 refiners owned by Sinopec and 31 refiners owned by PetroChina. Their total refining capacities take up about 67 percent of the country's total capacity. (Source: peopledaily.com.)

Thailand

Foreign investors remained net buyers of Thai shares worth Bt1,289.05mn on Mon. (Source: Bisnews) Industry Minister M.R. Pongsvas Svasti and the Board of Investment will arrange a road show to India and Bangladesh during Dec 19-

23, 2012 with the hope to attract more investments into Thailand. (Source: Bisnews) The Commerce Ministry expects Thailand’s exports to grow by 4.17% this year before growth picks up to 8%-9% in 2013. (Source:

Bisnews) Myanmar aims to amend its law to attract more investments into Dawei while the Thai government plans to set up a joint venture or

consortium to jointly hold the concession with ITD to finance the development of the massive Dawei deep-sea port and special economic zone project, which requires huge investment of up to Bt200bn-Bt300bn. (Source: Post Today)

Regional Market Focus

18 December 2012

6 of 15

Indonesia The Indonesian government will maintains next year's budget deficit at the level of 1.65 percent of Gross Domestic Product (GDP),

despite the realization of State Budget and Expenditure (APBN) is estimated at IDR 70 trillion (USD 7.28 billion), higher than the targeted IDR 1.683 trillion. The Minister of Finance said the exceeding budget realization was due to changes in exchange rates, oil prices and state revenues. This year's budget deficit is estimated at 2.35 percent of GDP, higher than the targeted 2.23 percent of GDP, due to the increased quota of subsidized fuel. The allocation of this year’s subsidy budget was IDR 137 trillion and increased to IDR 230 trillion. The widening of this year’s budget deficit is due to changes in macroeconomic assumptions, including oil lifting and the off-target exchange rate. (Source: Indonesia Finance Today)

The government is optimistic that Indonesia's exports to Japan in 2013 will increase, even though Japan is experiencing a recession. Japan’s export has now reached its lowest point since 2009. The Deputy Coordinating Minister for Economic Affairs, Industry and Trade Department, said export to Japan will continue to increase, mainly in the sectors of automotive, electronics, household, and energy. Separately, the Coordinating Minister for the Economy estimates that import will remain high, so there needs to be a policy that is able to withstand the surge of import. (Source: Indonesia Finance Today)

Sri Lanka Sri Lanka raises petrol, furnace oil prices. Sri Lanka's state-run Ceylon Petroleum Corporation, has raised petrol by 10 rupees to 159 and

two grades of furnace oil but kept diesel and kerosene prices unchanged petroleum. One grade of furnace oil has been raised to 90 rupees from 65 and another from 75 to 100 rupees a litre. The petroleum utility makes large profits and the Treasury collects high percentage of taxes from petrol. Refined petroleum was about 92 rupees in the Singapore market Friday (114.15 US dollars a barrel) but is retailed in Sri Lanka at prices far below cost. Refined diesel is about 99 rupees a litre (122.8 US dollars a barrel) in the Singapore market but is retailed at only 115 rupees a litre. The latest price increase widens the gap between under-priced diesel which is used by business and luxury SUV owners and overpriced petrol which is used by small car and motorcycle owners. Motorcycle users and car users effectively end up subsidizing buses, including those used for tourist transport, and even trucks used in export industries and construction as well as fishing boats. Sri Lanka does not have a fair and transparent cost-based price formula for refined petroleum and prices are raised on an ad hoc basis. Under-priced energy funded with bank loans, which are ultimately accommodated by central bank credit (printed money) causes frequent balance of payments trouble in Sri Lanka leading to currency depreciation and inflation. (lbo.lk)

Sri Lanka credit to business up in Oct. Sri Lanka's credit to private businesses rose 29.5 billion rupees to 2,324.4 billion rupees in October 2012 from a month earlier as loans to state enterprises fell by 17.3 billion rupees to 254.6 billion rupees. Dollar credit to private business, which fell from the equivalent of 201 billion rupees to 182.3 billion rupees in September rose by 10.2 billion rupees to 192.5 billion rupees in October. Credit to the central government rose 7.6 billion rupees to 1,042 billion rupees with new commercial bank loans outstripping a contraction in Central Bank credit. Total credit extended to the state and business was about 19.8 billion rupees in October with net repayments from state enterprises. In the first half of the year total loans including central bank credit rose above 100 billion rupees a month as large volumes of money was pumped into the banking system by the monetary authority to sterilize Forex sales and trigger balance of payments pressure. Since about May Sri Lanka's banking system has been showing volume trends seen before a balance of payments crisis started in the second half of 2011. (lbo.lk)

Australia Surging prices for Australia's most important export commodities will lift the economy from its doldrums in the new year but will not be

enough to rescue the government's budget surplus. Growing confidence in China's economy under its new leadership has boosted the iron ore price by more than 50 per cent since its low point in September and coal prices are also recovering. (Source: The Australian)

The Gillard government may have to legislate to protect its mining tax after Western Australia refused point blank to agree to a compromise that would stop federal revenue being gouged by state government royalty increases. At a meeting of state and federal treasurers in Canberra yesterday, it was agreed to refer the problem with the minerals resource rent tax to Treasury officials for further discussion. But Western Australia’s Treasurer, Troy Buswell, said the federal government was wasting its time. (Source: Financial Review)

Wheat prices are expected to fall even further next year, after a significant drop last week. Wheat futures fell 5.1 per cent on the Chicago Board of Trade last week, figures released on Monday by Commonwealth Bank showed. But this was 36.2 per cent up on the same time last year. Senior commodities analyst and editor of Profamer Grain Australia Malcolm Bartholomaeus said prices leading into the harvest next year would be about $220 to $230 a tonne, compared with the high $290s to $300 a tonne on a delivered port basis now. The prediction for next year was “still very robust pricing”, he said. He said last week’s drop of almost $18 in the Chicago Board of Trade price was a result of an increase in global wheat stocks. “In just a five-week period, 7 million tonnes was added to global wheat stocks, above what the trade had been expecting,” he said. The worst-case scenario would be another fall of up to $20 over the next month or so but it was “reasonably unlikely”. He said the peak price for the year was $319 a tonne, which farmers were paid in July, up $70 to $80 on the previous year. (Source: Financial Review)

Regional Market Focus

18 December 2012

7 of 15

79.56 -0.02% 295.54 +0.22%

109.13 +0.21% 1.772 +0.07%

1,698.15 +0.02% 13,235.39 +0.76%

543.05 -0.52% MSCI SEA 860.36 -0.14%

2,628.01 -0.10% 51.0

Source: Bloomberg

MSCI Asia x-Japan

JPM Global Composite PMI SA

ThomReuters/JefferiesCRB

DJI

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

Euro Stoxx 50

Dollar Index

Gold (US$/Oz)

1.20

1.40

1.60

1.80

2.00

2.20

2.40

Dec-11

Jan-1

2

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

700720740760780800820840860880

Dec-11

Jan-1

2

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

11,000

12,000

13,000

14,000

Dec-11

Jan-1

2

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

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

Dec-11

Jan-1

2

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

48

49

50

51

52

53

54

55

56

Dec-11

Jan-1

2

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

1,500

1,600

1,700

1,800

Dec-11

Jan-1

2

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

78

80

82

84

Dec-1

1

Jan-1

2

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

260

280

300

320

340

Dec-1

1

Jan-1

2

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

90

100

110

120

130

Dec-1

1

Jan-1

2

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

420

440

460

480

500

520

540

Dec-11

Jan-1

2

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

Regional Market Focus

18 December 2012

8 of 15

Valuations of Major Regional Markets

14.7 1.44

15.1 2.32

11.8 1.51

15.9 2.83

14.1 1.83

Source: Bloomberg

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

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)

Hang Seng Index, P/B (X)

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

5

10

15

20

Dec-0

8

Ma

r-09

Ju

n-0

9

Se

p-0

9

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

0.5

1.0

1.5

2.0

Dec-0

8

Ma

r-09

Ju

n-0

9

Se

p-0

9

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

0.5

1.0

1.5

2.0

2.5

Dec-0

8

Ma

r-09

Ju

n-0

9

Se

p-0

9

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

5

10

15

20

Dec-0

8

Ma

r-09

Ju

n-0

9

Se

p-0

9

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

0.5

1.0

1.5

2.0

2.5

Dec-0

8

Ma

r-09

Ju

n-0

9

Se

p-0

9

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

5

10

15

20

Dec-0

8

Ma

r-09

Ju

n-0

9

Se

p-0

9

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

1.0

1.5

2.0

2.5

3.0

3.5

Dec-0

8

Ma

r-09

Ju

n-0

9

Se

p-0

9

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

5

10

15

20

Dec-0

8

Ma

r-09

Ju

n-0

9

Se

p-0

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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

0.5

1.0

1.5

2.0

2.5

Dec-0

8

Ma

r-09

Ju

n-0

9

Se

p-0

9

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

5

10

15

20

Dec-0

8

Ma

r-09

Ju

n-0

9

Se

p-0

9

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

Regional Market Focus

18 December 2012

9 of 15

Source: Bloomberg

World Index

JCI 0.16% 4,315.86

HSI -0.41% 22,513.61

KLCI -0.21% 1,648.58

NIKKEI 0.94% 9,828.88

KOSPI -0.60% 1,983.07

SET 0.04% 1,359.09

SHCOMP 0.45% 2,160.34

SENSEX -0.38% 19,244.42

ASX -0.21% 4,573.40

FTSE 100 -0.16% 5,912.15

DOW 0.76% 13,235.39

S&P 500 1.19% 1,430.36

NASDAQ 1.32% 3,010.60 COLOMBO -0.35% 5,503.51

STI -0.31% 3,158.70

Regional Market Focus

18 December 2012

10 of 15

Date Statistic For Survey Prior Date Statistic For Survey Prior

12/18/2012 Current Account Balance 3Q -$103.4B -$117.4B 12/19/2012 Automobile COE Open Bid Cat A 19-Dec -- 78523

12/18/2012 NAHB Housing Market Index Dec 47 46 12/19/2012 Automobile COE Open Bid Cat B 19-Dec -- 90200

12/19/2012 MBA Mortgage Applications 14-Dec -- 6.20% 12/19/2012 Automobile COE Open Bid Cat E 19-Dec -- 97000

12/19/2012 Housing Starts Nov 873K 894K 12/19/2012Bloomberg Dec. Singapore

Economic Survey

12/19/2012 Housing Starts MOM% Nov -2.40% 3.60% 12/24/2012 CPI (MOM) - NSA Nov -- -0.20%

12/19/2012 Building Permits Nov 875K 866K 12/24/2012 CPI (YoY) Nov 3.90% 4.00%

12/19/2012 Building Permits MOM% Nov 0.80% -2.70% 12/26/2012 Industrial Production MoM SA Nov -- 3.30%

12/20/2012 GDP QoQ (Annualized) 3Q T 2.80% 2.70% 12/26/2012 Industrial Production YoY Nov -- -2.10%

12/20/2012 Personal Consumption 3Q T 1.40% 1.40% 12/31/2012 Credit Card Bad Debts Nov -- 18.8M

12/20/2012 GDP Price Index 3Q T 2.70% 2.70% 12/31/2012 Credit Card Billings Nov -- 3356.7M

12/20/2012 Core PCE QoQ 3Q T 1.10% 1.10% 12/31/2012 Bank Loans & Advances (YoY) Nov -- 17.90%

12/20/2012 Initial Jobless Claims 15-Dec 360K 343K 12/31/2012 M1 Money Supply (YoY) Nov -- 4.00%

12/20/2012 Continuing Claims 8-Dec 3200K 3198K 12/31/2012 M2 Money Supply (YoY) Nov -- 5.40%

12/20/2012 Bloomberg Consumer Comfort 16-Dec -- -34.5 1/2/2013 Automobile COE Open Bid Cat A 2-Jan -- --

12/20/2012 Bloomberg Economic Expectations Dec -- 4 1/2/2013 Automobile COE Open Bid Cat B 2-Jan -- --

Date Statistic For Survey Prior Date Statistic For Survey Prior

17-19 DEC Total Car Sales Nov -- 142839 12/18/2012 Unemployment Rate SA Nov -- 3.40%

12/21/2012 Foreign Reserves 14-Dec -- -- 12/19/2012Bloomberg Dec. Hong Kong

Economic Survey

12/21/2012 Forw ard Contracts 14-Dec -- -- 12/19/2012 Composite Interest Rate Nov -- 0.36%

24-27 DEC Customs Exports (YoY) Nov -- 15.57% 12/20/2012 CPI - Composite Index (YoY) Nov -- 3.80%

24-27 DEC Customs Imports (YoY) Nov -- 21.61% 12/21/2012 Bal of Paymts - Current A/C 3Q -- -$9.35B

24-27 DEC Customs Trade Balance Nov -- -$2470M 12/21/2012 Bal of Paymts - Overall 3Q -- -$7.11B

12/28/2012 Foreign Reserves 21-Dec -- -- 12/27/2012 Exports YoY% Nov -- -2.80%

12/28/2012 Forw ard Contracts 21-Dec -- -- 12/27/2012 Imports YoY% Nov -- 3.30%

12/28/2012 Total Exports YOY% Nov -- 14.40% 12/27/2012 Trade Balance Nov -- -42.7B

12/28/2012 Total Exports in US$ Million Nov -- $19128M 12/31/2012 Govt Mthly Budget Surp/Def HK$ Nov -- 21.5B

12/28/2012 Total Imports YOY% Nov -- 21.20% 12/31/2012 Money Supply M1 - in HK$ (YoY) Nov -- 13.10%

12/28/2012 Total Imports in US$ Million Nov -- $19274M 12/31/2012 Money Supply M2 - in HK$ (YoY) Nov -- 10.00%

12/28/2012 Total Trade Balance Nov -- -$146M 12/31/2012 Money Supply M3 - in HK$ (YoY) Nov -- 10.00%

12/28/2012 Current Account Balance (USD) Nov -- -$199M 1/3/2013 Retail Sales - Value (YoY) Nov -- 4.00%

12/28/2012 Overall Balance in US$ Million Nov -- -$1295M 1/3/2013 Retail Sales - Volume (YoY) Nov -- 3.60%

Source: BloombergSource: Bloomberg

Source: Bloomberg

Thailand Hong Kong

Source: Bloomberg

US Singapore

Economic Announcement

Regional Market Focus

18 December 2012

11 of 15

Date Statistic For Survey Prior Date Statistic For Survey Prior

07-13 JAN Money Supply - M1 (YoY) Nov -- 17.60% 14-31 DEC GDP (YoY) 3Q 6.00% 6.40%

05-07 FEB GDP Constant Price (YoY) 4Q -- 6.17% 12/31/2012 CPI Moving Average (YoY) Dec -- 7.20%

05-07 FEB GDP Constant Price (QoQ) 4Q -- 3.21% 12/31/2012 CPI (YoY) Dec -- 9.50%

2/13/2013 Current Account Balance 4Q -- -5336M 04-15 JAN Repurchase Rate 4-Jan -- 7.50%

06-07 MAY GDP Constant Price (YoY) 1Q -- -- 04-15 JAN Reverse Repo Rate 4-Jan -- 9.50%

06-07 MAY GDP Constant Price (QoQ) 1Q -- -- 07-21 JAN Exports YoY% Nov -- -13.40%

07-21 JAN Imports YoY% Nov -- -10.10%

1/31/2013 CPI Moving Average (YoY) Jan -- --

1/31/2013 CPI (YoY) Jan -- --

05-20 FEB Exports YoY% Dec -- --

05-20 FEB Imports YoY% Dec -- --

05-15 FEB Repurchase Rate 5-Feb -- --

05-15 FEB Reverse Repo Rate 5-Feb -- --

2/28/2013 CPI Moving Average (YoY) Feb -- --

2/28/2013 CPI (YoY) Feb -- --

Date Statistic For Survey Prior

12/18/2012 Conference Board Leading Index Oct -- -0.30%

12/19/2012 Westpac Leading Index (MoM) Oct -- 0.70%

12/19/2012DEWR Internet Skilled Vacancies

MoMNov -- -2.50%

12/20/2012 RBA Foreign Exchange Transactn Nov -- 275M

12/31/2012 Private Sector Credit YoY% Nov -- 3.80%

1/2/2013 AiG Performance of Mfg Index Dec -- 43.6

1/2/2013 RPData-Rismark House PX Actual Dec -- 0.00%

1/4/2013 AiG Performance of Service Index Dec -- 47.1

1/7/2013 AiG Perf of Construction Index Dec -- 37

1/8/2013 Trade Balance Nov -- -2088M

1/8/2013 Foreign Reserves Dec -- A$46.2B

1/9/2013 Job vacancies Nov -- 4.20%

1/9/2013 Retail Sales s.a. (MoM) Nov -- 0.00%

1/10/2013 Building Approvals (MoM) Nov -- -7.60%

1/10/2013 Building Approvals (YoY) Nov -- 14.50%

Source: Bloomberg

Source: Bloomberg

Indonesia

Australia

Sri Lanka

Source: Bloomberg

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

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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