MCI (P) 137/11/2012 Ref No: RM2013_0002 1 of 15

Regional Market Focus

Phillip Securities Research Pte Ltd

3 January 2013

Thailand

Thanachart Capital – Trade Flash Recommendation: BUY Previous close: Bt38 Fair value: Bt47 We expect TCAP’s net profit to stay flat q-q in 4QCY12 at Bt1.21bn on the back of HP growth, which would raise the whole-year net

profit by 7.1% y-y to Bt5.36bn. CY13 net profit is projected to jump 80.2% y-y, driven by a disposal of TLIFE of which gains will be booked in 1QCY13. The proceeds will

allow TCAP to be able to expand aggressively its business. We rate TCAP a ‘BUY’ with a CY13 target price of Bt47/share, based on P/B of 1.2x. Thaicom – Trade Flash Recommendation: ACCUMULATE Previous close: Bt25.25 Fair value: Bt27.30 THCOM’s subsidiary signed a framework agreement to provide iPSTAR service capacity for China-based Vast. China is expected to become the largest consumer of iPSTAR gateway of 9.219 Gpps, accounting for 24.7% of the whole capacity that

IPSTAR provides services around the globe. We expect THCOM to register net profit of Bt232mn in CY12. Earnings performance is expected to improve notably in 2013 after a

disposal of MFONE which will allow THCOM to book net profit of Bt1,009mn in CY13. We rate THCOM an ‘ACCUMULATE’ with a CY13 target price of Bt27.30/share.

Hong Kong

K. Wah International Holdings Limited (0173.HK) Rating: Buy Closing price: HKD3.78 Target price: HKD4.56 The Group's sales of properties increased by 264% yoy to HKD2.66 bn, mainly benefited from the sales recognition of Shanghai

Westwood Phase III which provided 1,113 units, GFA of 100,000 sqm and the average sold price was around RMB35,000 per sqm. The Group's rental income maintained stable growth, contributed to 4.8% only of the total revenue. Operating profit surged 630% to HKD2.8 bn, mainly because of the sales recognition of over 90% units of Marinella, a HK luxury residential JV project which the Group holds 35% interest. Interim dividend rose 150% to HKD5 cents driven by the strong growth in Group's net profit. Net debt to shareholder's equity fell to 24.4%, reflecting the Group's healthy financial position. Fortunately, most of the HK luxury residential properties the Group invested like Marinella and The Coronation were sold before 27th Dec, the day HK government imposed BSD. Group's remaining HK luxury residential property is mainly Chantilly in Mid-levels. We expect Group's 2013-2014 revenue is mainly from Shanghai.

We give KWIH “Buy” rating with target price of HKD4.56. Current KWIH share price’s discount to NAV is around 40%. With plenty of Shanghai projects launched in 2013 and optimistic rigid demand in Shanghai, we expect good sales performance in 2013 and HKD7.6 as

the Group’s NAV at Dec 2013. But due to high revenue volatility, we only give 40% discount to NAV at Dec 2013, which is the long-term historical average and get the target price of HKD4.56.

Regional Market Focus

3 January 2013

2 of 15

Strategy Views

- Country Strategy: S’pore, 26 Dec / China & HK, 19 Dec / Thai, 19 Dec - Global Macro, Asset Strategy: US, 21 Dec / ASEAN, 5 Dec / Update, 25 Oct

Morning Commentary

- STI: +1.09% to 3201.7 - MSCI SE Asia: +0.85% to 878.0 - Hang Seng: +2.89% to 23312 - MSCI APxJ: +2.14% to 476.3 - Euro Stoxx 50: +2.86% to 2711.3 - S&P500: +2.54% to 1426.4 Property Sector Update: By Bryan Go, Investment Analyst. URA flash estimate shows private residential property price index grew at a faster pace of 1.8% q-q in 4Q12 to reach 211.9 points, higher than the 0.6% growth in the previous quarter. Prices increased 2.8% for the whole 2012, lower than the 5.9% growth seen in 2011. Prices of non-landed private residential property in OCR increased the most amongst the regions, rose 3.4% q-q, followed by 0.9% q-q in RCR and 0.8% q-q in CCR. HDB’s flash estimate of resale price index shows prices grew 2.5% q-q in 4Q12, implied an increase of 6.6% for the whole 2012. The strong price growth in 2012 is higher than our expectation of 0-2% growth for the private residential property, and we think the risk of further introduction of cooling measures by the government has increased following the strong price growth in 4Q12. We maintain our view that residential prices to remain strong in 1H13 but the increased physical completion and more competitive rental market ahead could result in 0-5% downward correction for 2013. We continue to prefer CapitaLand (TP: $3.97) MARKET OUTLOOK: By Ng Weiwen, Macro Analyst US Congress has reached a fiscal compromise, but that is not a grand bargain. Fiscal uncertainty has merely abated -for the moment. Much as we dislike to be party-poopers, we share the caution of forex traders (where the initial optimism in the forex market is already starting to fade) on account of the following unresolved issues which will return to haunt the US in another 2 months: (i) delayed spending cuts of US$110bn as well as (ii) the need to raise its debt ceiling (which the Republicans will use as a bargaining chip to extract more spending cuts). So over the next couple of weeks, we expect bouts of political brinkmanship which will rattle markets' nerves. Rounding up market action yesterday/overnight- Markets heaved a sigh of relief, with the S&P 500 and DJIA rallying from the opening till the closing bell and the STI gapping up higher (clearing the psychological 3200 level). This exuberance in equity markets was largely due to Congress reaching a compromise bill which -amongst other measures- raised taxes on the wealthiest decile of Americans (individuals earning more than $400,000 and households earning more than $450,000), while leaving the middle class largely unscathed. Outlook for 2013. In 2013, the global economy is likely to remain in a fragile equilibrium, propped up by G4 central banks undertaking a monetary easing bias, resulting in a race to the bottom for currencies. Meanwhile, global demand is likely to remain sluggish with G2 economies (US and EZ) continuing to deleverage and kick the can (fiscal woes) further down the road. Nonetheless, we are seeing signs of green shoots in US, China as well as most Asian economies which saw a return to expansion manufacturing activity as indicated by their recent PMIs. MACRO DATA: In US, the ISM manufacturing index rose from 49.5 (multi-year low) in Nov to 50.7 in Dec, indicating that manufacturing activity has returned to expansionary territory. In the Eurozone, the bloc remain mired in a recession with the manufacturing slowdown becoming more protracted. Specifically, EZ manufacturing PMI declined 0.1pt m-m to 46.1 in Dec, on account of a slump in new orders. North-east Asia saw an expansion in manufacturing activity in Dec after months of contraction, benefitting from a gradual global economic recovery (particularly in China). In South Korea, manufacturing PMI improved from 48.2 in Nov to 50.1 in Dec. In Taiwan, manufacturing PMI accelerated to 50.6 in Dec, up from 47.4 in Nov. In Indonesia, inflation stood at 4.3% in December, broadly unchanged from the preceding month. Recall Bank Indonesia stood pat in December (consistent with our expectations), maintaining the benchmark policy rate at a record low 5.75% for the 11th consecutive month. We expect Bank Indonesia to continue to stand pat on the back of lower inflation expectations as well as resilient domestic demand.

Regional Market Focus

3 January 2013

3 of 15

Singapore The benchmark STI rallied to 3,201.74 (+1.09%) in response to positive news

from the US. The Singapore Market celebrated the lifting of a key overhang on financial

markets for the past year with some form of a resolution to the US Fiscal issues. Among the STI components, cyclical stocks that are sensitive to the economic cycles led the market rally. Commodities and Supply Chain managers, Wilmar (+5.7%) & Olam (+5.8%), were the largest gainers in the index.

The ISM manufacturing index released overnight was also positive at 50.7 and we expect this near term “risk-on” rally to continue in sectors sensitive to economic cycles.

Our top picks for the Singapore Market are Pan United, SIAEC & Capitaland. 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. Capitaland would be a beneficiary of the stabilisation of property prices and bottoming out of economic conditions in China.

Close +/- % +/-FSSTI 3201.74 34.66 1.09P/E (x) 12.17P/Bv (x) 1.45

2.90Dividend Yield

STRAITS TIMES INDEX

2500

2700

2900

3100

3300

1/2 4/2 7/2 10/2 1/2

Source: Bloomberg

Thailand Thai stocks rose sharply on Wed, following rallies in global stock markets. The

rally was led by bank, petrochemical, property and construction materials stocks. The Thai baht appreciated rapidly to around 30.35 per US dollar.

The Thai baht appreciated more rapidly against the US dollar but the unit started to stabilize in early trade on Thu at 30.33 per US dollar like the greenback, which held steady in range after the previous session’s steep slide. Foreign buying spree continued in the Thai stock market but the buying amount remained low though the composite SET index rallied by as much as 15 points on Wed. On the other hand, foreign investors held a slight amount of short positions in derivatives market. Foreign fund flow will still bear close watching going forward. Although sentiment remains bullish in the near term, we believe the market may be vulnerable to the risk of profit taking along the way in the face of uncertainties ahead. In addition, the Thai stock market’s record breaking rally may also give a good excuse for LTF/RMF unit-holders that have held for at least five years to take profits.

The short-term strategy is to gradually book partial profits Today we peg resistance for the SET index at 1412-1419 and support at 1400-

1394.

Close +/- % +/-SET INDEX 1407.45 15.52 1.11P/E (x) 17.56P/Bv (x) 2.38

2.84Dividend Yield

STOCK EXCH OF THAI INDEX

900

1000

1100

1200

1300

1400

1/2 4/2 7/2 10/2 1/2

Source: Bloomberg

Indonesia

Most Indonesian stocks advanced on the first trading day of 2013, with commodity stocks gained the most and basic industry sector fared worst. The Jakarta Composite Index (JCI) gained 29.788 points, or 0.69%, to close at 4,346.475. The advance on Wednesday (02/01) was boosted by positive sentiments in the first trading day of the year, and as most stock markets in Asia rallied after the US House of Representatives voted in favor of legislation to undo much of the fiscal cliff. Six of the 9 major industry groups climbed, with mining sector rallied 5.65%, agriculture sector surged 2.88%, and trade and services sector gained 1.60%. LQ45 – the index trailing Indonesia’s blue-chip shares – added 7.747 points, or 1.05%, to close at 742.789. For every blue-chip stock that declined, more than 3 advanced on Wednesday. More than 143 shares advanced, 103 shares declined, and 220 shares remained unchanged Wednesday on the Indonesia Stock Exchange.

The Jakarta Composite Index potentially will continue advancing today, after rallies on US markets that may fuel sentiments in Asia this morning. We expect the JCI to trade within 4,294 – 4,391 range.

Close +/- % +/-JCI Index 4346.48 29.79 0.69P/E (x) 17.20P/Bv (x) 2.85

2.08Dividend Yield

JAKARTA COMPOSITE INDEX

3400

3600

3800

4000

4200

4400

4600

1/2 4/2 7/2 10/2 1/2

Source: Bloomberg

Regional Market Focus

3 January 2013

4 of 15

Sri Lanka The Colombo bourse commenced the year 2013 today on favorable eminence.

Two indices retained on positive closures largely backed by the accelerated price appreciations on individual stocks observed during the latter part of the day. This recovery was mainly derived on the speculation through the further reductions of interest rates of risk free treasury bills on today’s auction. Participation of foreign parties provided immense contribution to the daily market turnover through the LKR 1.39Bn worth of crossing recorded on COMB, which provided 83% subscription to the daily turnover. The Benchmark ASPI mounted at 5,683.79 gaining 40.79 points and S&P SL20 index increased by 5.55 points to end at 3,090.88. The market capitalization at the closure was LKR 2.18Tn.

The day’s turnover stood at LKR 1.68Bn. The total traded volume for the day consisted with 45.6Mn shares; which was a 208.65% increase against the previous trading day. Price gainers outnumbered the price losers at a ratio of 170:42. A net foreign outflow of LKR 17.2Mn has been recorded during the day.

Close +/- % +/-CSEALL Index 5683.79 40.79 0.72P/E (x) 12.27P/Bv (x) 1.74

2.65

Dividend Yield

SRI LANKA COLOMBO ALL SH

4500

4700

4900

5100

5300

5500

5700

5900

6100

1/2 4/2 7/2 10/2 1/2

Source: Bloomberg

Australia Australia continued to rally to a 19 month high, boosted by run ups in mining

stocks. S&P/ASX 200 index was up 1.2% on Wednesday, the biggest one-day gain in

five months, according to a Reuters report.

Close +/- % +/-S&P/ASX 200 INDEX 4705.94 56.99 1.21P/E (x) 18.15P/Bv (x) 1.87

5.99

STANDARD & POORS/ ASX 200 INDEX

Dividend Yield

3800

4000

4200

4400

4600

4800

1/2 4/2 7/2 10/2 1/2

Source: Bloomberg

Hong Kong

Local stocks surged in the fist-trading day of 2013. The HSI and HSCEI rose 655 points and 461 points to 23311 and 11897 respectively. Market volume was 82.436 billion.

In fact, all the HSI weighted stock rose yesterday, especially for China financial institutions (a rumor that China insurance companies can start fund businesses). China Life (2628) rose 7% to 27 HKD. NCI (1336) surged 13% to 33.15 HKD. Investors are suggested to invest in these sector after a technically drop.

Technically, the HSI is expected to gain a support from 23000 level, major resistance will be 23500 level.

Close +/- % +/-HSI INDEX 23311.98 655.06 2.89P/E (x) 11.97P/Bv (x) 1.56

3.03Dividend Yield

HANG SENG INDEX

17000

18000

19000

20000

21000

22000

23000

1/2 4/2 7/2 10/2 1/2

Source: Bloomberg

Regional Market Focus

3 January 2013

5 of 15

Market News

US US builders spent less on construction projects in November, the first decline in eight months, as activity was held back by a big drop in

spending on federal projects. Construction spending dipped 0.3 per cent in November compared with October, when spending had risen a revised 0.7 percent, the Commerce Department said Wednesday. The November decline was the first drop since March. It left total spending at a seasonally adjusted annual rate of US$866 billion, which is 16.1 per cent above a 12-year low hit in February 2011. Even with the gain, the level of spending remained only about half of what's considered healthy. (Source: BT Online)

Borrowing by small US businesses rose marginally in November, indicating they were essentially on hold in terms of growing their

enterprises in the face of economic and government fiscal uncertainty, a report yesterday showed. The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to small US companies, rose to 108.3 from a downwardly revised 107 in October, PayNet said. PayNet had initially reported the October figure as 107.5. (Source: BT Online)

The US House of Representatives passed a bill undoing income tax increases for more than 99 per cent of households, handing a

victory to President Barack Obama, even as Republicans vowed to fight him in coming weeks for spending cuts in exchange for raising the debt ceiling. For a few hours, it looked as if Washington would send the country over the fiscal cliff after all, until Republican leaders determined that they did not have the votes for spending cuts. In the end, they reluctantly approved the Senate bill by a bipartisan vote of 257 to 167 and sent it on to Mr Obama to sign into law. (Source: BT Online)

Singapore Defying expectations, flash estimates show that the economy grew 1.8 per cent in the fourth quarter of 2012 from the previous quarter, in

seasonally adjusted, annualised terms. This means that Singapore has again dodged recession - which would have ensued with a negative Q4, following a revised, sharper 6.3 per cent contraction in Q3. Economists had widely expected two straight quarters of GDP contraction after a raft of poor data in the second half of last year, and with official word in the Prime Minister's New Year message this week that the economy grew 1.2 per cent last year, just shy of the 1.5 per cent estimated earlier. (Source: BT Online)

URA's overall private-home price index in Q4 rose 1.8 per cent from the previous quarter, after a 0.6 per cent gain in Q3. This is the

biggest increase since the 2 per cent rise in the index in Q2 2011. For the whole of 2012, the index climbed 2.8 per cent, about half the 5.9 per cent rise recorded in 2011. (Source: BT Online)

Resale flat prices grew at their strongest pace in five quarters to reach a historical high, as the Government plans even more Built-to-

Order (BTO) flats this year. The latest flash estimate of the Resale Price Index (RPI) from the Housing and Development Board (HDB) yesterday showed that prices rose 2.5 per cent to 202.9 in the fourth quarter of 2012 from the previous quarter. This was the fastest rate since a 3.8 per cent increase in Q3 of 2011. (Source: BT Online)

Mid-Career professionals can now be hired and trained as accounts or audit professionals, even if they do not have relevant experience.

This is as a result of a pilot programme by the National Trades Union Congress (NTUC)'s Employment and Employability Institute (e2i) and professional accounting body CPA Australia. The "Place-and-Train Accounts & Audit Professionals Programme" provides employers with training allowances and subsidies of up to 70 per cent for successful candidates. Additionally, employers that hire candidates through this initiative can apply for training support of up to $8,450. (Source: BT Online)

Hong Kong China will work toward bolstering global economic growth in 2013, President Hu Jintao said in a New Year’s Eve address, amid optimism

that a recovery in the world’s second-biggest economy is gaining traction. The nation will “step up efforts to promote strong, sustainable and balanced growth in the world economy,” Hu said in the speech broadcast by state radio and television. China achieved stable economic development in 2012 and will seek to do the same this year while making restructuring of its growth model a focus, he said. (Source: Bloomberg.)

A gauge of China’s manufacturing showed a third month of expansion, adding evidence that the recovery in the world’s second-biggest

economy will extend into the new year. The Purchasing Managers’ Index was 50.6 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That compares with the 51.0 median estimate in a Bloomberg News survey of 27 analysts and 50.6 in November. A reading above 50 indicates expansion. (Source: Bloomberg)

Thousands of Hong Kong residents took to the streets yesterday to demand the resignation of Chief Executive Leung Chun-ying, who

they say lost credibility by misleading the public about illegal renovations at his home. Almost 20,000 protesters gathered, with some carrying signs calling Leung a “liar.” Opposition lawmakers will on Jan. 9 introduce a motion calling for an investigation into Leung’s handling of the discovery of unauthorized construction on his property. About 8,500 people rallied to support the chief executive. (Source: Bloomberg.)

Regional Market Focus

3 January 2013

6 of 15

Thailand

Foreign investors remained net buyers of Thai shares worth Bt737.88mn on Wed. (Source: Bisnews)

Thailand’s consumer price index (CPI) rose by 3.63% in Dec 2012 from a year ago, surpassing economists’ forecast of 3.23% while core CPI crept up 1.78% y-y, according to the Ministry of Commerce. Full-year CPI grew 3.02% y-y and core CPI was up 2.09% y-y in 2012. The ministry maintained its annual inflation target range of 2.8%-3.4% for 2013. Meanwhile, Kasikorn Research Center said there is a possibility that consumer prices in Jan 2013 will rise by about 0.5% from end-2012 as a result of higher cost pressure. (Sources: Bisnews, Post Today)

Indonesia The planned hike in electricity tariff this year is expected to trigger inflation by about 0.2 to 0.3 percent. The impact of inflation could be

felt from the beginning of the year because, apart from the power tariff hike, there were also other factors that might cause inflation. Production costs could increase not only because of electricity tariff hikes, but also due to increased wages for workers. Rising wages and a decline in the value of the Rupiah would drive up commodity prices, which in turn would lead to an increase in inflation. The hike in regional minimum wage by almost 44 percent would burden companies and force them to increase the prices of their goods and services. A decline in the Rupiah`s value would also affect the prices of goods and services, because domestic industries depend heavily on capital goods and imported raw materials. (Source: Antara News)

The Indonesian government will not raise subsidized fuel oil price this year. Subsidized premium fuel and diesel fuel price is still set at

IDR 4,500 per liter, cheaper than Pertamina’s non-subsidized fuel price of 9,000 per liter sold in Jakarta and surrounding areas. The Minister of Energy and Mineral Resources said the government had not yet planned to raise subsidized fuel prices due to several reasons: national economic growth was still good, investment were running well, Indonesia Crude Price (ICP) was still positive, and there were no emergency that would cause subsidized fuel oil price to be increased this year. (Source: Indonesia Finance Today)

Sri Lanka Sri Lanka's Treasuries yield has fallen across the board at Wednesday's auction. The 3-month yield fell 9 basis points to 9.91 percent the

6-month yield fell 33 basis points to 10.99 percent and the 12-month yield fell 31 basis points to 11.38 percent. 2.1 billion rupees in 3-month bills, 7.3 billion rupees in 6-month bills and 20.2 billion rupees in 12-month bills were sold respectively. (lbo.lk)

Sri Lanka to add Yuan bonds to forex reserve assets. Central Bank expressed that Sri Lanka will diversify its foreign reserve assets to

reflect government debt and Yuan denominated bonds are a candidate. Sri Lanka has borrowings mainly in US dollars, Japanese Yen, Special Drawing Rights and Euro but China has become a large lender over the past five years. Though loans were initially US dollar denominated, over last year several large Yuan denominated loans have been approved. Sri Lanka's central bank had 6.5 billion US dollars of foreign reserves by the end of 2012. Sri Lanka already has Yen and Euro reserve assets. Though Yen bond have low yields currency appreciation gives returns. The Yen has consistently appreciated against the US dollar since the collapse of the Bretton Woods system in 1973 from about 300 to the US unit to about 80 now, suffering domestic deflation at times. Japan appreciated its currency, suffering domestic deflation at times partly due to pressure from US Mercantilists who believed that a trade deficit could be cured by Yen appreciation. The Yuan is now also being appreciated under US pressure. It has appreciated from 8.2 to the US dollar in July 2005 to about 6.2 in December 2012. (lbo.lk)

Australia Interest rate cuts are losing their power to stimulate the property market, with concerns about the economy, affordability and the refusal

of banks to pass on the full savings blunting their effectiveness, industry experts say. Despite the Reserve Bank slashing the cash rate six times in little more than a year, demand from home buyers remains weak and house prices have ended the year in the red. Australian home values fell for the second year in a row in 2012, marking the worst performance for the national market in 16 years. (Source: smh)

The amount of private sector credit issued was at its weakest level in 19 months in November. Total credit provided to the private sector

by banks and other lenders was unchanged in November, after a rise of 0.1 per cent in October. November was the weakest monthly outcome since April 2011 according to the seasonally adjusted data released by the Reserve Bank of Australia (RBA) on Monday. Over the 12 months to November total credit rose by 3.5 per cent, the Reserve Bank of Australia (RBA) said. (Source: smh)

Regional Market Focus

3 January 2013

7 of 15

79.83 +0.12% 297.54 +0.86%

110.44 -0.16% 1.837 +0.08%

1,686.90 -0.00% 13,412.55 +2.35%

559.70 +2.11% MSCI SEA 877.96 +0.85%

2,711.25 +2.86% 53.7

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

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

Dec-12

700720740760780800820840860880

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

Dec-12

11,000

12,000

13,000

14,000

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

Dec-12

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

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

Dec-12

48

49

50

51

52

53

54

55

56

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

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

Dec-12

78

80

82

84

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

Dec-1

2

260

280

300

320

340

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

Dec-1

2

90

100

110

120

130

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

Dec-1

2

420

440

460

480

500

520

540

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

Dec-12

Regional Market Focus

3 January 2013

8 of 15

Valuations of Major Regional Markets

14.4 1.45

13.0 2.38

11.3 1.56

13.8 2.85

14.3 1.88

Source: Bloomberg

Hang Seng Index, P/B (X)

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

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

5

10

15

20

Dec-0

9

Fe

b-1

0

Ap

r-10

Ju

n-1

0

Au

g-1

0

Oct-1

0

Dec-1

0

Fe

b-1

1

Ap

r-11

Ju

n-1

1

Au

g-1

1

Oct-1

1

Dec-1

1

Fe

b-1

2

Ap

r-12

Ju

n-1

2

Au

g-1

2

Oct-1

2

Dec-1

2

0.5

1.0

1.5

2.0

Dec-0

9

Fe

b-1

0

Ap

r-10

Ju

n-1

0

Au

g-1

0

Oct-1

0

Dec-1

0

Fe

b-1

1

Ap

r-11

Ju

n-1

1

Au

g-1

1

Oct-1

1

Dec-1

1

Fe

b-1

2

Ap

r-12

Ju

n-1

2

Au

g-1

2

Oct-1

2

Dec-1

2

0.5

1.0

1.5

2.0

2.5

Dec-0

9

Fe

b-1

0

Ap

r-10

Ju

n-1

0

Au

g-1

0

Oct-1

0

Dec-1

0

Fe

b-1

1

Ap

r-11

Ju

n-1

1

Au

g-1

1

Oct-1

1

Dec-1

1

Fe

b-1

2

Ap

r-12

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n-1

2

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g-1

2

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5

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20

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9

Fe

b-1

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Ap

r-10

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n-1

0

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Fe

b-1

1

Ap

r-11

Ju

n-1

1

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1

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1

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1

Fe

b-1

2

Ap

r-12

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n-1

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2

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0.5

1.0

1.5

2.0

2.5

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9

Fe

b-1

0

Ap

r-10

Ju

n-1

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Au

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0

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0

Dec-1

0

Fe

b-1

1

Ap

r-11

Ju

n-1

1

Au

g-1

1

Oct-1

1

Dec-1

1

Fe

b-1

2

Ap

r-12

Ju

n-1

2

Au

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2

5

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9

Fe

b-1

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Ap

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n-1

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0

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0

Fe

b-1

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Ap

r-11

Ju

n-1

1

Au

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Oct-1

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1

Fe

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Ap

r-12

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n-1

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2

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1.5

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9

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r-12

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2

Regional Market Focus

3 January 2013

9 of 15

Source: Bloomberg

World Index

JCI 0.69% 4,346.48

HSI 2.89% 23,311.98

KLCI -0.84% 1,674.72

NIKKEI 0.70% 10,395.18

KOSPI 1.71% 2,031.10

SET 1.11% 1,407.45

SHCOMP 1.61% 2,269.13

SENSEX 0.68% 19,714.24

ASX 1.23% 4,705.94

FTSE 100 2.20% 6,027.37

DOW 2.35% 13,412.55

S&P 500 2.54% 1,462.42

NASDAQ 3.07% 3,112.26 COLOMBO 0.72% 5,683.79

STI 1.09% 3,201.74

Regional Market Focus

3 January 2013

10 of 15

Date Statistic For Survey Prior Date Statistic For Survey Prior

1/3/2013 MBA Mortgage Applications 28-Dec -- -12.30% 1/3/2013 Electronics Sector Index Dec 47.7 47.4

1/3/2013 Challenger Job Cuts YoY Dec -- 34.40% 1/3/2013 Purchasing Managers Index Dec 49.5 48.8

1/3/2013 RBC Consumer Outlook Index Jan -- 46.9 1/7/2013 Foreign Reserves Dec -- $255.77B

1/3/2013 ADP Employment Change Dec 140K 118K 1/9/2013 Automobile COE Open Bid Cat A 2-Jan -- 81889

1/3/2013 Initial Jobless Claims 29-Dec 360K 350K 1/9/2013 Automobile COE Open Bid Cat B 2-Jan -- 93501

1/3/2013 Continuing Claims 22-Dec 3215K 3206K 1/9/2013 Automobile COE Open Bid Cat E 2-Jan -- 95990

1/3/2013 Bloomberg Consumer Comfort 30-Dec -- -32.1 1/15/2013 Retail Sales (MoM) sa Nov -- 0.60%

1/3/2013 ISM New York Dec -- 52.5 1/15/2013 Retail Sales (YoY) Nov -- -1.00%

1/4/2013 Total Vehicle Sales Dec 15.25M 15.46M 1/15/2013 Retail Sales Ex Auto (YoY) Nov -- 1.30%

1/4/2013 Domestic Vehicle Sales Dec 11.75M 12.01M 1/17/2013 Non-oil Domestic Exp SA (MoM) Dec -- -0.30%

1/4/2013 Change in Nonfarm Payrolls Dec 150K 146K 1/17/2013 Electronic Exports (YoY) Dec -- -16.50%

1/4/2013 Change in Private Payrolls Dec 153K 147K 1/17/2013 Non-oil Domestic Exports (YoY) Dec -- -2.50%

1/4/2013 Change in Manufact. Payrolls Dec 4K -7K 1/23/2013 CPI (MOM) - NSA Dec -- 0.10%

1/4/2013 Unemployment Rate Dec 7.70% 7.70% 1/23/2013 CPI (YoY) Dec -- 3.60%

1/4/2013 Avg Hourly Earning MOM All Emp Dec 0.20% 0.20% 1/23/2013 Automobile COE Open Bid Cat A 16-Jan -- --

Date Statistic For Survey Prior Date Statistic For Survey Prior

1/9/2013 Benchmark Interest Rate 9-Jan -- 2.75% 1/3/2013 Retail Sales - Value (YoY) Nov 4.20% 4.00%

17-18 JAN Total Car Sales Dec -- -- 1/3/2013 Retail Sales - Volume (YoY) Nov 3.70% 3.60%

24-27 JAN Customs Exports (YoY) Dec -- 26.86% 1/4/2013 Purchasing Managers Index Dec -- 52.2

24-27 JAN Customs Imports (YoY) Dec -- 24.53% 1/7/2013 Foreign Currency Reserves Dec -- $305.2B

24-27 JAN Customs Trade Balance Dec -- -$1454M 1/17/2013 Unemployment Rate SA Dec -- 3.40%

25-28 JAN Total Capacity Utilization ISIC Dec -- 68.6 17-18 JAN Composite Interest Rate Dec -- 0.34%

25-28 JAN Mfg. Production Index ISIC NSA Dec -- 83.3 1/21/2013 CPI - Composite Index (YoY) Dec -- 3.70%

25-28 JAN Mfg. Production Index ISIC SA Dec -- 192.53 1/24/2013 Trade Balance Dec -- -44.1B

1/31/2013 Total Exports in US$ Million Dec -- $19332M 1/24/2013 Exports YoY% Dec -- 10.50%

1/31/2013 Total Exports YOY% Dec -- 27.10% 1/24/2013 Imports YoY% Dec -- 9.00%

1/31/2013 Total Imports in US$ Million Dec -- $18705M 1/30/2013 Money Supply M3 - in HK$ (YoY) Dec -- --

1/31/2013 Total Imports YOY% Dec -- 24.10% 1/30/2013 Money Supply M2 - in HK$ (YoY) Dec -- --

1/31/2013 Total Trade Balance Dec -- $627M 1/30/2013 Money Supply M1 - in HK$ (YoY) Dec -- --

1/31/2013 Overall Balance in US$ Million Dec -- $1203M 1/31/2013 Govt Mthly Budget Surp/Def HK$ Dec -- --

1/31/2013 Current Account Balance (USD) Dec -- $392M 1/31/2013 Retail Sales - Value (YoY) Dec -- --

US Singapore

Economic Announcement

Thailand Hong Kong

Source: Bloomberg

Source: BloombergSource: Bloomberg

Source: Bloomberg

Regional Market Focus

3 January 2013

11 of 15

Date Statistic For Survey Prior Date Statistic For Survey Prior

07-13 JAN Money Supply - M1 (YoY) Nov -- 17.60% 04-15 JAN Repurchase Rate 4-Jan -- 7.50%

05-07 FEB GDP Constant Price (YoY) 4Q -- 6.17% 04-15 JAN Reverse Repo Rate 4-Jan -- 9.50%

05-07 FEB GDP Constant Price (QoQ) 4Q -- 3.21% 1/31/2013 Bloomberg Jan. Sri Lanka

2/13/2013 Current Account Balance 4Q -- -5336M 1/31/2013 CPI Moving Average (YoY) Jan -- --

06-07 MAY GDP Constant Price (YoY) 1Q -- -- 1/31/2013 CPI (YoY) Jan -- --

06-07 MAY GDP Constant Price (QoQ) 1Q -- -- 05-20 FEB Exports YoY% Dec -- -6.60%

05-20 FEB Imports YoY% Dec -- -8.40%

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 -- --

05-20 MAR Exports YoY% Jan -- --

05-20 MAR Imports YoY% Jan -- --

05-15 MAR Repurchase Rate 5-Mar -- --

05-15 MAR Reverse Repo Rate 5-Mar -- --

Date Statistic For Survey Prior

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

1/8/2013 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 HIA New Home Sales (MoM) Nov -- 3.40%

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%

13-20 JAN Westpac Consumer Confidence Jan -- -4.10%

1/14/2013 TD Securities Inflation YoY% Dec -- 2.50%

1/14/2013 TD Securities Inflation MoM% Dec -- -0.10%

1/14/2013 RBA Credit Card Balances Nov -- $A49.0B

1/14/2013 RBA Credit Card Purchases Nov -- $A22.5B

1/14/2013 Home Loans MoM Nov -- 0.10%

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