Global Equity Market Performance
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Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited October 25, 2010 Global Equity Market Performance Global Equity Market Update Piper Jaffray Asia Capital Markets Group U.S. stocks rose for the third consecutive week on the back of J. West Riggs (Head of Asia ECM), [email protected], Tel: 852 3755 - 2333 robust corporate earnings, but the rise tapered due to currency Derrick Lau (MD ECM), [email protected], Tel: 852 3755 - 2338 tensions at a summit of the world's major economies. The technology sector led the market’s recent rally, with Baidu reporting Michael Cheung (Principal), [email protected], Tel: 852 3755 - 2323 better-than-expected results. For the week, the Dow and S&P500 Amanda Lui (Associate), amanda. my. lui@pjc. com, Tel: 852 3755 - 2318 both rose 0.6 percent, to close at 11,132.6 and 1,183.1 respectively, while the NASDAQ climbed 0.4 percent, to close at 2,479.4. Crude Michael Basset (Associate), [email protected], Tel: 852 3755 - 2322 futures closed at US$81.69 per barrel, marginally down by 0.3 Gaby Zhang (Analyst), [email protected], Tel: 852 3755 - 2321 percent over the week. European shares retreated last Friday after reaching their six-month Global Market Performance high on Thursday last week as investors remained cautious prior to the G20 meeting. Uncertainty over the outcome of the G20 nations’ Performance (%) finance chiefs meeting in South Korea has left experts skeptical as to Last price 1 day 1 week 1 month YTD whether a binding agreement to manage global trade would be Global Indices reachdhed btbetween thecountitries. However, strong earnings gave some Dow Jones 11,132.6 (0.1%) 0.6% 3.7% 6.8% support to the markets; Ericsson soared 4.2 percent after it posted higher-than-expected earnings. The FTSE posted marginal gains of S&P500 1,183.1 0.2% 0.6% 4.3% 6.1% 0.7 percent for the week, to close at 5,741.4, while the Euro STOXX NASDAQ 2,479.4 0.8% 0.4% 6.2% 9.3% 50 was up 1.1 percent to close at 2873.74. FTSE 5,741.4 (0.3%) 0.7% 3.4% 6.1% Asian stocks ended mixed last Friday as investors remained Asian Indices circumspect ahead of the G20 economies meeting. Further, the Hang Seng 23,517.5 0.6% (1.0%) 6.7% 7.5% slower rate of growth and unexpected tightening of monetary policy in the Chinese economy also weighed on the investor sentiment. HSCEI 13,494.8 (0.9%) (0.9%) 10.6% 5.5% The Nikkei inched down 0.8 percent during the week to close at Shanghai A 3,117 .2 ((3)0.3%) 0.1% 14.8% (9.3 %) 9,426.7, while MSCI Asia Pacific ex. Japan index rose by 3.7 percent Nikkei 225 9,426.7 0.5% (0.8%) (1.5%) (10.6%) to close at 415.2. HK Weekly Market Update Global Indices Performance (Rebased to 100) Hong Kong shares mostly declined last Friday as investors remained cautious and booked profits ahead of earnings reports 200 from banks, due this week, and the G20 meeting. Chinese Central Bank’s decision to raise the interest rates by 25 basis points, further 180 weighed on the investor sentiment. The Hang Seng Index declined 160 1.0 percent over the last week to close at 23,517.5. Among Index constituents, 14 gained, 30 declined while one 140 remained unchanged. Among gainers, Hutchison Whampoa was up 120 7.3 percent, Ping An Insurance Group rose 5.3 percent, while Citic Pacific was up 4.4 percent. Among losers, China Resources Land 100 declined 6.7 percent, China Resources Power fell by 6.1 percent and China Overseas Land & Investment slid by 6.0 percent. 80 China’s National Bureau of Statistics reported on Thursday that the 60 country’s annual GDP growth slowed to 9.6 percent in 3Q10 as 1-Jan-09 12-May-09 21-Sep-09 31-Jan-10 12-Jun-10 22-Oct-10 compared to 10.3 percent in 2Q10. The country’s inflation rose 0.6 S&P 500 NASDAQ FTSE Hang Seng Shanghai A percent in September 2010 from August 2010. HSI Weekly Performance HSI Sectoral Weekly Performance 20 24,000 1% 23,763.7 23,556.5 23,649.5 23,517.5 0.1% 15 23,469.4 0% 23,500 10 15.2 12.7 12.1 10.9 10.8 (1%) (0.7%) 5 23,000 (1.4%) 18-Oct-10 19-Oct-10 20-Oct-10 21-Oct-10 22-Oct-10 (2%) (1.5%) Turnover (in US$ billion) Close Utilities Finance Property Comm/Indu Source: DataStream, Reuters, Hang Seng Index Website 1 Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited October 25, 2010 Piper Jaff r ay Chin a In dex PJ China Index Performance Since January 2009 Sector Breakdown and Performance Current Level: 2,568.92 3,000 Financial/Real Estate 4% Clean Tech//gyEnergy 2,500 12% Telecom, Media & Technology 31% Consum er 2,000 12% 1,500 Health Care 13% 1,000 Business Services and Industrial Growth 28% 500 1-Jan-09 12-May-09 21-Sep-09 31-Jan-10 12-Jun-10 22-Oct-10 2.0% 0.94% PJ China Index 0.72% 0.03% 0.0% 52.04 (0.22%) Week-to-date change 2.07% (2.0)% (1.23% ) 2010 Year-to-date change 444.87 20.94% (4.0)% LTM change 530.19 26.01% (6.0)% (6.08% ) 6-month change 340.84 15.30% (8.0)% 2010 Year-to-date high (pts) 2,568.92 22-Oct-10 Consum er Telecom , Media & Technology 2010 Year-to-date low (pts) 1,914.24 29-Jan-10 Business Services and Industrial Growth Financial/Real Estate Health Care Clean Tech/Energy Top Five Weekly Gainers and Losers 30.0% 20.8% 20.0% 14.4% 11. 6% 11. 2% 11.0% 10.0% 0.0% (10.0%) (9.4%) (9.6%) (10.0%) (11.2%) (11.4%) (20.0%) Jinpan Lihua CDC Software Telestone Qiao Xing SmartHeat China Global Sources Yingli Green LDK Solar International International Technologies Universal Information Energy Corporation Resources Technology Note: Piper Jaffray China Index is a modified market capitalization weighted index comprised of U.S. exchange listed securities of companies with significant exposure to the Chinese economy and market capitalization over US$100m. The index was developed with a base level of 1,000 as of January 1, 09 (Please refer to the last page of this report for constituents) Source: Bloomberg 2 Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited October 25, 2010 Macro Indicators and Global Currencies Performance – Since January 2009 Gold (UBS-IB) Copper (NYC) CBOE Volatility Index (VIX) US$/oz US$/lb Current Level: US$1,372.20 per ounce Current Level: US$3.849 per pound Current Level: 18.78 1,400 4 60 1,300 50 1,200 3 40 1,100 30 1,000 2 20 900 800 1 10 1-Jan-09 12-May-09 21-Sep-09 31-Jan-10 12-Jun-10 22-Oct-10 2-Jan-09 13-May-09 22-Sep-09 31-Jan-10 12-Jun-10 22-Oct-10 2-Jan-09 13-May-09 22-Sep-09 31-Jan-10 12-Jun-10 22-Oct-10 Spot WTI Crude Stowe Global Coal Index Baltic Dry Index US$/barrel Current Level: US$81.69 per barrel Current Level: 5,454.68 Current Level: 2,727.0 90 6,000 5,000 80 5,000 4,000 70 4,000 3,000 60 3,000 2,000 50 2,000 40 1,000 30 1,000 0 2-Jan-09 13-May-09 22-Sep-09 31-Jan-10 12-Jun-10 22-Oct-10 2-Jan-09 13-May-09 22-Sep-09 31-Jan-10 12-Jun-10 22-Oct-10 2-JJ9an-09 133y9-May-09 22-Sepp9-09 33J1-Jan-10 12-Jun-10 22-Oct-10 Euro Sterling Japanese Yen EUR/US$ GBP/US$ JPY/US$ Current Level: 1.3949 Current Level: 1.5683 Current Level: 81.35 1.6 1.7 105 1.5 1.6 100 1.4 1.5 95 1.3 1.4 90 1.2 1.3 85 1.1 1.0 1.2 80 1-Jan-09 12-May-09 21-Sep-09 31-Jan-10 12-Jun-10 22-Oct-10 1-Jan-09 12-May-09 21-Sep-09 31-Jan-10 12-Jun-10 22-Oct-10 1-Jan-09 12-May-09 21-Sep-09 31-Jan-10 12-Jun-10 22-Oct-10 Source: DataStream, Reuters 3 Weekly Equity Capital Markets Newsletter Piper Jaffray Asia Securities Limited October 25, 2010 HK an d U. S. China IPO A cti vit y HK and U.S. China IPO Activity by Month 15 24,000 20,000 12 16, 000 Capital RaisedCapital (US$m 9 12, 000 # of IPOs # of 6 8,000 3 4,000 0 0 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 US China IPOs HK IPOs US China IPOs Capital Raised HK IPOs Capital Raised USU.S. China IPOAIPO Act iv ity Past Wee k Deal Value Price Range IPO Price IPO Price Lead Pricing Date Ticker Issuer Co-Manager(s) (US$m) (US$) (US$) to Current Manager(s) ShangPharma William Blair; 18/10/2010 SHP $87.0 $14.50 - $16.50 $15.00 (8.20%) Citi; JPMorgan Corporation Oppenheimer Credit Suisse; Piper Jaffray; 19/10/2010 XRS TAL Education Group $138.0 $8.00 - $10.00 $10.00 47.60% Morgan Stanley Oppenheimer HK IPO Activity Past Week Deal Value Price Range IPO Price IPO Price Pricing Date Listing Date Ticker Issuer Lead Manager(s) (US$m) (HK$) (HK$) to Current Springland International 13/10/10 21/10/10 1700 $549.3 $4.85 - $5.93 $5.93 11.64% DBS; Morgan Stanley Holdings Original $2.20 - BOC International; 13/10/10 21/10/10 1029 IRC $241.