Monday, August 1, 2011

Asian Exchanges

Asian Exchanges: JP Morgan closes SGX shorts. House maintain Neutral on SGX and close SGX shorts as vol momentum is not weak (30-day MA trading volumes at $1.39b, up 8% from mid-Jul lows) and medium-term risks to SGX in the form of M&A remain in place.

Cautious on HKEx, trading at 37.2x dynamic PE, close to the peak of the historical range, but maintain O/w on structural changes taking place and recommend buying on dips given near-term concerns on volumes. Bursa remains as top pick, trading at mean dynamic P/E of 31.9x, which leaves reasonable upside for the stock to re-rate, also has upside potential in both the near and medium term after recent initiatives divestment of GLICs, which should eventually lead to higher velocity.

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