Asia Afternoon Analytic: 230210

Afternoon readers,

My first wrap up in a while so bear with me on this as i get reacquianted.

Overall the Asian market remained surpisingly resilient, reversing losses made earlier in the day with the HSI closing up 1.21% with volume returning late in the afternoon. We do feel that the market today did not coincide with our expectations due to the late bouncer which although positive worries us given the current dip in the US (DOW: -0.74%) and European markets due to dampened consumer sentiments. This will translate into declines in Chinese export related stocks, predominately ports, container, and paper tomorrow. We do feel that if the dip is strong enough that taking this as an opportunity to enter positions in these industries could be beneficial given our stand on US inventory recovery.

The morning started out choppy with lower US and European markets as China raised the discount and temporarily negative sentiment based on Parkson's weaker than expected earnings the previous day.

Dubai World led a flurry of positive sentiment as the Emirate of Dubai pumped in more funds into the company. This was followed by a broad based late bouncer in Asia which drove the market back into the green.

As for our position analysis for today:

GE: +0.54%, indicating a floor towards the Chinese consumption sector after Parkson's poor results
GDI: +1.55%, we still see value in this stock potentially hitting 4.2 in the near future due to exposure to two sectors we are bullish on: Water & Retail
Power exposure: Our power exposure remained flat today, we are considering exiting this exposure due to the on coming potential negative impacts of coal price increases in the near future.

Based on the current US and European sentiments, expect a broadbased gap down in Asia tomorrow, we do expect the utilities sector to remain relatively resilient on this with the export sector being the most heavily hit.

Dive2Blue out.