Slovakia's government is near collapse as politicians attempt to pass the last vote needed to expand the EFSF. Markets were mixed as investors watched developments in Slovakia. Alcoa reported third quarter earnings that missed estimates, hurt by weak demand in Europe. Chinese property developer China Vanke reported a 12% year-over-year decline in September home sales, and China may be shifting policies in response to a slowing property market.

1. Overnight Market Wrap
Wednesday October 12, 2011
Page 1 of 2
The future of the Euro lies
with…Slovakia!
Wayne Yu + 1 201 988 1603
One more “yes” vote needed to pass the Emerging Markets Sales and Trading
EFSF, as earnings season begins! yuxx@aol.com
Markets were mixed, holding onto recent gains. All eyes
on Slovakia, whose government is near collapse as local
politicians attempt to pass the last vote needed to expand
the EFSF. The first vote today failed, with a second one
likely that would also call for early elections. Looking for
Market Overview
signs of Risk On, as US Treasuries fell for a fifth straight
day, while crude and small caps outperformed. Although
Top ADR Movers Change
copper fell, ending a four day rally. Greece, which looks
set to receive 8B EUR in loans in November, managed to
China Eastern Airlines (CEA) ▲ 6.60%
sell 1.3B EUR of bonds in today’s auction. Meanwhile,
China Southern Airlines (ZNH) ▲ 4.65%
Italy managed to raise 9.5B EUR at its auction. Dexia’s
Formula Systems (FORTY) ▲ 3.27%
bailout continues as several firms circle the bank’s assets
Sony (SNE) ▲ 3.05%
for potential acquisitions. US President Obama’s $447B
Aluminum Corporation (ACH) ▲ 2.97%
jobs bill is expected to fail in Tuesday night’s Senate vote.
PetroChina (PTR) ▼ 3.42%
After the close, Alcoa (AA.US) reported Q3 numbers that
James Hardie (JHX) ▼ 3.97%
missed, hurt by Europe. However, the company raised its
Sappi (SPP) ▼ 4.23%
China aluminum demand forecast to 17% YOY growth.
Patni Computer (PTI) ▼ 4.66%
Look for a mixed open in Asia, with risk that China bears
Sinopec Shanghai (SHI) ▼ 5.29%
will use recent gains to press the market again.
Most Active ADRs Change
A shift in Chinese property policy?
With mounting evidence that the property market is Melco Crown (MPEL) ▲ 0.98%
slowing, we saw the first sign of a shift in government Taiwan Semiconductor (TSM) ▼ 1.33%
policy. Shortly after China Vanke (000002.CH), the Teva Pharmaceutical (TEVA) ▲ 0.87%
biggest publicly traded developer, said September sales BHP Billiton (BHP) ▼ 1.52%
fell 12% YOY, the city of Foshan said it will allow Tata Motors (TTM) ▼ 1.07%
residents to buy a second home, becoming the first city to Infosys Technologies (INFY) ▼ 2.17%
relax policies to curb property prices. Foshan will allow United Microelectronics (UMC) ▲ 1.47%
local families to buy one more property priced less than Gold Fields (GFI) ▼ 0.26%
7,500 yuan per square meter ($109 USD per square Turkcell (TKC) ▼ 0.44%
foot). US listed property stocks China Real Estate AngloGold Ashanti (AU) ▼ 0.68%
Information (CRIC.US) and E-House (EJ.US) rose 2.9%
and 7.6%, while SouFun (SFUN.US) lagged, falling 2.2%. Most Active US Listed Change
Chinese Shares
Indian Internets ramping up. Baidu (BIDU) ▲ 3.96%
While the recent sell off in Chinese Internets captured the Renren (RENN) ▲ 3.27%
spotlight, the much smaller pool of Indian names fell off E-Commerce China (DANG) ▲ 11.23%
the radar. Attention may now be shifting, after the Indian Youku.com (YOKU) ▲ 7.15%
government announced plans to make more spectrum Suntech Power (STP) ▼ 9.20%
available to mobile carriers and to allow sharing and Yingli Green Energy (YGE) ▲ 5.88%
trading of airwaves to provide extra capacity. All of which Trina Solar (TSL) ▲ 3.03%
is designed to accelerate growth in high speed smart JA Solar (JASO) ▲ 0.54%
phone and Internet use. The best names were Rediff.com Focus Media (FMCN) ▲ 1.26%
(REDF.US) +15.4% and Sify (SIFY.US) +5.8%. New Oriental Education (EDU) ▲ 3.54%

2. Overnight Market Wrap
Wednesday October 12, 2011
Page 2 of 2
A novel way to pay for teachers.
China’s announcement that it will expand a tax on sales
of oil and natural gas nationwide starting next month
boosted one unlikely sector…education. The revenue will Market Overview continued
be directed to poorer parts of the country left out of the
economic boom, in order to pay for costly education and Top US Listed Chinese Change
healthcare expenditures. The government went on to say Movers
that it will impose a tax on other commodities when the Xueda Education (XUE) ▲ 16.54%
time is right. US listed Chinese education names were China Techfaith (CNTF) ▲ 13.44%
higher, with New Oriental Education (EDU.US) +3.5%, The9 (NCTY) ▲ 11.66%
Global Education (GEDU.US) +5.5%, and Xueda E-Commerce China (DANG) ▲ 11.23%
Education (XUE.US) +16.5%. China Finance Online (JRJC) ▲ 8.82%
China Ming Yang Wind (MY) ▼ 4.07%
Other highlights… CNInsure (CISG) ▼ 4.75%
Mixed action in US listed Chinese solar names.
Hanwha SolarOne (HSOL) ▼ 6.10%
JinkoSolar (JKS.US) rose 7.1% after saying it had
Suntech Power (STP) ▼ 9.20%
resumed production at its Haining, China facility, which
IFM Investments (CTC) ▼ 13.79%
was closed after an accident caused the leakage of
fluoride. Meanwhile, Suntech Power (STP.US) fell 9.2%
Country ETF Premiums / Discounts to NAV
after being downgraded to Underperform at Raymond
Premium /
James.
Country Discount
China Techfaith Wireless (CNTF.US) surged 13.4% after Australia (EWA) ▲ 0.05%
announcing an order for its WCDMA/GSM 3.5G Android China (FXI) ▲ 1.36%
smart phones, to be sold in Latin America through a local Hong Kong (EWH) ▲ 1.39%
operator and brander. Japan (EWJ) ▼ 0.80%
India (INDY) UNCH
Spreadtrum Communications (SPRD.US) rose 3.1% after
Singapore (EWS) ▲ 0.48%
announcing the introduction of its TD-SCDMA dual-SIM
South Africa (EZA) ▲ 0.71%
technology for mobile phones, which allows consumers to
South Korea (EWY) ▼ 0.19%
receive calls and texts, or browse data, on more than one
Taiwan (EWT) ▲ 0.21%
number while using only one phone.
Zhongpin (HOGS.US) fell 0.5%. The company supplies Noteworthy ADR Premiums / Discounts
meat products to Wal-Mart, which was forced to close 13 to Parity
stores in China for 15 days on accusations that ordinary
pork was mislabeled as organic. ADR Premium /
Discount
Infosys (INFY.US) closed at a 3.7% premium in the ADR
Infosys (INFY) ▲ 3.71%
market ahead of Q2 results on Wednesday.
Sasol (SSL) ▲ 3.38%
Sterlite (SLT) ▲ 2.55%
Sinopec Shanghai (SHI) ▲ 1.32%
Recent US Listed Chinese IPOs Change Guangshen Railway (GSH) ▲ 1.08%
vs IPO
Qihoo 360 Technology Co (QIHU) ▲ 15.59% BHP Billiton (BHP) ▼ 0.56%
Jiayuan.com International (DATE) ▼ 18.64% Nomura (NMR) ▼ 0.65%
China Zenix Auto International (ZX) ▼ 26.33% Sims Metal (SMS) ▼ 1.30%
21Vianet Group (VNET) ▼ 27.93% Honda Motor (HMC) ▼ 1.61%
Taomee Holdings (TAOM) ▼ 33.44% China Southern Airlines (ZNH) ▼ 2.06%
Tudou Holdings (TUDO) ▼ 49.53%
BCD Semiconductor (BCDS) ▼ 53.90%
Phoenix New Media (FENG) ▼ 58.18%
Renren (RENN) ▼ 59.43%
NetQin Mobile (NQ) ▼ 60.35%