KLCI: +0.16% to 1791.5
JCI: +0.89% to 4720.4                                        SET: +2.00% to 1487.2
HSI: -0.12% to 21345                                         HSCEI: +0.12% to 9492.1
Nikkei: +1.32% to 14808.5                                 ASX200: +0.24% to 4993.4
Nifty: +1.08% to 6038.1                                      S&P500: +0.50% to 1689.4


MARKET OUTLOOK:

For our shorter term outlook on markets, please watch our Market Outlook webinar (www.uniphillip.com > Education programs > Phillip Securities Research webinar). We also highlighted OUE and the new OUE H-REIT in the webinar.
 
For our longer term outlook on markets, please see our latest Global Macro Asset Strategy report below.

(PhillipCFDs and ETFs for trading the macro outlook can be found in the Global Macro report. PhillipUT Wrap Account offers tactical asset allocation of unit trusts without front loading sales charge.)


MACRO DATA:

U.S. Initial jobless claims for state unemployment benefits fell by 24000 to a seasonally adjusted 334000. The bigger than expected decline in the latest week sent the gauge to a four-month low. The index of U.S. leading indicators was flat in June after edging up by 0.2 % in May and jumping by 0.8% in April. Economists had expected the index to rise by 0.3%.
 
In Australia, NAB business confidence index fell to -1 in 2Q13, compared to the reading of 2 in 1Q13, indicating a weakened market sentiment due to China's slowdown.
 
In China, 63 of the 70 major cities saw monthly increases in housing price, and 69 saw increased price over a year ago, reflecting a strong momentum of rising home prices. We don't expect any tightening measures as the government is unlikely to further risk the already slowing down economy. China's Finance Minister has indicated that there would not be big scale stimulus in 2013.

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Regional Market Focus

Singapore

• The benchmark STI closed higher at 3,218.20 (+0.31%). The 3.4bn shares traded were worth S$1.1bn in value.
• US stocks benchmark indexes rose to record highs on earnings surprise, beat on jobless claims and previous positive comments from US Fed Chairman.
• The STI was however relatively muted as trading activities remained slow since the start of July.
• We however continue our upbeat expectations for the STI to outperform y-y on gradual economic recoveries, amid some volatility.
• We expect the STI to consolidate at current levels, with key near term support at 3,200 levels.
• Top picks for the year are Pan United (Buy, TP: S$1.21), SGX (Accumulate, TP: S$8.00) & Keppel Corp (Accumulate, TP: S$12.25).

Thailand

• Thai stocks rallied sharply by nearly 2% on Thu on Federal Reserve’s comments to keep its QE program in place as long as US economic data was not strong enough. The SET index finished the session up 29.11 points at 1,487.19 points.
• In our view, Thai stocks should continue to benefit from optimism about the Federal Reserve’s confirmation of no deadline for US QE tapering as well as better-than-expected US economic readings and earnings results.
• There is potential for a rally in the SET index to test a key psychological level of 1500 driven by a pickup in average daily trading volume, foreign buying in both equities and derivatives markets and earnings plays. 
• Volatility is expected to remain high in the Thai stock market especially before the market’s close as some investors may take short-term profits to trim risk exposure ahead of a long holiday weekend.
• Today we peg resistance for the SET index at 1500-1520 and support at 1465-1440.

Indonesia

• The Jakarta Composite Index (JCI) gained Thursday (18/07), amid mixed closes in Asia that followed moderate climbs on US markets overnight after the Federal Reserve chairman Ben Bernanke said the US central bank will maintain flexible bond purchase size. The JCI climbed 41.434 points, or 0.89%, to finish at 4,720.435. The gain on Thursday was supported by seven of the 9 major sectors, led by construction, property and real estate sector that advanced 2.90%, followed by consumer goods sector with 1.79%-rise, and finance sector with 1.36%-gain. Blue-chip stocks also rose, with the LQ45 index that measures these stocks gained 7.420 points, or 0.95%, to 792.135. Weakness in Rupiah also halted gains, as it traded at 10,045 against the US dollar. Thursday’s gain in Indonesia included gains of 159 shares and declines of 88 shares. Volume on the regular board totaled at 3.44 billion shares worth IDR 5.29 trillion. Foreign investors’ transactions accumulated to a net sale of IDR 169.63 billion.
• The Jakarta Composite Index (JCI) will likely advance today, on the back of higher closes on Wall Street overnight and positive start in Asia this morning, with optimism buoyed by positive earnings starts in the US. On the downside, weakness in the Rupiah may still cap gains on Indonesian stocks, particularly those of exporters. We expect the JCI to climb today, with minor price band between 4,655 and 4,753 support and resistance levels.

Sri Lanka

• The Market recovered to some extent from its bear run as the indices reversed the gear, to conclude within the green terrain; this was having lost 80.03 points or 1.33% during the past 4 trading days. The indices trended upwards albeit volatilities being observed on most occasions within the day, while resulting indices to sway on positive and negative regions. The benchmark ASPI gathered a tiny 3.10 points or 0.05% to conclude at 5,985.45. Following a similar pattern, the S&P SL20 too closed positive gaining a minute 2 points or 0.06% to settle the day at 3,378.73. As at the day’s close, the total market capitalization stood at LKR 2.30Tn, charting a year to date gain of 6.27%. The market PER & PBV stood at 15.93 and 2.16 respectively. Off-market activity was evident during the day where 9 negotiated transactions amounting to LKR 410.12Mn overshadowed the on-board dealings of LKR 255.06Mn; further this resulted in an aggregated turnover of LKR 665.18Mn being noted, whilst indicating a significant increase of 246.91% against the previous trading day.  Under the sectorial summary, Diversified Holdings (DIV) sector stood out as the prime contributor providing LKR 392.14Mn, while accounting to 59% of the aggregated turnover for the day. Further, the Bank Finance & Insurance (BFI) sector added LKR 194.71Mn to the daily turnover. During the day, shares totaling up to 16.09Mn changed hands, logging a gain of 25.68% compared with the previous trading day. Price losers outstripped the price gainers by 83:71. Foreign participants were bullish during the day, to result in a net foreign in flow of LKR 349.02Mn (foreign buying amounted to LKR 492.98Mn & selling amounted to LKR 143.96Mn); this resulted in the year to date net foreign inflow to record LKR 16.84Bn. With regard to the local FOREX market, the rupee depreciated further against the USD, to close at LKR 133.17/- selling and LKR 129.97/- buying, just 3 cents below LKR 130/-.

Australia

• The Australian share market on Thursday again nudged above the 5,000 point mark but fell away in afternoon trade to end only slightly higher. Financial and energy stocks were the best performers, with other sectors mixed. The benchmark S&P/ASX200 index was up 11.7 points or 0.23 per cent to 4,993.4 points.
• Today (19/07/13), the Australian market looks set to open higher after gains on Wall Street with the Dow and the S&P 500 again reaching record highs. The SFE 200 Futures is pointing upwards 20 points or 0.40 per cent to 4,972.
• No major economic news is expected on Friday.
• In equities news, Santos is slated to post its second quarter activities report, while Sydney Airport is due to release June traffic numbers.

Hong Kong

• HSI lost 26 points or 0.12% to 21,345. CEI gained 11 points or 0.12% to 9,492. Trading volume keeps low at HKD45.8 billion, the forth day lower than HKD50 billion.
• China Resources Power (836.HK) rebounded in the morning after slump in previous day due to a reporter said the chairman intentionally overpaid a coal-mine assets, but finally dropped 1.78% due to weak sentiment.
• Shanshui Cement (691.HK) plunged 9.8% after profit warnings that interim net profit will drop more than 40% yoy. CNBM (3323.HK) and Anhui Conch (914.HK) also dropped 1.4% and 1.5% respectively.
• Technically, 10-MA at 21,167 will be a significant support to HSI, and the resistance level will be at 21,686.

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Morning Note

Company Highlights

Oxley Holdings Limited announced that it has entered into a sale and purchase agreement dated 18 July 2013 (the “Agreement”) to acquire a 10% interest (the “Shares”) in the issued and paid-up share capital of GD Capital Pte. Ltd. from GD Capital Holdings Sdn. Bhd. for a purchase consideration of RMB35,708,920. GD Capital is a company newly incorporated in Singapore. Pursuant to a restructuring exercise, GDCapital shall be the holding company of GD Properties And Holding (Macau) Company Limited, which shall in turn be the holding company of Xuan Cheng GD Capital Co.Ltd. and Xingang Properties Development Co. Ltd (Closing Price S$0.360, +0.0%)

Global Logistic Properties Limited has leased 24,000 square metres (258,000 square feet) to one of the largest hypermarket operator in China, at GLP Park SND in Suzhou. This lease agreement marks the first collaboration between GLP and the customer. (Closing Price S$2.880, +1.1%)

Hoe Leong Corporation Ltd announced that its associate company, Semua Shipping Sdn Bhd – a leading Malaysian oil tanker and transport logistic company - has been awarded two contracts from Shell Malaysia Trading Sdn Bhd, which is part of Shell Group that is ranked among the 50 largest corporations in the world. The charter contracts are for a period of 3 years for two of Semua Shipping wholly owned vessels – “Semua Selamat” and “Semua Bahagia”. The CVC contracts commence 1st July 2013 and contain options for subsequent 2 years based on mutually agreed terms by both Semua Shipping and the charterer. The total charter hire based on the two CVC contracts including optional periods will amount to approximately MYR150 million. (Closing Price S$0.145, +0.0%)

CitySpring Infrastructure Trust announced that City-OG Gas Energy Services Pte Ltd has been recently granted a Gas Retailer’s License from the Energy Market Authority. With the Gas Retailer’s License, City-OG Gas expects to officially commence business operations on or about 1 August 2013. City-OG Gas is a business venture between the City Gas Trust and Osaka Gas, to market and sell natural gas to Industrial customers. City Gas Trust holds 51% of the shares in City-OG Gas, with the remainder held by Osaka Gas. City Gas Trust is a wholly owned subsidiary of CitySpring Infrastructure Trust and is managed by City Gas Pte Ltd. (Closing Price S$0.470, +0.0%)

UPP Holdings Limited announced that it has entered into a share purchase agreement with Mandalay Myotha Industrial Development Public Company, Limited (“MMID”), a company incorporated under the laws of the Republic of the Union of Myanmar, and Royal Hi-Tech Group Company Ltd (“RHGC”) to acquire from MMID 16.67% of the issued and paid up share capital in MMID’s wholly-owned subsidiary, MMID Urban Development Pte. Ltd. (the “JV Co”), a company incorporated in the Republic of Singapore. The Share Purchase Agreement is part of a series of transactions where the Company will partake in a joint venture with MMID to develop an industrial park and jetty port in the Mandalay region of Myanmar by acquiring a stake in the JV Co. Under the joint venture, MMID will contribute land development rights valued at S$150.0 million, while the Company will be given the option to gradually invest up to an aggregate sum of US$175.0 million to acquire up to 70.0% of the equity interest in the JV Co by a combination of acquisition/subscription of shares in the JV Co. (Closing Price S$0.355, -4.1%)

Source: PhillipCapital Research - 19 Jul 2013