KLCI: -0.00% to 1797.7
JCI: -0.96% to 4678.9                                         SET: -0.36% to 1481.8
HSI: +0.25% to 21416.5                                     HSCEI: -0.35% to 9415
Nikkei: +0.47% to 14658                                    ASX200: +0.60% to 5001.9
Nifty: +0.04% to 6031.8                                      S&P500: +0.20% to 1695.5

MARKET OUTLOOK:

For our short term tactical outlook, please see our webinar slides: (www.uniphillip.com > Education Programs > Phillip Securities Research Webinar). Apart from the market outlook we feature the REIT sector – should you hold it, buy it, or sell it?

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:

Existing home sales fell 1.2% to a seasonally adjusted 5.8 million units in June from May’s revised total of 5.14 million. Analysts had expected U.S. existing home sales to rise 0.6% to 5.25 million units in June.
 
In China, PBoC removed the previous 30% downside limit below benchmark borrowing rate and said the limit on mortgage will stay to curb property speculation. The 10% upside limit over the benchmark deposit rate is kept. The central bank said the nation is not ready to free the deposit rate, the most risky part in interest rate liberalization, which "must be implemented gradually and in an orderly process". The move is the biggest step by China's new leadership so far to liberalize the nation's interest rate.

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Regional Market Focus

Singapore

• The Straits Times Index (STI) ended +21.09 points higher or +0.66% higher to 3,234.35, taking the year-to-date performance to +2.12%. The top active stocks were SingTel (+2.63%), CAN (unchanged), KrisEnergy (+13.42%), UOB (+0.90%) and Genting SP (+1.11%)
• The outperforming sectors today were represented by the FTSE ST Telecommunications which gained +2.41%. The underperforming sector, FTSE Utilities declined -1.03%. The FTSE ST Health Care Index declined -0.05% and the FTSE ST Industrials Index gained +0.05%.
• The STI continues to negotiate resistance at 3260 and a successful breakout and holding above this line implies further upside to a target zone of 3350 to 3400. We expect support from the 3,050 level, while downward bias may persist should the STI not clear above the 3,260 resistance level.
• Though we outline the bullish and bearish cases, we are biased to the upside due to performance and correlations to other indices and commodities.
• Top picks for the year are Pan United (Buy, TP: S$1.21), SIAEC (Buy, TP: S$6.10) & Boustead Singapore (Buy, TP: S$1.80).

Thailand

• Thai stocks traded lower to around 1480-point level last Fri as investors took profits following sharp gains of nearly 2% on Thu to limit risk exposure ahead of a long holiday weekend after the US Federal Reserve said it would keep its QE program in place for the time being.
• Foreign funds flew into Thai and Asian equities last week but buying amount remained modest and was treated as speculation on QE. For this reason, key US economic data on tap this week i.e. durable goods orders still bears close watching.
• Asian equities ended the session in the green on Mon, receiving a boost from the results of the upper house elections in Japan.
• The Dow industrials also rose on Mon on expectations that the US Federal Reserve would not start unwinding its QE program after data showed weaker-than-expected home sales but gains were limited by disappointing McDonald’s results.
• Overall volatility is likely to persist in the Thai stock market as stocks would dance to earnings tune and QE speculation. On balance, we continue to advise investors to look for good earnings and dividend plays. 
• Today we peg resistance for the SET index at 1500-1520 and support at 1465-1440.

Indonesia

• The Jakarta Composite Index (JCI) fell on Monday (22/07), amidst mixed performance in Asia, as investors weighed various key events in Asia and the US. The JCI shed 45.428 points, or 0.96%, to finish at 4,678.983. Commodity sectors rebounded on Monday, as outlook for exports to China improved after People’s Bank of China (PBOC) on Friday said it removes a floor on lending rates, a move which will reduce financing costs for China’s companies. Index of agriculture sector gained 1.03%, and mining sector rose 0.85%. On the downside, consumer goods sector slumped 2.01%, and finance sector lost 1.87%. Most blue-chip shares also fell, with the LQ45 index slipped 13.205 points, or 1.67%, to 778.709, as profit-takings took place on concerns that sluggish Rupiah will hurt earnings of companies with foreign exchange exposures. 148 shares fell and 92 shares rose Monday on the Indonesia Stock Exchange, where 2.51 billion stocks worth close to IDR 3.4 trillion traded on the regular board. Foreign investors posted net sale of IDR 139.02 billion.
• Indonesian stocks may post moderate gains today, as stronger US dollar helps lift Rupiah and dollar-exposed companies. Easing concerns about the tapering of US Federal Reserve’s bond purchases may also support sentiments today. On the downside, worries about inflation spike in July may still limit gains. We expect the JCI to climb today, with support and resistance at 4,635 and 4,762.

Sri Lanka
Market closed.

Australia

• The Australian, share market on Monday closed at its highest levels in two months due to strong gains in the mining and energy sectors. The S&P/ASX200 index closed above 5,000 points for the first time since May 23. The benchmark S&P/ASX200 index was up 29.8 points, or 0.60 per cent, at 5,001.9 points.
• Today (23/07/13),  the Australian market looks set to open higher following gains on Wall Street after a series of mediocre earnings report limited buying enthusiasm. The SFE 200 Futures is pointing upwards 15 points or 0.30 per cent to 4,975.    
• In equities news, Oil Search is slated to post its second quarter production report while Fortescue Metals Group is expected to release its fourth quarter production figures.
• No major economic news is expected on Tuesday. 

Hong Kong

• HSI swung from loss to gain yesterday and finally closed at 21,416 (+54 points). CEI dropped 33 points or 0.35% to 9,415. Trading volume was only HKD38.5 billion and whole day range of HSI was 215 points, reflecting investors’ wait-and-see sentiment.
• After PBOC ended floor on borrowing costs, ICBC (1398.HK), CCB (939.HK) and CITIC Bank (998.HK) declined 1.2%, 0.9% and 3% respectively.
• Chaowei Power (951.HK) and Tianneng Power (819.HK), two leading motive batteries manufacturer surged 9% and 6.4% respectively after State Council said speed up development of energy conservaton and environmental protection industry.
• Technically, 50-MA dropped below 250-MA, sending a negative signal. We expect the support and resistance will be at 21,158 and 21,674 respectively.

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Morning Note

Company Highlights

Nan Fung International Holdings Ltd has conditionally contracted to acquire: (i) 100% of the equity of each of Forterra Real Estate Pte. Ltd. ("FRE", and in its capacity as trustee-manager of Forterra Trust, the "Trustee-Manager") and Treasury Holdings (Shanghai) Property Management Co., Ltd; and (ii) 29.98% of the units in issue of Forterra Trust from Richard Barrett, Rory Williams and John Ronan at an agreed price of $2.98 per unit. (Closing Price: S$2.20, +34.969%)

CapitaLand has completed the strategic review of its interest in its subsidiary Australand and concluded that Australand will continue as a key investment for CapitaLand. During the review, Australand had received indicative proposals for the whole and parts of its business but none of them have been sufficiently compelling. Australand will continue to provide CapitaLand with a stable stream of recurring income, and is well-positioned to benefit from its portfolio of quality commerical and industrial properties and is one of Australia's largest industrial development businesses, and from the improving outlook for the residential sector in key Australian cities. (Closing Price: S$3.15, +0.639%)

Courts Asia has signed MOU with Indonesia conglomerate, Sinar Mas Land, to build two “Big-Box” stores in Indonesia with “Build-to-Suit” concept at Bekasi, which is located East of Jakarta, and BSD City, which is located Southwest of Jakarta. Lease of Bekasi and Serpong (BSD City) sites are for a period of 28 and 30 years respectively. The two “Big-Box” Megastores in Indonesia will increase Courts Asia’s existing retail store footprint by 20% when they open. (Closing Price: S$0.95, +1.604%)

Global Logistic Properties, the largest provider of modern logistics facilities in China, Japan and Brazil, has signed a new lease agreement of approximately 13,000 square metres in Fukuoka, Japan. This lease is the first signed between GLP and CL Co., Ltd, an expanding third-party logistics (“3PL”) company dealing with consumer and pharmaceutical products. (Closing Price: S$2.91, +1.042%)