KLCI: +0.42% to 1805.3
JCI: +1.88% to 4767.2                                        SET: +2.12% to 1513.3
HSI: +2.33% to 21915                                        HSCEI: +3.88% to 9780.2
Nikkei: +0.82% to 14778                                    ASX200: +0.30% to 5017.1
Nifty: +0.76% to 6077.8                                      S&P500: -0.19% to 1692.4

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:

In China, Premier Li Keqiang said during a meeting with economists that 7% growth is the bottom line and the government will not allow growth below that. The premier's assertion signals that the government would likely support the economy if needed and hence safeguard the nation's economy from a deeper slowdown.

In Singapore, inflation was 0.2%m-m seasonally adjusted in June. The median estimate was 0.3%. Core inflation was 1.7%y-y in June. Singapore central bank cut 2013 inflation forecast to 2%-3% today from 3%-4% after a “sharp fall” in car prices following tightening of vehicle loans and accommodation costs increasing at slower pace.

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Regional Market Focus

Singapore

• The Straits Times Index (STI) ended +19.41 points higher or +0.60% higher to 3,253.76, taking the year-to-date performance to +2.74%.
• Singapore’s inflation was 0.2%m-m seasonally adjusted in June. The median estimate was 0.3%. Core inflation was 1.7%y-y in June. Singapore central bank cut 2013 inflation forecast to 2%-3% today from 3%-4% after a “sharp fall” in car prices following tightening of vehicle loans and accommodation costs increasing at slower pace.
• 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 currently are Pan United (Buy, TP: S$1.21), SGX (Accumulate, TP: S$8.30) & Keppel Corp (Accumulate, TP: S$12.25).

Thailand

• Thai stocks rose 2.12% in line with overseas markets on Tue as a drop in US existing home sales raised optimism that the Federal Reserve would continue to keep its QE program in place.
• The SET index is expected to see more range-bound volatility today as yesterday’s sharp gains of more than 30 points would leave the market vulnerable to sporadic bouts of short-term profit taking. Key factor to watch this morning is China’s HSBC flash manufacturing PMI data as the market pays so much attention to economic growth outlook for China and this could bring an immense amount of volatility to the market. In our view, the worse-than-expected data may boost optimism about economic stimulus measures from the Chinese government.
• Foreign buying returned to Thai stocks but the amount remained small while foreigners raised their net long positions in derivatives market to nearly 1,900 contracts. Overall bullish sentiment remains intact, in our view.
• For investment strategy, we advise investors to raise equity exposure to 75% of the short-term portfolio if the SET index could hold above 1500 points.
• Resistance for the SET index is pegged at 1520-1530 and support at 1500-1488 today

Indonesia

• Most Indonesian stocks rose Tuesday (23/07), as stock indexes in Asia advanced on optimism about China’s economic growth. The Jakarta Composite Index (JCI) surged 88.176 points, or 1.88%, to finish at 4,767.159. Finance and basic industry sectors led gains that included eight of the 9 major industry groups on Tuesday, with gains of 3.01% and 2.73%, respectively. Trailing the climb on Monday, shares in miscellaneous industry sector added 1.74%, while agriculture sector lagged with 0.07%-decline. The LQ45 index rose 20.200 points, or 2.59%, to 798.909. In economic news, Indonesia’s Investment Coordinating Board (“BKPM”) said the country’s investment growth slowed last quarter and foreign companies are expected to remain cautious this year. In the second quarter this year, total investment climbed 29.8% to IDR 99.8 trillion (USD 9.8 billion) from a year ago. Investment rose 30.2% to IDR 192.8 trillion in the first six months of 2013 from a year earlier. 182 shares rose and 79 shares declined Tuesday on the Indonesia Stock Exchange, where 3.3 billion shares worth IDR 4.92 trillion traded on the regular board. Foreign investors posted net purchase of IDR 316.96 billion.
• The Jakarta Composite Index (JCI) may post a moderate decline today, as weakness in the Rupiah remained the weighing factor for Indonesia’s market. Weak leads from global markets may also halt purchases of risk assets. We expect the JCI to pare gains today, with support and resistance at 4,672 and 4,815.

Sri Lanka

• The Market opened the week on an optimistic note assisting both indices to further accrue noteworthy gains and maintain its stay in green territory. The benchmark ASPI index closed positive for the 3rd consecutive trading day at 6,084.24 gaining 43.18 points or 0.71%, just 16 points below the 6,100 level; this was the highest value recorded after 03rd July. Following a similar trend, the S&P SL20 index too closed positive at 3,436.09, up by 26.93 points or 0.79%. As at the daily closure, the total market capitalization stood at LKR 2.34Tn, logging a year to date gain of 8.02%. The market PER & PBV stood at 16.24 & 2.17 respectively. The daily turnover amounted to LKR 408.44Mn, recording a dip of 43.20% against the previous trading day. Diversified Holdings (DIV) sector topped the list under the sectorial summary providing LKR 142.05Mn. Bank Finance & Insurance (BFI) too performed well providing LKR 109.73Mn.Moreover, the two sectors DIV and BFI collectively made a 62% contribution to the daily aggregate turnover. A total of 11.27Mn shares changed hands indicating a drop of 17.11% against the previous trading day. In terms of share price movement, 104 companies gained while 86 companies lost during the day. Foreign participants appeared to be bullish during the day resulting in a net foreign inflow of LKR 78.17Mn; this was resulted by foreign purchases worth LKR 160.45Mn and sales of LKR 82.28Mn; this assisted the year to date net foreign inflow to reach LKR 16.73Bn. With regard to the local FOREX market, the USD closed at LKR 133.18/- selling and LKR 129.98/- buying.

Australia

• The Australian share market on Tuesday, closed higher, helped by soaring gold and commodity prices. The All Ordinaries index closed above 5,000 points for the first time since May 23, and the S&P/ASX200 index finished above 5,000 for a second consecutive day. The benchmark S&P/ASX200 index was up 15.2 points, or 0.30 per cent, at 5,017.1 points.
• Today (24/07/13), the Australian market looks set to open flat following a mixed close on Wall Street and after a second consecutive day in which the S&P/ASX200 index closed above 5,000.
• In economic news on Wednesday, the Australian Bureau of Statistics is due to release the consumer price index (CPI) for the June quarter.
• In equities news, Australand Property Group is scheduled to post half year results, while AMCIL is expected to release full year results and Atlas Iron is to announce June quarter results. The NAB is hosting a National Small Business Summit Brisbane. Origin Energy managing director Grant King, Santos chief executive David Knox, EnergyAustralia MD Richard McIndoe, and BG Group Australia chairman Catherine Tanna are slated to participate in an AFR energy forum in Sydney. Meanwhile, Assistant Treasurer David Bradbury and opposition finance spokesman Mathias Cormann are due to debate tax issues at the Hilton Hotel in Sydney.

Hong Kong

• HSI gained 498 points or 2.33% to 21,915. CEI surged 365 points or 3.88% to 9,780. Trading volume rebounded to HKD66.4 billion.
• Chinese news reported that Premier Li Keqiang sees 7% GDP growth as a bottom line, which led the market expect some stimulus to the support the economic expansion. HSI broke recent narrow trading range and surged 2.33%.
• With expectation of lower RRR, mainland bank sector led CEI, ICBC (1398.HK), CCB (939.HK) and BANKCOMM (3328.HK) climbed 4.9%, 4.8% and 4.5% respectively. Resources stocks surged from bottom, China Coal (1898.HK), Zijin Mining (2899.HK) and Sinopec Corp (386) gained 6.4%, 7.9% and 4.3% respectively.
• Technically, HSI is now close to the upper Bollinger bands. We expect there will be a small correction, investors are suggested to wait and buy at a lower level. The next support and resistance will be at 21,458 and 22,000.