KLCI: -0.04% to 1807.6
JCI: -0.33% to 4658.9                                         SET: +1.38% to 1476.7
HSI: +0.31% to 21968                                        HSCEI: -0.03% to 9755.7
Nikkei: -2.97% to 14129                                     ASX200: +0.13% to 5042
Nifty: -0.36% to 5886.2                                       S&P500: +0.26% to 1690.3

 
MARKET OUTLOOK:
For our short term trading outlook and latest macro update, please see our webinar (http://www.uniphillip.com/ > Education Programs > Phillip Securities Research Webinar). We also feature Boustead in our webinar which has deep value waiting to be unlocked, and a clear identifiable catalyst.
 
For our longer term outlook please see the latest Global Macro Asset Strategy report below.

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


MACRO DATA:

USA: The National Association of Realtors (NAR) said its index for pending sales, reflecting sales contracts signed, slipped 0.4 percent to 110.9 in June from a downwardly revised 111.3 in May. The decline was much smaller than the average analyst estimate of a 1.7 percent drop following the May spike to the highest pace since December 2006.
 
Eurozone: Italy’s manufacturing-sentiment index increased to 91.7 in July, the highest since November 2011, from 90.5 in June. Economists had predicted a reading of 88.9. Finish consumer confidence fell to 5 this month from 8.1 in June.
 
In Japan, retail sales rose b 1.6% y-y in June, trailing the market expected 2.1% y-y gain, compared to 0.8% y-y gain in May. On y-y basis, retail sales fell 0.2% m-m, after the 1.5% m-m gain achieved in May. The nation's economy is picking up and BOJ Governor Haruhiko Kuroda indicated little concern that a planned sales-tax rise would derail the economic rebound as Prime Minister Shinzo Abe considers whether to proceed with the move.

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Regional Market Focus

Singapore

• The Straits Times Index (STI) ended +0.87 points higher or +0.03% higher to 3,236.97, taking the year-to-date performance to +2.21%.
• The top active stocks were SingTel (+0.51%), DBS (+0.18%), Kep Corp (-1.04%), GoldenAgr (unchanged) and THBEV (-3.67%).
• STI is currently trading in a support/resistance cluster upon yesterday’s retreat and is consolidating. A breakout above 3277 will resume the uptrend; a break below 3205 will imply further downside. Major clusters of support exist from 2930 to 3110.
• Although biased to the upside due encouraging macro-economic data, we remain cautious this week due to potential short term weakness and significant economic news. This Thursday, the FED will print its rate decision, and the US jobless claims will be announced.
• Top picks currently are Pan United (Buy, TP: S$1.21), SGX (Buy, TP: S$8.30) & Keppel Corp (Accumulate, TP: S$12.25). We believe that also that Boustead SP is severely undervalued (Buy, TP $1.935)

Thailand

• Thai stocks traded in the red throughout the session on Mon in line with negative sentiment amid fears of economic slowdown in China and domestic political worries but trading volume was razor-thin.
• The SET index is likely to remain in a subdued mode within a trading range of 1440-1470 points today as investors are still awaiting US FOMC policy meeting during the middle of the week to look for clues on the timing of a potential QE tapering and a possible interest rate cut/another potential round of stimulus from ECB. In Thailand, domestic political temperature looks set to heat up from this weekend onwards, a factor that could make investors hesitate to fully return to the market as evidenced by the notably thinning trading volume.  
• Foreign investors turned heavy net sellers of Thai equities to the tune of around Bt2.5bn on Mon. In our view, foreign sell-off could pile more pressure on market sentiment despite subdued trading volume. 
• Under this circumstance, selective trading strategy is advised with strong earnings/high dividend/low beta plays in focus. Equity exposure should be maintained at 50% of the short-term trading portfolio. Pare back equity holdings if the SET index breaks below 1440 points. Set a cut loss at 1400 points.
• Resistance for the SET index is seen at 1470-1490 and support at 1440-1420 today.

Indonesia

• Most Indonesian stocks tumbled Monday (29/07), amid mostly negative stock indexes in Asia ahead of a row of economic data this week, and as the Yen strengthened. The Jakarta Composite Index (JCI) fell 78.407 points, or 1.68%, at 4,580.467. The decline on Monday included all major industry sectors. Mining sector fared worst with 2.44%-drop, followed by consumer goods sector with 2.30%-decline, and miscellaneous industry sector with 2.08%-fall. Most blue-chip shares also declined on Monday. The LQ45 index that tracks the blue-chip stocks slid 14.866 points, or 1.91%, at 762.289. Decliners outran gainers 215 to 52 Monday on the Indonesia Stock Exchange, where volume on the regular board totaled at only 2.23 billion shares worth IDR 2.73 trillion. Foreign investors posted net sale of IDR 379.18 billion.
• Indonesian stocks will likely move in a mixed tone today, with weak closes on US markets overnight and positive starts in Asia today. We expect the Jakarta Composite Index (JCI) to move sideways, within the price band of between 4,528 and 4,675.

Sri Lanka

• The Colombo bourse demonstrated a mixed note during the day, resulting the indices to close on different spaces. The market witnessed a downward trend during early hours mainly due to the sluggish participation of the investors, nevertheless the trend reversed towards the final hour pushing the ASPI back into the green territory to reach an intraday peak of 6,062.23, however closed a few points lower at 6,056.92 (gaining a minute 05.15 points or 0.09%). The S&P SL20 closed negative losing 2.10 points or 0.06% to settle the day at 3,425.77.  As at the day’s close, the total market capitalization stood at LKR 2.33Tn, charting a year to date gain of 7.54%. The market PER & PBV stood at 16.03 and 2.15 respectively. The daily aggregated turnover amounted to LKR 451.30Mn, indicating an increase of 11.76% against the previous trading day. Under the sectorial summary, Beverage Food & Tobacco (BFT) sector stood out as the prime contributor providing LKR 156.20Mn, while accounting to 35% of the aggregated turnover for the day. Further, Diversified Holdings (DIV) sector added LKR 118.73Mn to the daily turnover. During the day, shares totaling up to 9.74Mn changed hands, logging a drop of 47.80% compared with the previous trading day. Price losers outstripped the price gainers by 118:57. Foreign participants were bullish during the day, to result in a net foreign inflow of LKR 53.92Mn (foreign buying amounted to LKR 264.34Mn & selling amounted to LKR 210.42Mn); this resulted in the year to date net foreign inflow to touch the LKR 17Bn mark for the 1st time during the year. With regard to the local FOREX, the USD closed at LKR 133.21/- selling LKR 130.01/- buying. 

Australia

• The Australian share market on Monday was pushed higher by shares in the four major banks. The benchmark S&P/ASX200 index gained 4.3 points, or 0.09 per cent, to 5046.3.
• Today (30/07/13), the Australian share market is set for a flat start after overseas markets lost ground as investors wait for major economic news coming out of the US later in the week.
• In local economic news, the Australian Bureau of Statistics will release building approvals data for June on Tuesday. Reserve Bank of Australia governor Glenn Stevens is scheduled to deliver a speech at a function in Sydney, and the Housing Industry Association publishes its trades report for June quarter.
• In company news, Woolworths will release its fourth quarter sales. Laboratory operator ALS holds its annual general meeting in Brisbane, Drillsearch Energy releases its quarterly report and education firm Navitas releases its full year financial results.

Hong Kong

• HSI and CEI dropped 118 points or 0.54% to 21,850 and 114 points or 1.17% to 9,641 respectively. Trading volume further decreased to HKD42.1 billion.
• Market concerns Central government to carry out audit and compliance measures on local debts and makes the debt’s non-performing risks emerge, SHCOMP and CSI300 lost 1.7% and 2.16% respectively, dragged HK market.
• Kunlun Energy (135.HK), the worst performed HSI constituent stock, lost 6.1% due to concern of raising natural gas price hurts its margins. Lifestyle Int’l (1212.HK) gained 5.9% after interim results released, net profit surged 20% yoy to HKD1.2 billion.
• Technically, HSI failed to close above 22,000 last week, which is the key resistance in short-term. Support will be at 21,734.

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Morning Note

Company Highlights

United Envirotech Ltd (UEL) and Memstar Technology Ltd (Memstar), jointly announced today that UEL has entered into a sale & purchase agreement to acquire a 100% stake in Memstar Pte. Ltd. (“MPL”), a wholly owned subsidiary of Memstar, and certain assets from Memstar, for a total consideration of S$293.4 million. UEL is a leading membrane-based water treatment solution provider. UEL’s principle activities involve the provision of water treatment solutions using its proprietary advanced membrane technologies, such as the Membrane Bioreactor (MBR) technology and the Continuous Membrane Filtration (CMF) technology. Memstar is one of the leading manufacturers and suppliers of poly-vinylidene fluoride (“PVDF”) hollow fiber membrane and membrane products, with a global presence. Listed on SGX Mainboard in 2007, Memstar is equipped with strong R&D capabilities and has manufacturing facilities in Singapore and China. It’s membrane products have been used extensively by UEL in its water and wastewater treatment projects. Memstar’s superior product quality is recognized by international customers from Asia, the Middle East, Europe and the United States.  (Closing Price S$1.025, -)

Pteris Global Limited (Pteris) announced yesterday that it will be acquiring a 70 per cent stake in Shenzhen CIMC-TianDa Airport Support Limited (TianDa), manufacturer and operator of airport equipment, owned by China International Marine Containers (CIMC).Formerly known as Inter-Roller Engineering Limited, Pteris said it entered into a conditional sale and purchase agreement to buy CIMC's stake for S$96.3 million by acquiring the entire issued and paid-up share capital of Techman (Hong Kong) Limited. It also said that the deal will constitute a reverse takeover in accordance with SGX rules. Pteris also said that it is in negotiations to finalise a sale and purchase agreement with Shenzhen TGM Limited, the management company of TianDa, to acquire its remaining 30 per cent stake in the company. CIMC is a wholly-owned subsidiary of China International Marine Containers Group Ltd. (Closing Price S$0.131, -2.24%)