KLCI: -0.09% to 1808.4
JCI: -0.93% to 4674.1                                         SET: -2.98% to 1456.7
HSI: -0.31% to 21900                                         HSCEI: -0.26% to 9752.6
Nikkei: -1.14% to 14562                                     ASX200: +0.01% to 5035.6
Nifty: -1.39% to 5907.5                                       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 Conference Board, an industry group, said its index of consumer attitudes slipped to 80.3 from an upwardly revised 82.1 in June. The report was shy of economists' expectations for the index to hold steady at June's original reading of 81.4. The expectations index dropped to 84.7 from 91.1. Still, consumers were not so gloomy about their current standings, with the present situation index rising to 73.6 from 68.7, the highest level since May 2008.
 
Eurozone Commission Consumer Confidence Indicator fell 17.4% from June; this was in line with analyst expectations. Spanish harmonized CPI increased 1.9% yoy compared to 2.2% in June, in line with analysts’ expectation. Spain’s recession eased in the 2nd quarter, pushing unemployment down from its highest level in the country’s democratic history. Spain’s GDP fell 0.1% from the 1st quarter, when it declined 0.1%. The advanced inflation figures in the German economy surpassed expectations for the month of July, rising 0.5% on a monthly basis and 1.9% over the last twelve month vs. 0.3% and 1.8%, respectively. The Harmonized CPI rose 0.4% inter-month and 1.9% on a yearly basis.
 
In Japan, industrial output fell by 3.3% m-m, or 4.8% y-y, in June, marking the biggest drop since March. Jobless rate reported 3.9%, the lowest since 2008. The results add to challenges for Prime Minister Shinzo Abe, who must decide whether to proceed with a consumption-tax increase that threatens to arrest a rebound in the Japanese Economy.
 
INDIA: The Reserve Bank of India kept the benchmark repurchase rate and cash reserve ratio unchanged at 7.25% and 4.00% respectively, in line with analyst expectations.

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Regional Market Focus

Singapore

• The Straits Times Index (STI) ended +8.48 points higher or +0.26% higher to 3,245.45, taking the year-to-date performance to +2.47%.
• The top active stocks were SingTel (+0.51%), Kep Corp (-0.67%), DBS (-0.24%), OCBC Bk (+0.95%) and UOB (+0.19%).
• The outperforming sectors today were represented by the FTSE ST Consumer Goods which gained +1.18%.The two biggest stocks of the Consumer Goods Index are Wilmar International (+1.27%) and Thai Beverage (+2.86%). The underperforming sector, FTSE ST Utilities declined -2.81% with United Envirotech declining -6.83% and Hyflux declining -0.76%.The FTSE ST Health Care Index gained +0.34% and the FTSE ST Industrials Index declined -0.20%.
• STI is currently trading in a support/resistance and 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.
• We are positive on Banks (DBS and UOB), SGX, Telcos (Singtel and M1), SATS, Pan United and Boustead.

Thailand

• Thai stocks tumbled as much as 18.84 points in late trading on Thu amid Fed concerns and domestic political worries after the SET index stayed in the green throughout the morning session.
• The SET index is expected to trade in a sideways range of around 1440+/- ahead of developments in US QE tapering plan on the last day of the Federal Reserve’s two-day policy meeting today and on concerns that domestic political temperature will heat up this weekend, making many investors reluctant to take big positions and causing trading volume to markedly dry up.
• Even though foreign investors stayed on the selling side in the Thai stock market, the selling amount was small and foreigners continued to hold net long positions in bond and derivatives markets. The Thai baht this morning weakened sharply to 31.3 to the US dollar while the greenback regained strength ahead of today’s statement from the Federal Reserve which is expected at the end of the FOMC’s two-day policy meeting.
• We expect a trading range of 1420-1450 points for the SET index today.
• Today we peg resistance for the SET index at 1450-1460 and support at 1420-1400.

Indonesia

• The Jakarta Composite Index (JCI) posted moderate gain on Tuesday (30/07), amidst broad climbs in Asia after a weakened Yen, and signal that Australia may further cut its interest rate. The JCI advanced 28.022 points, or 0.61%, to finish at 4,608.489. Shares in infrastructure sector led gains that included 4 of the nine major industry groups, as index of the sector rose 1.84%. Miscellaneous industry and consumer goods sector followed with gains of 1.65% and 1.38%, respectively. LQ45, the index that measures Indonesia’s blue-chip stocks, rose 9.956 points, or 1.31%, to 772.245. In corporate news, Aneka Tambang (ANTM), reported its ferronickel production increased 27% in the first half of this year, to 10,166 tons, or about 56% of the company’s ferronickel output target for this year. The miner also reported 0.6% increase in gold production. 107 shares advanced, and 153 shares declined Tuesday on the Indonesia Stock Exchange, where 2.5 billion shares worth IDR 3.1 trillion (USD 301.74 million) changed hands on the regular board. Foreign investors posted net purchase of IDR 2.08 trillion (USD 202.84 million).
• The Jakarta Composite Index (JCI) will likely to decline today, following mild gains on Wall Street overnight and negative start in Asia this morning, as investors took cautious stance ahead of the US Federal Open Meeting Committee announcement later in the day. We expect the JCI to decline, later in the day. We expect the JCI to decline, with minor support and resistance at 4,576 and 4,654, respectively.

Sri Lanka

• The market witnessed a minute drop during the day while resulting in the indices to close on either side. The benchmark ASPI index fell to 6,055.48, losing a tiny 1.44 points or 0.02%. However, the S&P SL20 managed to breathe within the green terrain yet again, closing at 3,432.03, gaining 6.26 points or 0.18%.Further, with regard to the movement in share prices, a total of 110 companies lost while only 65 gained. The daily turnover of LKR 700.86Mn indicated a rise of 55.30% against the previous trading day. Under the sectorial round up, Diversified Holdings (DIV) dominated the rest providing LKR 475.75Mn, while accounting a share of 68% of the daily aggregated turnover. Bank Finance & Insurance (BFI) sector too provided a notable LKR 143.30Mn; further, BFI managed to capture the highest investor interest during the day noting 1,248 trades resulted in a total quantity of 4.72Mn shares changing hands. Moreover, nearly 90% of the daily turnover was accounted by the two sectors DIV and BFI. The volume for the day stood at 13.17Mn, indicating a gain of 35.16% against the previous trading day. Foreign investors ended their 5 day bullish run to result in a net foreign outflow of LKR 242Mn, whilst dragging the year to date net foreign inflow (LKR 16.76Bn) below the LKR 17Bn level. Looking at the local FOREX markets, the USD closed the day at LKR 133.20/- selling and LKR 130/- buying.

Australia

• The Australian share market was boosted on Tuesday by hints the Reserve Bank of Australia will cut the cash rate next week. The benchmark S&P/ASX200 index added 0.9 points to 5,047.2.
• Today (31/07/13), the Australian share market is set to open slightly higher despite a quiet night on Wall Street as investors wait for the outcome of a US Federal Reserve policy meeting.
• There's no local economic news expected on Wednesday. 
• In company news, Origin Energy and Paladin Energy will release quarterly activity reports.

Hong Kong

• HSI gained 103 points or 0.48% to 21,953. CEI closed at 9,669, up 28 points or 0.3%. Trading volume is only HKD44.6 billion
• PBOC conducted reverse repurchase operation for the first time in five months, which increased liquidity and alleviate cash squeeze concern. Minsheng Bank (1988.HK), ICBC (1398.HK) and CCB (939.HK) gained 2.3%, 0.59% and 0.6% respectively.
• Fortune REIT (778.HK) announced acquisition of Kingswood Ginza Property with consideration of HKD5,849 million. Fortune REIT issued 142,962,000 new units at HKD6.82 per unit for part of the purchase.
• Technically, HSI failed to close above 22,000 again, which is the key resistance. Next resistance and support will be at 22,200 and 21,705 respectively.

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Morning Note

Company Highlights

Rotary Engineering Limited, a leading integrated engineering, procurement, construction (EPC) and maintenance services provider in the oil and gas and petrochemical industry, announced that it has been awarded S$200 million worth of EPC contracts in Singapore and Saudi Arabia. One of the contract wins is an EPC contract by a joint venture between three multinational oil companies to build a shared lubricant storage facility in Tuas South, Singapore. The EPC contract will cover the construction of about 80 tanks, common pipelines, import/export jetty topsides and the infrastructure supporting the operations of the project. The shared lubricant storage facility is the first of its kind in the lubricants industry and will serve its three oil majors’ Lube Oil Blending Plants (LOBPs) and Grease Manufacturing Plants (GMPs), which are located adjacent to the storage facility. In Saudi Arabia, three contracts were awarded by international EPC players for projects in Jubail Industrial City (Jubail). The first contract is for the EPC of 14 tanks for an elastomers plant that produces high specification synthetic rubber of various types. The second is a contract is for the erection of 28 tanks at the Sadara South Tank Farm, which is also part of the Jubail petrochemical complex. A third contract is for fabrication works at a multi-feed petrochemical cracker in one of the world’s largest petrochemical complexes being built at Jubail. (Closing Price S$0.620, +2.5%)

Global Logistic Properties Limited, the largest provider of modern logistics facilities in China, Japan and Brazil, has leased 23,000 square metres (248,000 square feet) to one of China’s largest express delivery companies at GLP Park Zengcheng and GLP Park Yunpu in Guangzhou, Southern China. With these agreements, the customer is more than doubling its leased area with GLP and now uses GLP facilities in two major cities in China – Guangzhou and Beijing. As a major economic and logistics center in Southern China, Guangzhou is a key market for express and third-party logistics companies. The customer is leasing 18,000 sqm (194,000 sq ft) at GLP Park Zengcheng and 5,000 sqm (54,000 sq ft) at GLP Park Yunpu, two large-scale, modern logistics parks in strategic locations. The customer will use the new facilities to meet increasing demand - particularly from the e-commerce industry - for express services in Guangzhou and throughout China. (Closing Price S$2.870, -1.0%)