KLCI: -1.25% to 1772.6
JCI: +0.04% to 4610.4                                        SET: -0.86% to 1423.1
HSI: -0.32% to 21883.7                                      HSCEI: -0.11% to 9658.5
Nikkei: -1.45% to 13668.3                                  ASX200: +0.09% to 5051.9
Nifty: -0.23% to 5742                                          S&P500: -0.01% to 1685.7

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:

U.S. 2q13 GDP data blew past expectations and grew by an annualized rate of 1.7 percent in the second quarter of 2013. Analysts expected a rate of 1.0 percent. The Commerce Department says the rise stems from business investments, particularly in buildings, and an upturn in exports and the civilian aircraft industry. Real disposable personal income — personal income adjusted for taxes and inflation — rose 3.4 percent in the second quarter after falling 8.2 percent in the first quarter. Purchases of goods and services by U.S. residents rose by 2.4 percent in the second quarter, from 1.4 percent growth in the first.

The Mortgage Bankers Association has informed that US citizens that applied for mortgage loans contracted 3.7% in the week ended on July 26, lower than the previous fall of 1.2%.
 
Euro-area inflation held steady in July after accelerating for two months. The annual inflation rate was 1.6 percent, the same in June and in line with expectation. It’s the sixth straight month that the rate has been less than the ECB’s 2 percent ceiling. Euro-area unemployment remained unchanged at 12.1 percent as last month. The German unemployment rate rose to 6.8% in July from 6.6% in June, new figures show today. The Federal Labour Agency said the rise in jobless numbers by 49,000 was due to seasonal influences including the start of the summer holiday period. However, unemployment in Europe's biggest economy is far lower than in many of the other European Union countries that use the euro. Spain and Greece for example have unemployment rates of over 25%.
 
In Japan, Markit/JMMA manufacturing PMI fell to 50.7 in July, compared to the 52.3 reading in June, indicating a lower expansion in the nation's manufacturing sector. Housing starts rose by 15.3% y-y in June, compared to the 14.5% y-y gain in May, reflecting the willingness in investment under a weak yen environment.
 
In Taiwan, preliminary GDP grew by 2.27% in 2Q13, beating the market expected 2.10% growth, and compared to the 1.67% y-y growth in 1Q13. We remained cautiously neutral in Taiwan's economic outlook ahead, as China, Taiwan's biggest trading partner, is undergoing a slowdown in Economic growth due to structural reform.

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Regional Market Focus

Singapore

• The Straits Times Index (STI) ended -23.52 points lower or -0.72% lower to 3,221.93, taking the year-to-date performance to +1.73%.
• The outperforming sectors today were represented by the FTSE ST Technology which gained +0.03%.The two biggest stocks of the Technology Index are LionGold Corp (+0.43%) and Stats ChipPAC (unchanged). The underperforming sector, FTSE ST Consumer Goods Index declined -1.25% with Wilmar International declining -0.94% and Thai Beverage remaining unchanged. The FTSE ST Health Care Index declined -0.30% and the FTSE ST Industrials Index declined -0.96%.   
• 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 fell sharply on Wed amid Fed worries and domestic political concerns after the government imposed Internal Security Act (ISA) in Bangkok to control a planned protest after the parliament reopens on Thu but bargain buying in late trading pared some earlier losses before the SET index finished the session at 1,423.14 points.
• Risk sentiment seems slightly tilted to the positive side after the Federal Reserve said in a statement following its two-day policy meeting that the US economy continues to recover but still needs support and the US central bank gave no hint that a reduction in the pace of its bond-buying program is imminent. US economic data also came out stronger than expected as GDP grew at an annualized rate of 1.7% in the second quarter, beating the forecast for growth at a 1% pace and exceeding a 1.1% growth in the first quarter. Key economic data on tap this morning is China’s manufacturing PMI.
• In Thailand, domestic political worries remain a cause for concern as a planned rally against the amnesty bill, which is slated for Lower House debate on Aug 7, this weekend until next week has prompted the government to invoke the ISA in three Bangkok districts. Political jitters may put a lid on the rebound and we rule out a breakout above a 1440. Today we expect a trading range of 1400-1440 points for the SET index.
• Resistance for the SET index is seen at 1440-1460 and support at 1420-1400 today.

Indonesia

• The Jakarta Composite Index (JCI) edged up on Wednesday (31/07), as stock markets in Asia moved in a mixed bag, ahead of the US Federal Reserve FOMC meeting announcement slated later on the day. The benchmark index of Indonesian stocks added 1.888 points, or 0.04%, to 4,610.377. The gain on Wednesday was bolstered by advances in 4 of the nine main sectors, led by finance sector that climbed 1.18%, followed by miscellaneous industry sector with 0.63%-gain, and trade, investment and services sector with 0.22%-rise. But blue-chip stocks dragged on Indonesian market on Wednesday, with the LQ45 index declined 0.343 points, or 0.04%, to 771.902. In corporate earnings, mobile phone distributor Erajaya Swasembada (ERAA) reported net profit that fell to IDR 129 billion, or USD 12.56 million in the first-half. Earnings report for the same period from tobacco manufacturer Gudang Garam (GGRM) rose 4.8% to IDR 2.2 trillion. 103 shares rose, and 161 shares fell Wednesday on the Indonesia Stock Exchange, where 2.93 billion shares worth IDR 3.89 trillion changed hands on the regular market. Foreign investors accumulated net sale of IDR 87.99 billion.
• Indonesian stocks may post a moderate climb today, as markets in Asia edged up today after the US Federal Reserve said it will keep the bond purchase rate at USD 85 billion a month, with modest outlook for the economy. We expect the JCI to moderately advance, with support and resistance at 4,530 and 4,676, respectively.

Sri Lanka

• The bourse concluded within the negative terrain triggering the benchmark index to drown further; mainly due to the inactive buying sentiment of the investors observed on most parts of the trading day.  As at the closure, the ASPI stood at 6,037.22 losing 18.26 points or 0.30%. The S&P SL20 index dropped by a minute 3.07 points or 0.09% to close at 3,428.96. As at the daily closure, the total market capitalization amounted to LKR 2.32Tn while reducing the year to date gain to 7.19%. The turnover for the day was LKR 907.08Mn, noting a gain of 29.42% against the previous trading day. Under the sectorial round-up, Diversified Holdings (DIV) sector dominated the list providing LKR 630.82Mn while making account to nearly 70% of the turnover and Bank Finance & Insurance (BFI) made a contribution of LKR 185.48Mn.  During the day, a total of 14.56Mn shares changed hands, indicating an increase of 10.56% from its previously recorded. Foreign participants appeared to be bearish during the day for the second consecutive day, recording a net foreign outflow of LKR 461.30Mn resulted by foreign selling of LKR 608.54Mn and foreign buying of LKR 147.24Mn; further, this resulted in the year to date net foreign inflow to drop to LKR 16.30Bn, deviating further from the LKR 17Bn mark. With regard to the local FOREX, the USD closed at LKR 133.15/- selling and LKR 129.95/- buying.

Australia

• The Australian share market on Wednesday closed higher as investors reacted to positive news out of China and uncertainty in the United States. The benchmark S&P/ASX200 index was up 4.8 points, or 0.1 per cent, at 5,052.0 points.
• Today (01/08/13), the Australian market looks set to open flat following a mixed result on Wall Street after data showed second-quarter US gross domestic product grew better than had been expected. US GDP grew 1.7 per cent in the quarter, above the 1.1 per cent pace expected by analysts. Meanwhile, the Federal Reserve's Federal Open Market Committee (FOMC) concluded a two-day meeting saying economic growth was at a "modest" pace and pledging to maintain its aggressive bond-buying program.
• In economic news on Thursday, the Australian Bureau of Statistics is due to release the International trade price indexes for June quarter, while the Reserve Bank of Australia's index of commodity prices for month just ended is due out. HIA New home sales figures for June are expected, as is the RP Data Rismark Home Value Index for June. The Australian Industry Group releases its performance of manufacturing (PMI) index for July and the NAB releases its online retail sales index for June.
• In equities news, NAB chief executive Cameron Clyne is scheduled to speak at an Australia Israel Chamber of Commerce business lunch in Sydney while Deloitte launches its 2013 edition of Queensland Index (a review of Queensland ASX-listed companies. Meanwhile, Transurban is slated to post full year results.

Hong Kong

• HSI and CEI lost 70 points or 0.32% to 21,883 and 11 points or 0.11% to 9,658 respectively. The trading volume was HKD48.76 billion.
• For July, HSI gained 1,080 points or 5%, CEI had the best performing month in this year, up 347 points or 3%. Among the HSI constituent stocks, Tencent (700.HK) performed the best with 15.6% gain and Kunlun Energy (135.HK) performed worst with 17% loss.
• Chinese property developers’ stocks rose on policy easing hope. China Res Land (1109.HK), Sunac (1918.HK) and Greentown China (3900.HK) gained 3.4%, 5.7% and 5.3% respectively.
• Technically, 22,000, close to 100-MA, showed a strong resistance to HSI. The support will be at 21,757.

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Morning Note

Company Highlights

Hiap Hoe Limited and Ley Choon Group Holdings Limited are pleased to announce that Hiap Hoe, through its wholly-owned investment arm, Hiap Hoe Investment Pte. Ltd., has acquired a 14.9% interest in Ley Choon through a placement of 88,268,000 shares at a placement price of S$0.1642 per share. The placement price represents a 10.0% discount from the full market trading day’s weighted average price of S$0.1824 per share on 30 July 2013. Mr Teo Ho Beng, Hiap Hoe’s Executive Chairman and Chief Executive Officer said, “We are pleased with our investment in Ley Choon as it is central to our strategy of growing our investment activities, enlarging and diversifying our revenue streams over the next few years. More importantly, the complementary businesses of Hiap Hoe and Ley Choon present an excellent opportunity for both companies to realise operational synergies and cost efficiencies, which will create value for investors over the longer term. We are indeed proud to be part of a market leader with over 20 years of experience and success.” (Closing Price S$0.730, -1.35%)

Ley Choon Group Holdings Limited is pleased to announce that the Land Transport Authority has awarded the following contracts worth approximately S$63.9 million in total to the Company’s subsidiary, Ley Choon Constructions and Engineering Pte Ltd: (a) a contract worth approximately S$24.9 million in relation to the planned maintenance of roads, road related facilities and road structures in central sector; and (b) a contract worth approximately S$39.0 million in relation to the planned maintenance of expressways, road related facilities and road structures. (Closing Price S$0.440, -)

Civmec Limited subsidiary, Civmec Construction & Engineering Pty Ltd, an Australian based integrated multi-disciplinary heavy engineering service provider, is pleased to announce it has recently been awarded a number of new contracts. The value of the combined contracts is in excess of SGD$100 million and comprises the following: Yandicoogina sustaining project for Rio Tinto. The contract is a civil concrete works package and site works are expected to commence in August 2013 and will continue into the next financial year. The scope of the contract is for detailed earth works and concrete works and is designed to sustain production capacity at the Yandicoogina iron ore mine. Mungari gold project for La Mancha Resources. Sedgman Ltd, on behalf of the client, awarded Civmec several contracts for work on the Mungari gold project located in Kalgoorlie. The work relates to the construction of a new processing plant. The scope of the contract includes detailed earth works and concrete works, and onsite tank and bin fabrication. Works have recently commenced and the current scope is expected to be completed in October 2013. OneSteel Metalcentre distribution facility upgrade for Arrium Ltd. The scope of work includes a civil works and building contract for a complete facility upgrade in preparation for the installation of their new automated handling equipment. Scope growth to several existing contracts, including existing LNG projects. (Closing Price S$0.765, -0.65%)