KLCI: +0.26% to 1782.5
JCI: +0.36% to 4640.8                                        SET: -1.15% to 1420.9
HSI: +0.46% to 22190                                        HSCEI: +0.11% to 9734.8
Nikkei: +3.29% to 14466                                    ASX200: +1.09% to 5116.8
Nifty: -0.87% to 5677.9                                       S&P500: +0.16% to 1709.7


Market Outlook
Please register and join today’s webinar at 11.15am (by clicking the link at the start of this report, or go to www.poems.com.sg > Weekly Webinar Market Call by Phillip Research).

We also feature Ezion (Accumulate) in our webinar, take profit on Garmin, as well as continue to be bullish on Genworth.

For our longer term outlook on markets, please see our 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 number of jobs outside the farming sector increased by 162,000, but this was below the median forecast of 184,000. At the same time, the jobless rate fell two tenths of a point to 7.4 percent, its lowest in over four years. Gains in employment fueled some of that decline, but the labor force also shrank during the month, robbing some of the luster from the decline in the unemployment rate.
U.S. personal income rose less-than-expected last month to a seasonally adjusted 0.3%, from 0.4% in the preceding month whose figure was revised down from 0.5%. Analysts had expected U.S. Personal Income to rise 0.4% last month
Personal spending, which measures how much Americans spend on items from gasoline to refrigerators, rose 0.5% in June from a month earlier. The spending boost was more than double the increase in May and the biggest since February.
New orders for U.S. factory goods rose for the third straight month in June, the latest indication that a recent slowdown in manufacturing activity had probably run its course. The Commerce Department on Friday said new orders for manufactured goods increased 1.5 percent. May's orders were revised to show a 3.0 percent rise instead of the previously reported 2.1 percent advance. Economists polled by Reuters had forecast new orders received by factories increasing 2.3 percent.
 
Eurozone: Spain’s unemployment rate was 26.3 percent, down from an all-time high of 27.2 in the first quarter of 2013. That decrease was the first drop in two years. The unemployment rate for those 25 and under currently hovers around 55 percent, double that of the overall population. Spain's unemployment rate will remain above 25 percent until 2018 unless there are significant changes to its hiring laws, according to an International Monetary Fund report.
 
ASEAN: Indonesia’s economy grew less than 6 per cent last quarter, adding to risks for the Southeast Asian nation as investments ease, inflation accelerates and the currency slumps. Gross domestic product increased 5.81 per cent in the three months ended June 30 from a year earlier. That compares with a 6.02 per cent pace reported previously for the first quarter and the median estimate of 5.9 per cent.

China: In China, official non-manufacturing PMI rose to 54.1 in July, from 53.9 in June, indicating the nation's economic slowdown is stabilizing. The official manufacturing PMI, published on 1 Aug, unexpectedly rose to 50.3 in July, from 50.1 in June, indicating a mild expansion in the nation's manufacturing sector. Despite the pickups in PMI readings, we still caution that China's economic growth may miss the government established 7.5% growth target.
 

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Regional Market Focus

Singapore
The benchmark STI closed higher at 3,254.13 (+0.33%). The 2.1bn shares traded were worth S$1.3bn in value.
Market activities remain weaker relative to the first half of the year, but are expected to increase with greater economic clarity.

All three SG banks have reported strong performance in 1H13. 2H13 may however see some slow down in loans growth and Fees and commission growth. Credit cost may also start to rise from a low base.

We expect the STI to consolidate at current levels, with key near term support at 3,200 levels.

Top picks for the year are Pan United (Buy, TP: S$1.21), SGX (Accumulate, TP: S$8.00) & Keppel Cord (Accumulate, TP: S$12.34).

Thailand
Thai stocks lost as much as 16.57 points last Fri on domestic political worries after a planned protest against the controversial amnesty bill but late trading buying helped pare some of earlier losses.

This week internal factors are likely to set the tone for the Thai stock market as the market may dance to second-quarter earnings tune and domestic political developments.

Investors lacked conviction on the direction of the Thai stock market for the meantime as reflected by razor-thin trading volume and renewed foreign sell-off in Thai equities amid fund inflows into other regional markets.

On the external front, all eyes will be on China’s HSBC services PMI data due out this morning. The forecast miss may likely dampen sentiment in regional bourses.

Overall we expect the SET index to trade in a tight range amid caution ahead of the above key events. For investment strategy, we continue to advise investors to maintain equity exposure at 50% of the portfolio with focus on low beta, strong earnings and high dividend yield plays. Set a cut loss at 1400.

Today we peg resistance for the SET index at 1440-1460 and support at 1420-1400. 
 
Sri Lanka
The Colombo bourse exhibited a minute drop today and indices concluded the day on a mixed note. The benchmark ASPI Index closed the day at 6,155.82 losing tiny 0.78 points or 0.01%. However, the S&P SL20 Index closed on the positive side for the 2nd consecutive trading day at 3,490.57 gaining 13 points or 0.37%. The turnover for the day accumulated to record LKR 399.44Mn indicating a drop of 74.21% against the previous trading day. Under the sectorial round-up, Diversified Holdings (DIV) and Bank Finance & Insurance (BFI) sectors stood out to be the top contributors for the day with subscriptions worth LKR 126.51Mn and LKR 125.17Mn respectively. Further, the two sectors collectively made a significant 63% contribution to the day’s aggregate turnover value.  During the day, a total of 43.61Mn shares changed hands resulting in a decrease of 42.95% against the previous trading day. Price losers were ahead of the gainers, while the loser to gainer ratio was being recorded as 97:80. Foreign participants appeared to be bullish during the day ending their 3 day bearish run, to result in a net foreign inflow of LKR 120.62Mn; this was resulted by foreign buying worth LKR 243.52Mn and selling worth LKR 122.90Mn. As at the week’s closure the year to date net foreign inflow stands at LKR 15.98Bn.

Australia
The Australian share market on Friday hit its highest point in more than two months as good signs from the United States overshadowed weaker local economic forecasts from the federal government. The S&P/ASX200 index posted its tenth consecutive day of gains, taking it above 5,100 points for the first time since May 22. The benchmark S&P/ASX200 index was up 55.3 points or 1.09 per cent to 5,116.8 points.

Today (05/08/13), the Australian market looks set to open higher after US markets closed at record highs in their previous trading session.  The SFE 200 Futures are pointing upwards 9 points or 0.17 per cent to 5,077.

In economic news on Monday, Australian Bureau of Statistics (ABS) releases June's retail trade figures, the Australian Industry Group/Commonwealth Bank is scheduled to release the Australian Performance of Services Index (PSI) for July, while Dun and Bradstreet puts out its business expectations survey. Meanwhile, the TD Securities/Melbourne Institute inflation gauge for July also is due out.

No major equities news is expected

Hong Kong
HSI closed at 22,190 last Friday, up 102 points or 0.46%. CEI gained 10 points or 0.11% to 9,734. The trading volume was HKD49 billion, still below HKD50 billin.

HSI gained 222 points or 1% for last week, which was the 6th week gain. Among the HSI constituent stock, China Resources Land (1109.HK) performed the best with 6.9% gain. However, lack of the trading volume support, we concern about the sustainability of the up trend.

Market expects easing of policy risks on mainland property sector, China Overseas (688.HK), Poly Property (119.HK) and Yuexiu Property (123.HK) surged 4.2%, 5.1% and 4.5% respectively last Friday. Rumor that China is studying to relax one-child policy led the baby’s product stocks gain, Goodbaby Intl (1086.HK), Prince Frog (1259.HK) and Biostime (1112.HK) gained 8.5%, 8.2% and 2.3% respectively.

Technically, HSI climbed above 200-MA. The next resistance and support will be at 22,500 and 22,000 respectively.
 

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Morning Note

Company Highlights

Tritech Group Ltd announced it has received approval in-principle (the “AIP”) from the Singapore Exchange Securities Trading Limited on the proposed restructuring (“Proposed Restructuring”) and proposed spin-off (“Proposed Spin-off”) of the Relevant Subsidiaries in the Limestone Business. (Closing Price S$0.260, -1.9%)

SMRT Corporation Ltd wishes to announce that its wholly-owned subsidiary, SMRT International Pte. Ltd. (“SMRTI”) has entered into an agreement to subscribe for 40,000 ordinary shares comprising 40% of the total enlarged issued share capital of Ortus Infrastructure Capital Pte. Ltd. (“OICPL”) at an issue price of S$1.00 per ordinary share (the “Subscription”). The consideration for the Subscription was arrived at by taking into account the strategic value of the investment and will be paid in cash on completion. (Closing Price S$1.405, -)