KLCI: +0.29% to 1777.9
JCI: +0.30% to 4624.3                                       SET: +1.01% to 1437.5
HSI: +0.94% to 22088.8                                     HSCEI: +0.68% to 9723.9
Nikkei: +2.47% to 14005.8                                 ASX200: +0.19% to 5061.5
Nifty: -0.25% to 5727.9                                       S&P500: +1.25% to 1706.9


MARKET OUTLOOK:
In this week’s webinar, apart from giving the market outlook, we give an update on earnings, and call a Trading Buy on Iconix Brand Group – a US stock with growth potential and strong cash flows.

The webinar can be viewed from our archive at www.uniphillip.com > Education Programs > Phillip Securities Research Webinar

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

India’s index of industrial production fell 2.2% from a year earlier, dragged by an equal decline in manufacturing output. This disappointed expectations of only a 1.0% contraction.

Singapore lowered its forecast for exports this year due to a slowing China expansion. GDP rose an annualized 15.5 percent in the three months through June from the previous quarter, when it grew a revised 1.7 percent.

Japan: GDP rose an annualized 2.6 percent from the three months through March, when it climbed 3.8 percent, below expectations of a 3.6 percent gain.
 
Eurozone: Portugal’s CPI climbed 0.8 percent from a year earlier, less than the 1.2 percent increase in June, in line with expectations.

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Regional Market Focus

Singapore

• The benchmark STI closed higher at 3,232.24 (+0.07%). The 2.4bn shares traded were worth S$1.3bn in value.
• 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 (Buy, TP: S$8.30) & Keppel Corp (Accumulate, TP: S$12.25).

Thailand

• Thai stocks fell last Fri despite easing concerns over controversial amnesty bill but political tension was however expected to re-escalate during the third reading of the bill. Foreign sell-off also continued to weigh on sentiment.
• Investors are likely to be looking for new trading cues after domestic political tensions eased at least in the near term. Key economic data out of major economies still bears close watching. In our view, the Thai stock market is expected to play catch-up with its regional peers, which traded in the green on Mon when the Thai bourse was closed for HM the Queen’s Birthday.
• Interim dividend announcements, which will follow the final stretch of corporate earnings season, should continue to provide periodic boosts to market sentiment.
• Increased foreign sell-offs in both equities and derivatives markets would put a cap on potential market upside. Today we expect a trading range of 1420-1450 points for the SET index.
• The strategy is to be selective in stocks. Equity exposure should be maintained at 50% of the portfolio.
• Resistance for the SET index is pegged at 1440-1460 and support at 1420-1410 today.

Indonesia

• Most Indonesian stocks declined Monday (12/08), as investors returned from one week Eid al-Fitr holiday, and amidst mixed closes in Asia. The Jakarta Composite Index (JCI) fell 43.001 points, or 0.93%, to end at 4,597.780. Seven out of the nine major industry groups ended in red, with miscellaneous industry sector lost 3.06%, consumer goods slipped 2.71%, and finance sector trimmed 1.41%. Most blue-chip shares also fell on Monday, with the LQ45 index that measures them lost 10.996 points, or 1.42%, at 763.948. From the economic front, data released by Bank Indonesia showed retail sales in Indonesia climbed 14.8% in June from a year earlier, as consumption usually increases ahead of the Ramadan holiday period. But retailers expect retail sales to ease in the next 3 months after the Muslim festive. 125 stocks rose, and 117 stocks fell Monday on the Indonesia Stock Exchange, where 2.6 billion shares worth IDR 4.3 trillion changed hands on the regular board. Foreign investors posted net sale of IDR 278.23 billion.
• The Jakarta Composite Index (JCI) will likely to move sideways today, with negative bias, amid lack of catalysts in global and domestic markets. Also weighing on sentiments, the possibility of Bank Indonesia raising its benchmark rate will also put pressure on Indonesia’s market. We expect the JCI to move sideways, within price band of between 4,552 and 4,657.

Sri Lanka

• The trading week commenced with an adverse sentiment and the bourse witnessed yet another inactive trading session directing the indices to re-enter in to the negative terrain. The market observed a downturn from the first hours itself, triggering the ASPI to fall to an intraday low of 6,120.05 (losing 32 points), however, the late market rally observed post to mid-day supported the index to minimize loses and to settle the day at 6,130.24 (down by 21.68 points or 0.35%). Following a similar pattern the S&P SL20 also closed within the negative territory at 3,451.45, losing 18.71 points or 0.54%. The total market capitalization stood at LKR 2.36Tn, reducing the year to date gain to 8.84%. The market PER and PBV were 16.22x and 2.18x respectively. The turnover for the day was recorded as LKR 372.81Mn, indicating a gain of 30.62% against the previous trading day. Under the sectorial round-up, Bank Finance & Insurance (BFI) sector topped the list providing LKR 107.64Mn, whilst accounting to nearly 30% of the day’s total turnover. Diversified Holdings (DIV) sector provided LKR 82.71Mn and stood next in line under the top subscriber list for the day. Additionally, the two sectors BFI and DIV collectively made account to almost half of the aggregated turnover for the day. During the day, a total of 18.96Mn shares changed hands resulting in an increase of 67.52% against the previous trading day. In terms of share price movement, 116 companies lost while 72 companies gained within the trading day. Foreign participants were bullish during the day for the 4th consecutive, resulting in a net foreign inflow of LKR 68.67Mn resulted by foreign buying of LKR 158.86Mn and selling of LKR 90.19Mn; this assisted the year to date net foreign inflow to reach LKR 16.41Bn. As at the day’s closure, the USD stood at LKR 133.20/- selling and LKR 130.00/- buying.

Australia

• The Australian share market on Monday rose by more than one per cent as renewed optimism about China's economy prompted investors to pile into resources stocks. The benchmark S&P/ASX200 index was up 53.5 points, or 1.06 per cent, at 5,108.7 points.
• Today (13/08/13), the Australian market looks set to open higher after a mixed result on Wall Street and European markets amid heightening concerns of yet another Greek bailout.
• In economic news on Tuesday, the Treasury and the Finance departments are expected to release the pre-election Economic and Fiscal Outlook (PEFO), while the National Australia Bank's monthly business survey for July is also due out.
• In equities news, Stockland, Bradken and Domino's Pizza are expected to post full year results.

Hong Kong

• HSI and CEI dropped 298 points or 1.34% to 21,923 and 75 points or 0.78% to 9,650 respectively. Trading volume rebounded little bit to HKD49.015 billion.
• HSI gained 463 points or 2.13% to 22,271. CEI surged 328 points or 3.42% to 9,928. Trading volume rebounded to HKD64.746 billion
• Due to optimism China economy is stabilizing after 2-quarter slowdown, Shanghai Composite Index gained 2.4% to 2,101 and led HK market up. Resources stocks showed bottom out trend. Yanzhou Coal (1171.HK), Jiangxi Copper (358.HK), CNBM (3323.HK) surged 9.9%, 7% and 6.2% respectively
• New loan in July beat expectation and optimism on market liquidity, China financial sector performed well, Minsheng Bank (1988.HK), Ping An (2318.HK) and China Life (2628.HK) gained 7.4%, 7.3% and 4% respectively.
• Technically, HSI climbed above 10-MA, 100-MA and 250-MA with relatively high trading volume, sending a positive signal. The next resistance and support will be at 22,500 and 22,000 respectively.

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Morning Note

Company Highlights

Vard Holdings Limited announced that it has secured contracts with joint ventures of DOF Subsea and Technip for the design and construction of four Pipe Lay Support Vessels. The contracts constitute the largest order in VARD’s history, with an aggregate order value of approximately USD 1.1 billion. Two of the vessels, of VARD 3 05 design, will be delivered in 2Q 2016 and 3Q 2016 respectively. The hulls of these vessels will be built at Vard Tulcea in Romania and outfitted at Vard S�viknes in Norway. The other two vessels, of VARD 3 16 design, will be delivered from Vard Promar in Brazil, in 4Q 2016 and 2Q 2017 respectively. (Closing Price S$0.885, 5.988%)

Cordlife Group Limited announced that its subsidiary, Cordlife Medical Philippines, announced on 6 August 2013 that it officially launched its newest service, umbilical cord tissue banking in the Philippines. The offering allows expectant parents to store their newborn’s umbilical cord, and the stem cells it contains, for potential use in future therapeutic applications. (Closing Price S$1.090, - %)

Hyflux Ltd announced that its wholly-owned subsidiary, Hyflux Management and Consultancy Pte Ltd, has signed an exclusive strategic co-operation framework agreement for the development of the Hejiang Fobao Yulanshan Mountain Wetlands project in Sichuan Province, China. The other parties to the Agreement are the Hejiang County People's Government and Sichuan Hengxin Weiye Investment Co., Ltd.
The Project is envisioned to be a world-class ecological and environmentally friendly development consisting of residential, commercial, recreational and tourism developments. (Closing Price S$1.290, -0.386%)

Advanced Holdings Ltd announced that it has secured S$19.1 million in new contracts to provide engineering services and process equipment in the region, boosting its order book to an all-time record of almost S$100 million. These projects, which are slated for delivery from between 3Q2013 to 3Q2014, mainly relate to work for established global players in the Oil & Gas and Petrochemicals & Chemicals industries. (Closing Price S$0.250, 6.383%)

Yoma Strategic Holdings Ltd. updated shareholders that its 100% owned subsidiary, SPA Project Management Ltd, a company incorporated in Myanmar, has together with a consortium comprising Mitsubishi Corporation and JALUX Inc. been selected by the Ministry of Transport, Department of Civil Aviation of the Republic of the Union of Myanmar, as the successful tenderer to upgrade and operate the Mandalay International Airport and is invited to negotiate the contract. Upon negotiation, finalization and agreement on the terms of the final contract, the consortium will be awarded the tender. The Group, through SPA PM, will hold a 5% interest in the joint venture company to be incorporated and the initial equity contribution by all the parties will be around US$3.38 million. (Closing Price S$0.830, 1.840%)

Sound Global Ltd. announced that the Company won the bid for the sewage treatment plant project in Baoding Electricity Valley, Baoding High-Tech Industrial Development Zone. The project is situated in Baoding High-Tech Industrial Development Zone, Hebei Province. Investment and construction of the project will be carried out by Sound Global, with designed sewage treatment capacity of phase I of the project at 30,000m3/day. Baoding Electricity Valley Sewage Treatment Plant will be invested, built, operated and transferred as a BOT project. Total investment amount of phase I construction project is over RMB70,000,000. The sewage treatment tariff will be RMB1.815/m3 and licensed operating term is 30 years. (Closing Price S$0.640, 1.587%)

Chip Eng Seng Corporation Ltd announced that the Company’s wholly-owned subsidiary, Chip Eng Seng Contractors (1988) Pte Ltd, has been awarded a S$38.5 million contract by the Housing & Development Board for the remaining building works at Tampines Neighbourhood 4 Contract 27. The Contract comprises of the construction of 2 blocks of residential buildings with 289 dwelling units and other community facilities which have been partially carried out by other contractor. The construction period is approximately 13 months. (Closing Price S$0.720, 3.597%)

Sino Grandness Food Industry Group Limited announced positive developments related to its on-going expansion plan for both its own-branded 鲜绿园 (“Garden Fresh”) juices and 振鹏达 (“Grandness”) canned food products for the PRC market. Further to the success of securing significant indicative orders and new distributors for northern provinces in PRC after the Chengdu Trade Exhibition as announced on 15 April 2013, Sino Grandness also made major breakthrough at the retail points for the southern and south-western markets. In addition to being rolled out into Hongqi and Meiyijia convenience stores, Grandness canned food products’ distributors have made significant progress in terms of network expansion over the past one year as the Company in recent months also successfully added hundreds of retail points by rolling out Grandness canned food products into other reputable retail channels such as Walmart, 大润发 and 中百仓储 in provinces such as Zhejiang, Jiangsu, Anhui, Hunan, Hubei and Shanghai. (Closing Price S$0.015, 1.053%)