USA:
Mortgage application activity, which includes both refinancing and home purchase demand, slipped 4.7 percent in the week ended Aug 9. That was the largest decline since the week ending June 28. The gauge of loan requests for home purchases, a leading indicator of home sales, fell 5.4 percent, resuming a downward trend that was interrupted with a slight rise the prior week. Core PPI, which excludes food and energy, increased 0.2% mom, in line with expectations.

Eurozone:
The euro area’s economy emerged from a record-long recession in the second quarter, led by Germany and France. Eurozone GDP expanded 0.3 percent in the April-June period after a 0.3 percent contraction in the previous three months, exceeding expectations of 0.2 percent. GDP contracted yoy by -0.7 percent which beat expectations of -0.8%.

France’s GDP grew by 0.5% in the second quarter, far surpassing the 0.2% that was expected, however, their CPI fell more-than-expected last month to -0.3% from 0.2% in the preceding month. Expectations were at -0.1%.

Germany GDP swelled 0.7% in the second quarter from the preceding period, in line with economists’ expectations.
 
Australia:
Westpac Consumer Confidence Index rose by 3.5% m-m sa in Aug, after the tiny 0.1% m-m drop in July. Sub indices for current condition and expectation rose by 1.5% m-m and 4.9% m-m respectively. The improving Consumer Confidence Index indicates a better outlook in the nation's domestic consumption.

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Regional Market Focus

Singapore

• The benchmark STI closed higher at 3,248.66 (+0.14%). The 2.6bn shares traded were worth S$1.2bn in value.
• The STI may face slight pressure on the back of continued concerns over potential tapering of QE. Economists predict for this to start in Sept 2013 as global economic data shows signs of strengthening.
• 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 Cord (Accumulate, TP: S$12.25).

Thailand

• Thai stocks traded in range on Wed. The SET index pulled back to test support level of 1,450 points before it recouped earlier losses to finish the session up 1.55 points at 1,460.63 points helped by buying in bank and ICT counters.
• The SET index is expected to remain stuck in the same trading range of 1440-1475 points but concerns about a possible QE tapering in the US soured sentiment in Asia in early trading on Thu. Short-term trading catalysts especially corporate earnings season are about to come to an end but a combination of factors including (i) interim dividend plays, (ii) a slowdown in foreign sell-off of Thai equities with renewed buying in derivatives market, and (iii) the modest strength of the baht should somewhat help temper the market’s slide.
• The market is expected to keep a close watch on key macroeconomic data out of major economies.
• The strategy is to be selective in stocks. Investors may book partial profits to bring equity holdings back to 50% of the portfolio if the SET index fails to hold above 1450 points.
• Resistance for the SET index is pegged at 1475-1500 and support at 1450-1440 today.

Indonesia

• The Jakarta Composite Index (JCI) advanced Wednesday (14/08), as stock indexes in Asia climbed following positive economic data in the US. The JCI gained 47.336 points, or 1.02%, to close at 4,699.733. The LQ45 index climbed 9.821 points, or 1.26%, to 786.286. The gains on Wednesday followed positive moves in the region, which was also supported by weaker Yen. Seven out of the nine major industry groups rose, with miscellaneous industry sector advanced 1.82%, financial sector gained 1.29%, and infrastructure sector added 1.11%. 150 shares rose, and 107 shares fell Wednesday on the Indonesia Stock Exchange, where 3.46 billion shares worth IDR 3.88 trillion traded on the regular board. Foreign investors posted net purchase of IDR 18.09 billion.
• Indonesian stocks will likely decline today, paring gains on the previous trading day, as sentiments turned negative on global markets. Concerns about the potential tapering of the Federal Reserve’s bond purchases will likely weigh on markets today. We expect the JCI to be traded lower, with support and resistance at 4,633 and 4,733, respectively.

Sri Lanka

• The Colombo bourse ended the trading day on an upbeat sentiment, resulting in the indices to close within the positive terrain. The market moved up at a moderate pace during early hours, however the bourse boosted mainly towards the second-half of trading. The benchmark ASPI crossed the 6,200 for the first time in nearly 2 months, to reach an intraday peak of 6,227.00 gaining a notable 84 points from a day earlier, however, as at the daily closure index settled at 6,208.67 gaining 65.80 points or 1.07%; this was the highest value recorded after 20th June 2013 (6,211.44). The S&P SL20 too gained a notable 30.87 points or 0.89% to settle at 3,484.10. The total market capitalization leaped to LKR 2.39Tn, while extending the year to date gain to 10.23%. The market PER and PBV stood at 16.43x & 2.21x respectively. The daily aggregated turnover amounted to LKR 1.95Bn, noting a momentous gain of 383.28% against the previous trading day. Under the sectorial round-up, Bank Finance & Insurance (BFI) sector dominated the list providing LKR 1.17Bn. Diversified Holdings (DIV) sector stood next in line providing LKR 652.95Mn. Shares totaling up to 49.45Mn changed hands during the day, resulting in a rise of 109.90% compared to the previous trading day. With regard to share price movement, price losers slammed the price gainers by 101:79. Foreign investors were bullish during the day resulting in a net foreign inflow of LKR 857.56Mn, which was resulted by foreign buying of LKR 1.54Bn and selling of LKR 680.37Mn; this pushed the year to date foreign inflow above the LKR 17Bn mark once again. With regard to the local FOREX market, the USD closed at LKR 133.20/- selling and LKR 130.00 /- buying.

Australia

• The Australian, share market on Wednesday closed flat after strong earnings reports from major companies failed to hearten investors. The market was subdued on Wednesday despite market heavyweight Commonwealth Bank posting a record profit of $7.68 billion. The benchmark S&P/ASX200 index declined 0.3 points, or 0.01 per cent to 5,157.4 points.
• Today (15/08/13), the Australian market looks set to open lower following mixed performances on international bourses as Europe looks to be emerging from recession.
• In economic news on Thursday, The Australian Bureau of Statistics is due to release Average Weekly Time Earnings data for the six months to May.
• In equities news, Wesfarmers, the Goodman Group, Platinum Asset Management and AVJennings are expected to post full year results, while AMP is slated to announce first half results.

Hong Kong

• HK market was closed yesterday due to typhoon signal. HSI gained 269 points of 1.21% to 22,541, near the day high, on Wednesday. CEI climbed 257 points or 2.59% to 10,185. Trading volume climbed to HKD72.865 billion.
• PBOC conducted RMB11 billion 7-day reverse-repo, led the CEI significantly outperformed HSI.
• Market expected ease of financing, together with some mainland property developers released results beat expectation, KWG Property (1813.HK), Sino-ocean Land (3377.HK) and China Resources Land (1109.HK) gained 8.9%, 6.8% and 6% respectively.
• Technically, HSI climbed above the resistance at 22,500 with high trading volume on Wednesday, 14-RSI is now 66, we are still positive on the up trend. Next resistance and support will be at 22,800 and 22,013 respectively.

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Morning Note

Company Highlights

LionGold Corp Ltd announced that it has on 14 August 2013 entered into an agreement with Carnegie Hall Group LLC, Platinum Partners Liquid Opportunities Fund and Spring Road Advisors LLC. Pursuant to the Subscription Agreement, the Company has agreed to allot and issue and the Subscribers have agreed to subscribe for up to: (a) 180 million new ordinary shares in the capital of the Company  at an issue price of S$1.10907 per Placement Share; and (b) 135 million new detachable warrants, each entitling the holder of such warrant to subscribe for one (1) new ordinary share in the capital of the Company at S$1.3555 per New Share, subject to the terms and conditions as set out in a deed poll constituting such warrants at an issue price of S$0.02. The Placement will be conducted in three tranches of (a) 90 million Placement Shares and 45 million Placement Warrants under Tranche 1 Placement, (b) 45 million Placement Shares and 45 million Placement Warrants under Tranche 2 Placement, and (c) 45 million Placement Shares and 45 million Placement Warrants under Tranche 3 Placement. (Closing Price S$ - , - %)

Pan-United Corporation Ltd announced that Pan-United Infrastructure Pte. Ltd, a wholly-owned subsidiary of the Company, has, together with Petroships Investment Pte Ltd, a private limited company incorporated in Singapore, on 14 August 2013 entered into a sale and purchase agreement with Macquarie International Infrastructure Holding Limited, a wholly owned subsidiary of Macquarie International Infrastructure Fund Limited, a mutual fund company listed on the Mainboard of the Singapore Exchange Securities Trading Limited, in relation to the sale and purchase of 20,000,000 shares in the capital of Singapore Changshu Development Company Pte. Ltd. (representing 40% of the total issued shares of SCDC). Pursuant to the Sale and Purchase Agreement: (a) MIHL will sell to PUI, and PUI will purchase 18,000,000 shares in the capital of SCDC (representing 36% of the total issued shares of SCDC) for a cash consideration of S$100,980,000; and (b) MIHL will sell to Petroships, and Petroships will purchase 2,000,000 shares in the capital of SCDC (representing 4% of the total issued shares of SCDC) for a cash consideration of S$11,220,000 (Closing Price S$ 0.910, 0.552%)

Rex International Holding Limited signed a term-sheet with Norwegian private equity investor Pareto Staur SPV1 AS, providing the Company with access to three new onshore exploration & production opportunities in the island nation of Trinidad and Tobago in the Caribbean. Rex International Holding will invest USD 9 million for a 51.99 per cent stake in Rex Caribbean Oil Company Ltd, while Pareto Staur will invest USD 6.5 million for a 34.76 per cent stake. The transaction will involve the initial investment into three E&P licenses; namely, the Inniss-Trinity field, the South Erin Block and the Cory Moruga Block ‘E’. These assets already have producing discoveries and Rex Caribbean Oil Company will, after completion of the farm-in activities, hold 100 per cent of the Inniss-Trinity field and working interest of 75 per cent in the South Erin Block and 51 per cent in the Cory Moruga Block ‘E’. The transaction is expected to be completed in the coming weeks and is subject to regulatory due diligence. (Closing Price S$ 0.820 3.145%)

ISOTeam Ltd. announced that the following contracts have been secured by the Group: (i) TMS Alliances Pte. Ltd., a wholly owned subsidiary of the Company, has been awarded the tender with a contract value of approximately $5.47 million by Ang Mo Kio Town Council to carry out repairs and redecoration works to 27 HDB blocks at Ang Mo Kio Avenue 6, Avenue 8 and Avenue 9. The completion of this project is expected to take place in November 2014; (ii) ISO-Team Corporation Pte Ltd, a wholly owned subsidiary of the Company, has secured a project worth approximately $1.63 million from SKK (S) Pte Ltd to undertake repairs and redecoration works at Blks 402 to 411 and Blks 413 to 417 Bukit Batok West Avenue 2, Avenue 4 and Avenue 7. The completion of this project is expected to take place in April 2014; and (iii) ISO-Team Corporation has been awarded the tender with a contract value of approximately $3.77 million by Pasir Ris – Punggol Town Council to carry out repairs and redecoration works to 17 blocks at Blks 130 to 146 Pasir Ris Street 11. The completion of this project is expected to take place in August 2014, In addition to the Contracts secured, the Board also wishes to update that based on the provisional tender results released by Jurong Town Council, TMS Alliances has emerged as the lowest tenderer in respect of the project to carry out repairs and redecoration works to 14 blocks of flats in Bukit Batok East Division. The value of this project is approximately $2.38 million. (Closing Price S$ 0.395, 2.597%)