STI: -0.30% to 3028.9                                         KLCI: +1.40% to 1727.6
JCI: +2.23% to 4195.1                                        SET: +0.14% to 1294.3
HSI: +0.12% to 21731                                        HSCEI: -0.26% to 9825.2
Nikkei: -0.53% to 13388.9                                  ASX200: +0.84% to 5134.9
Nifty: +2.35% to 5409                                         S&P500: -0.32% to 1632.9       
 
MARKET OUTLOOK:

This week’s market call on webinar is at our usual 11.15am timeslot, please register by clicking the blue link at the top of this morning note.
 
Apart from giving the market strategy, this week’s webinar also gives an update on the Property sector.

(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

Thailand’s current account deficit widened to USD0.71 billion in July from USD0.66 billion in June, mainly by increased gold imports, as well as the repatriation of profits and dividends resulting from exceptional earnings in the automobile industry and a weaker yen, according to the Bank of Thailand. The current account excluding gold imports would have shown a surplus of $255 million, said Macroeconomic and Monetary Policy Department senior director Mathee Supapongse.
 
In China, growth momentum has accelerated for the second straight month in August with Purchasing Manager Index (PMI) rose to 51.0 from 50.3 in July, marking the highest in this year, according to figures released by the National Bureau of Statistics (NBS).
 
U.S. personal income rose to a seasonally adjusted 0.1% from 0.3% in the preceding month. This was less than the expected 0.2%. U.S. spending, which drives two-thirds of the U.S. economy, edged up only 0.1% last month, marking a sharp slowdown from the revised 0.6% increase in June. The m-m spending figure was much weaker than the 0.3% rise expected by analysts.
The Michigan final index of consumer sentiment for this month fell to 82.1, a four-month low, from 85.1 in July, which was the highest since July 2007. Higher mortgage rates are threatening to stall momentum in the housing market and turmoil in Egypt and the threat of U.S. intervention in Syria is raising the specter of higher fuel prices.
 
Eurozone consumer confidence fell less-than-expected to an annual rate of -16.0 from -17.4 in the preceding month. This was better than expectations of -17.0%. The Eurozone unemployment rate was steady at a record 12.1% in July. The total number of people without work in the 17-nation Eurozone fell 15,000 to 19.23 million, after a drop of 35,000 in June.
German retail sales dropped 1.4% from June, when they declined 0.8%. This was an unexpected drop from expectations of a rise of 0.6%.
Spanish retail sales fell by 3.8% yoy on a calendar-adjusted basis in July, after a revised 4.9% fall a month earlier. This marks the 37th month in a row of falling retail sales.
Italy CPI rose more-than-expected at 0.3%, from 0.1% in the preceding month. Expectations were at 0.2%.
 
Japan posted some strong economic data early Friday. The CPI ex volatile fresh-food costs, rose 0.7% from a year earlier, accelerating from June’s 0.4% rise. The gain was the largest since November 2008.
The unemployment rate slipped to 3.8% from 3.9% in June, marking the second consecutive monthly drop for the jobless rate.
 
India’s GDP shows continuing slowdown. For the April-to-June quarter, it grew at a rate of 4.4%, compared to growth of 5.4% in the same period of the previous fiscal. Major factors contributing to this weaker result are disappointing manufacturing and mining sectors, as well as the fall in rupee, which hit a record low of 68.85 earlier this week.
 
South Korea’s industrial output shrunk -0.1% mom in July, this was under expectations of +0.3%.
 
Australia private sector credit rose 0.4% in July, in line with expectations.

Regional Market Focus

Singapore

• The benchmark STI closed lower at 3,028.94 (-0.3%). The 2.7bn shares traded were worth S$1.7bn in value.
• The FTSE ST Mid Cap Index gained +0.15%, while the FTSE ST Small Cap Index gained +0.03%. The top active stocks were SingTel (+0.29%), DBS (-1.06%), UOB (-1.83%), OCBC Bank (-0.80%) and Capitaland (+1.33%).
• The STI may end higher today due to positive China manufacturing PMI data increasing from 50.3 to 51.0 m-m.
• However, concerns over Syria continue to linger, while recent US personal income and consumer sentiment economic data disappoint below expectations. 
• We expect the STI to consolidate at current levels, with key near term support at 3,000 levels.
• Top picks for the year are Pan United (Accumulate, TP: S$1.27), SGX (Buy, TP: S$8.30) & Keppel Cord (Accumulate, TP: S$12.25).

Thailand

• Thai stocks finished last Fri up a marginal 1.77 points at 1294.3 points after the SET index rallied to test 1300 points but failed to hold above this barrier on short-term selling pressure.     
• The SET index could likely extend its rebound into a third day on Mon after data showed China’s official manufacturing PMI hit a 16-month high, raising optimism that China will come back as a dominant global economic driver.  China’s HSBC manufacturing PMI data is also due out today.
• Concerns over Syria eased after US President Barack Obama held off on an imminent military strike against Syria to seek approval from the US Congress in a decision that likely delays US action for at least 10 days. Congress is now in recess and not scheduled to return to work until Sep 9.
• The market still seems to lack internal positive triggers while rising costs of living as a consequence of LPG, electricity tariff and expressway toll increases may continue to sap domestic consumption amid continued protests by rubber growers.  
• Today we peg resistance for the SET index at 1300-1340 points and support at 1285-1270 points.   

Indonesia

• The Jakarta Composite Index (JCI) advanced Friday (30/08), amidst mixed closes in Asia, after Bank Indonesia (BI) raised its benchmark interest rate by a more-than-expected 50 basis points, in the attempt to support the falling Rupiah and stem inflation. The JCI surged 91.496 points, or 2.23%, to finish at 4,195.089. For the week, the benchmark index added 0.61%. All main industry sectors on the JCI rose on Friday, led by basic industry sector with 5.14%-gain, followed by consumer goods sector with 4.95%-climb, and agriculture sector with 3.34%-rise. Among the blue-chip shares, 35 climbed and 5 fell, bringing the LQ45 index a 21.053 points or 3.10%-gain, to end at 701.066. Indonesian market responded positively to Thursday’s move by the central bank - Bank Indonesia - that hiked its reference rate by 50 basis points to 7.0% to stem inflation after the fuel-price rise and to support the weakening currency. The Rupiah was traded around IDR 10,900 against the US dollar on Friday, easing from the volatile levels above IDR 11,000 a few days earlier. Cues that a US-led military strike on Syria may not be imminent also helped lift sentiments in Asia and Indonesia’s markets on Friday. 210 shares gained and 67 shares declined Friday on the Indonesia Stock Exchange, where 4.67 billion shares worth IDR 6.22 trillion changed hands on the regular market. Foreign investors posted net purchase of IDR 628.28 billion.
• Indonesian stocks may edge up today, as markets in Asia started in slightly positive tone after data from China showed better-than-expected manufacturing activity, and as the Yen weakened against its major counterparts. We expect the JCI to move moderately higher today, with support and resistance at 4,059 and 4,263, respectively.

Sri Lanka

• The market ended on a mixed sentiment, resulting in the indices closing on different paths. The benchmark ASPI managed to breathe within the green terrain again at 5,834.04 gaining 8.98 points or 0.15%.  However, the S&P SL20 closed within the red terrain at 3,261.33 dipping by 3.63 points or 0.11%. With regard to the movement in share prices, a total of 119 companies gained while only 81 lost. The daily turnover of LKR 352.79Mn indicated a dip of 31.26% against the previous trading day. Under the sectorial summary, Diversified Holdings (DIV) dominated the rest providing LKR 164.69Mn, while accounting a share of 47% of the day’s total turnover. Bank Finance & Insurance (BFI) made a sectorial contribution of LKR 93.62Mn. Moreover, nearly 75% of the daily turnover was accounted by the two sectors DIV and BFI. The traded volume for the day stood at 83.03Mn, indicating a momentous gain of 287.30% against the previous trading day. Foreign participants appeared to be bullish for the third consecutive trading day, adding a net foreign inflow of 66.35Mn to the year to date net foreign inflow which amounts to LKR 18.54Bn; foreign buying for the day amounted to LKR 97.44Mn & selling amounted to LKR 31.09Mn.

Australia

• The Australian share market on Friday ended higher as investor caution prompted by possible military action against Syria eased. The benchmark S&P/ASX200 index gained 42.6 points, or 0.84 per cent, to 5,135 points.
• Today(02/09/13), the Australian market looks set to open lower after disappointing consumer spending news helped pull US stocks lower in a quiet end to the market's worst month in more than a year.
• In economic news on Monday, the Reserve Bank of Australia (RBA) releases the index of commodity prices for month just ended, while the Australian Bureau of Statistics (ABS) releases the business indicators for June quarter and building approvals data for July. The Australian Industry Group performance of manufacturing (PMI) index for month just ended is due out as is the TD Securities-Melbourne Institute inflation gauge for August, the Dun and Bradstreet business expectations survey and the RP Data Rismark Home Value Index for August.  Also, expected is National Australia Bank's quarterly online retail sales index.

Hong Kong

• HSI gained 26 points or 0.12% to 21,731.37 and CEI lost 25 points or 0.26% to 9,825.21 respectively. Trading volume was HKD50.485 billion. For August, CEI gained 1.7%, outperformed HSI, which lost 0.7% for a month.
• The rumor that National Development and Reform Commission will release new policy of subsidy to Photovoltaic industry sent the related stocks up. Singyes Solar (750.HK), GCL-Poly Energy (3800.HK) and Hanergy Solar (566.HK) surged 10.2%, 5.7% and 5.6% respectively.
• Galaxy Ent (27.HK) rose 2.7% and broke record high again. It was also the best-performed HSI constituent stock in August, which gained 15.5%.
• Technically, we still expect HSI rise to fill the gap created on 28 Aug, the next resistance and support will be at 21,879 and 21,423 respectively.

Morning Note

Company Highlights

China Minzhong Food Corporation Limited today received a letter from PT Indofood Sukses Makmur Tbk in relation to a possible offer. The Offer, if made, is expected to be announced later today (Closing price: -, -%)

Forterra Real Estate Pte. Ltd. acting in its capacity as trustee-manager of Forterra Trust confirms that pursuant to an approval of the Board made prior to 28 August 2013 the Trust has secured a head lease over an additional 3,404 sqm of retail space at Huai Hai Mall resulting in the expansion of the total gross floor area ("GFA") of Huai Hai Mall, which is under the Trust's ownership and control, from 7,620 sqm to 11,024 sqm. Forterra has entered into a 20 year lease with an option at its discretion for an additional 10 years for the additional space and does not require any capital commitment for this transaction. (Closing price: S$2.210, +2.8%)

Source: PhillipCapital Research - 2 Sep 2013