STI: -0.03% to 3054.8                                        KLCI: +0.39% to 1724.2
JCI: +1.53% to 4164                                          SET: -0.63% to 1315.4
HSI: +0.99% to 22394                                        HSCEI: +1.95% to 10250
Nikkei: +2.99% to 13978.4                                 ASX200: +0.16% to 5196.6
Nifty: -3.77% to 5341.5                                       S&P500: +0.42% to 1639.8
    
 
MARKET OUTLOOK:

This week’s market call has been archived at www.uniphillip.com.sg > education programs > Phillip Securities Research Webinar.

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 or the Global Macro report below. PhillipUT Wrap Account offers tactical asset allocation of unit trusts without front loading sales charge.)

Macro Data

China’s Non-Manufacturing PMI dipped slightly to 53.9 in August from 54.1, back to the same level as in June, the National Bureau of Statistics said. The sub-index for new orders gained 0.6 point to 50.9 last month, while input prices fell to 57.1 from July’s 58.2, easing cost pressures. "The rise in new orders set a good foundation for growth in the next few months," said Cai Jin, vice head of the China Federation of Logistics and Purchasing (CFLP).

Singapore's manufacturing activity remains upbeat but expanded at a slower pace at 50.5 in Aug from 51.8 in July. Nevertheless, the electronics sector continue to recover, marking its PMI at 51.3 in August as compared to 50.3 last month. "The decline in the overall PMI was attributed to lower new orders as well as a lower level of production output," the Singapore Institute of Purchasing & Materials Management said.

U.S. manufacturing sector grew last month at its fastest pace in more than two years, with ISM's index of national factory activity rising to 55.7 in Auguest from 55.4 the prior month. This beat expectations for 54.

Eurozone: Spain’s unemployment was little changed in August. Jobless claims fell 31 from July, leaving claims at 4.7 million.
 

Regional Market Focus

Singapore

• The benchmark STI closed marginally lower at 3,054.78 (-0.03%). The 4.2bn shares traded were worth S$1.3bn in value.
• The FTSE ST Mid Cap Index gained +0.66%, while the FTSE ST Small Cap Index gained +0.30%. The top active stocks were Rowsley (+0.91%), China Minzhong (-0.44%), SingTel (unchanged), DBS (-0.31%), and UOB (-0.49%).
• Recent global economic indicators have been relatively positive. This includes China’s Non-manufacturing PMI remaining in expansion territory, and US manufacturing sector growing at a faster pace. However, downside pressure continues to persist due to the concerns that US is moving closer to a military strike against Syria. 
• We therefore expect the STI to consolidate at current levels. We peg 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 Corp (Accumulate, TP: S$12.25).

Thailand

• Thai stocks traded in the green throughout the morning session on Tue before the market succumbed to short-term profit taking by proprietary traders and retail investors in late trading with the SET index finishing the day at 1,315.41 points.
• Renewed worries over Syria may put the SET index into a choppy downtrend today after top Republicans voiced support for US President Barack Obama’s call for military strikes against Syria while Turkey’s parliament authorized troops to launch cross-border action against Syria without UN authorization.
• Data showed the US manufacturing sector grew last month at its fastest pace since Jun 2011. Upbeat US economic data should keep pressure on the SET index as fears of a possible QE tapering by the US Federal Reserve, which will next meet on Sep 17-18 would encourage more foreign capital outflows.
• In Thailand, attention will be on rubber protests, which may possibly turn more violent while a government representative will negotiate with rubber farmers today after they threatened to intensify their protests following a cabinet offer which failed to appease them.
• Today we peg resistance for the SET index at 1340-1370 points and support at 1300-1285 points.   

• The Jakarta Composite Index (JCI) rebounded Tuesday (03/09), regaining some of the losses of a day earlier, as indications of improving global manufacturing lifted stock indexes in Asia. With all of its major industry sectors finished in green, the JCI closed at 4,164.012, up 62.779 points, or 1.53%. Agriculture sector fared best with 3.34%-advance, followed by mining sector with 2.45%-rise, and infrastructure sector with 2.38%-gain. The LQ45 index added 12.576 points, or 1.85%, to 691.394. Stock markets in Asia mostly turned higher on Tuesday, after Europe reported an upbeat manufacturing data a day earlier. The Markit’s Euro-Zone Purchasing Managers’ Index (PMI) rose to 51.4 in August, from 50.3 in July, with readings from Germany and Italy were particularly strong. The upbeat PMI report came after similar positive report from China on Sunday (01/09), which showed its official PMI hit a sixteen-month high. Gainers outpaced decliners 195 to 81 Tuesday on the Indonesia Stock Exchange, where 3.99 billion shares worth IDR 4.16 trillion changed hands on the regular board. Foreign investors’ transactions accumulated to a net sale of IDR 135.91 billion.
• Indonesian stocks will likely edge up today, extending gains in moderate pace, after higher closes on Wall Street but weak starts in Asia this morning. We expect the JCI to move modestly up, with support and resistance at 4,086 and 4,211, respectively. 

• Witnessing yet another loosing day, the Colombo bourse stretched further into the red terrain mainly due to the lowly buying sentiment and the lackluster participation of the investors. This triggered the ASPI to fall further, losing 30.36 points or 0.53% while recording a lowest value post to 03rd April 2013 (5,728.47).The S&P SL 20 settled the day at 3,210.89, just 11 points above the 3,200 mark. Price losers slammed the price gainers by 139:48. As at the daily closure the total market capitalization reduced to LKR 2.37Tn, while minimizing the year to date gain to 9.30%.The aggregate turnover for the day amounted to LKR 295.25Mn, indicating a rise of 6.51% against yesterday. Under the sectorial round-up, Bank Finance & Insurance (BFI) sector provided LKR 97.67Mn, dominating the list while accounting a share of 1/3 of the aggregate turnover, and Diversified Holdings (DIV) sector added LKR 82.28Mn. The daily volume amounted to 35.81Mn shares, indicating a gain of 39.78% against the previous trading day. Foreign participants appeared to be bullish during the day for the 5th consecutive trading day, resulting in a net foreign inflow of LKR 64.33Mn; this increased the year to date net foreign inflow to LKR 18.61Bn. With regard to the local FOREX, the USD currently stands at LKR 134.74/- selling and LKR 131.35/- buying.

• The Australian share market on Tuesday edged higher despite disappointing figures on retail sales and Australia's widening current account deficit. The benchmark S&P/ASX200 index gained 8.3 points, or 0.16 per cent to 5,196.6 points.
• Today (04/09/2013), the Australian share market looks set to open lower despite a rise in US stocks, although  concerns about a possible military strike on Syria cut into Wall Street's early gains. The SFE Futures 200 is pointing downwards 35 points or 0.67 per cent to 5,155.
• In economic news on Wednesday, the Australian Bureau of Statistics releases national accounts figures, including gross domestic product, for the June quarter, along with overseas arrivals and departures numbers for July. Meanwhile, the Australian Industry Group/Commonwealth Bank Australian Performance of Services Index (PSI) for month just ended is due to be released.
• No major equities news is expected.

• HSI gained 219 points or 0.99% to 22,394. CEI surged 195 points or 1.95% to 10,250. Trading volume was HKD56.937 billion.
• Handset related stocks outperformed with BYD Electronic (285.HK), Sunny Optical (2382.HK) and TCL Comm (2618.HK) climbing 5-7.6% after Microsoft Corp. offered to pay 5.44 billion euros for handset business of Nokia.
• ND Paper (2689.HK) and Lee & Man Paper (2314.HK) gained 13.3% and 7.6% respectively as China government strives to knock out enterprises with outdated production lines and announced the second batch of list.
• Tencent (700.HK) and Galaxy Ent (27.HK) climbed 2.2% and 1.6% respectively and both made record high.
• Technically, the next resistance and support will be at 22,696 and 22,000 respectively.

Morning Note

Company Highlights

Creative Technology Ltd today announced an entirely new range of premium Creative Aurvana headsets - the flagship Creative Aurvana Platinum, the Creative Aurvana Gold, and the Creative Aurvana Live!2 – the second generation of the award-winning Aurvana Live! headset. This new line-up of three audiophile-grade headsets will be unveiled at IFA Berlin at the Creative exhibit 110 in Hall 3.2, Messe Berlin from 6 - 11 September. The Aurvana brand represents Creative’s premium headsets that deliver true-to-life high performance sound. On top of pristine audio reproduction, the Creative Aurvana Platinum and the Creative Aurvana Gold come loaded with a dazzling array of ground-breaking technological features. Top of the list is the all-new ShareMe technology. This advanced technology allows two listeners of ShareMe-enabled Creative wireless headsets to easily link the two headsets wirelessly to a single smart device, and share their audio simultaneously – ideal for simultaneous listening to a podcast or audio book, or watching a movie together during a long commute. (Closing price: S$2.240, -)

Golden Ocean Group Limited is pleased to announce that it has acquired one 2010 Korean built 181,000 dwt Capesize bulk carrier and one 2010 China built 29,200 dwt Handysize bulk carrier. The vessels are bought in an enblock transaction jointly on a 50/50 basis with a strategic partner (cargo owner).The Company took delivery of the vessels today, September 3, 2013. The Board is of the opinion that it has obtained a favorable price and considers risk / reward as attractive from a historical perspective. (Closing price: S$0.800, -)

Global Logistic Properties Limited (“GLP”), the largest provider of modern logistics facilities in China, Japan and Brazil, will sell two wholly-owned properties in Japan to GLP J-REIT. The properties comprise a total gross floor area of 126,000 square meters (“sqm”) (1.4 million square feet (“sq ft”)) and the sale price of JPY28.5 billion (US$2871 million) represents a 1% premium to the properties’ newly appraised value as of 30 June 2013. This transaction is subject to completion, which is targeted to take place in March 2014. Net cash proceeds from the sale are estimated to be approximately JPY13.6 billion (US$137 million). GLP plans to hedge the proceeds and intends to reinvest the capital to maintain its 15% interest in the J-REIT as well as developments in China, Japan and Brazil. (Closing price: S$2.810, +2.18%)

Global Logistic Properties Limited (“GLP”), the largest provider of modern logistics facilities in China, Japan and Brazil, today announced that GLP Japan Income Partners I will sell seven properties to GLP J-REIT for approximately JPY27.5 billion (US$2771 million), which is in line with the properties’ newly appraised value as of 30 June 2013. GLP owns a 33.3% stake in GLP Japan Income Partners I. The properties have generated a cumulative net levered IRR in excess of 46% for investors in GLP Japan Income Partners I, before management fees and promotes, since they were acquired in February 2012. (Closing price: S$2.810, +2.18%)