STI: -1.29% to 3015.4                                        KLCI: -0.43% to 1716.8
JCI: -2.17% to 4073.5                                        SET: -0.93% to 1303.2
HSI: -0.31% to 22326                                         HSCEI: -0.18% to 10233
Nikkei: +0.54% to 14053.9                                    ASX200: -0.67% to 5161.6
Nifty: +2.00% to 5448.1                                      S&P500: +0.81% to 1653.1 
    
 
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This week’s market call has been archived at www.uniphillip.com.sg 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

U.S. MBA Mortgage Applications rose 1.3% in the week ended August 30, after sliding 2.5% the prior week. The rise came as 30-year mortgage rates fell to 4.73% versus 4.80% the prior week, which was its highest this year.
Imports to the US rose 1.6% in July, while exports fell 0.6%. As a result, the nation’s trade gap widened 13.3% to $39.1 billion in July. Economists expected it to have expanded to $38.6 billion.

Eurozone: Markit’s Eurozone Composite PMI rose to 51.5 last month from 50.5 in July. The recovery is looking increasingly broad-based.
Eurozone GDP in the second quarter was 0.3% higher than in the first, in line with expectations.

Australia’s GDP rose 0.6% in the second quarter, up from 0.5% growth in the quarter prior and was slightly higher than expectations of 0.5%.
 

Regional Market Focus

Singapore

• The benchmark STI closed lower at 3,015.42 (-1.29%). The 3.3bn shares traded were worth S$1.3bn in value.
• The FTSE ST Mid Cap Index declined -0.91% while the FTSE ST Small Cap Index declined -0.08%. The top active stocks were SingTel (-1.99%), DBS (-1.05%), OCBC Bank (-1.40%), UOB (-0.89%) and China Minzhong (-0.45%).
• The STI may end higher today due to the US Fed reassuring that the economy maintained a “modest to moderate” pace of growth. Recent data on Eurozone Composite PMI rose m-m, with recovery looking increasingly broad based.
• 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 fell 12.2 points to 1,303.21 points on Wed as the market came under pressure from a possible military action in Syria after US President Barack Obama gained Republican support for Syria strike.
• Overseas stock markets steadied on Wed. US equities edged slightly higher though strong auto sales lifted investor confidence in the US economy but concerns remained as US senators voted on Wed to authorize a maximum 90-day window for US military action against Syria.
• Key economic data will still bear close watching as it may provide clues on the US Federal Reserve’s QE policy when the FOMC next meets on Sep 17-18. The market’s attention will also be on the results of the ECB and BOJ’s policy meetings today and the outcomes of the G20 summit next week.
• In the absence of positive trading cues, we expect the SET index to be in a choppy downtrend today. Fund flows remained mixed with a slowing pace of foreign selling. Trading volume was light. Overall we expect a trading range of 1285-1320 points for the SET index today.
• Resistance for the SET index is seen at 1320-1340 points and support at 1285-1260 points today.

• Indonesian stocks fell Wednesday (04/09), in a volatile week that saw the benchmark index moving choppily, as investors awaited the release of the US Federal Reserve’s Beige Book that will provide clues to when the US central bank will taper its bond purchase size in near. The tapering of the stimulus will put more pressure on the Rupiah, which has already been weakening. The Jakarta Composite Index (JCI) dropped 90.557 points, or 2.17%, to end at 4,073.455, trimming gains from a day earlier. The decline on Wednesday included eight of the 9 major industry sectors, with miscellaneous industry sector lost 3.12%, infrastructure sector plunged 3.09%, and consumer goods sector trimmed 2.81%. The LQ45 index measuring Indonesia’s blue-chip stocks shed 17.786 points, or 2.57%, at 673.608. Fears of US-led strike on Syria also drag on stocks on Wednesday (04/09), especially after US President Barack Obama on Tuesday (03/09) secured more support in US Congress for a military strike. A strike on Syria will potentially disrupt oil supplies from the region, which would cause higher fuel prices in Indonesia – a net oil importer – in the midst of the nation’s struggle to stem inflation. The Rupiah fell to IDR 11,030 against the US dollar on Wednesday, even after Bank Indonesia (BI) hiked its benchmark interest rate by a surprising 50 basis points to 7.00% on an unscheduled meeting last week. 192 shares fell, and 73 shares advanced Wednesday on the Indonesia Stock Exchange, where volume on the regular market reached 4.62 billion shares worth IDR 4.11 trillion. Foreign investors posted net sale of IDR 159.31 billion.
• The Jakarta Composite Index (JCI) will likely advance in moderate pace today, following rallies on US markets and upbeat starts in some of Asia’s stock markets today. We expect the JCI to climb, with support and resistance at 4,021 and 4,171, respectively. 

• The Colombo bourse concluded on a mixed note, resulting in the indices to close on either side. The benchmark ASPI lowered by 7.47 points or 0.13% to conclude at 5,744.89.However the S&P SL20 managed to record a tiny gain, breathing within the green terrain for the first time in three trading days. Under the sectorial review, Bank Finance & Insurance (BFI) dominated the list providing LKR 168.22Mn while accounting to nearly 40% of the total turnover and Diversified Holdings (DIV) sector made a subscription of LKR 130.13Mn. As at the day’s close, the total market capitalization stood at LKR 2.37Tn, charting a year to date gain of 9.16%. The market PER & PBV stood at 16.34 and 2.18 respectively. During the day, a total of 32.40Mn shares changed hands, indicating a drop of 9.53% against the previous trading day. Foreign participants appeared to be bearish for the first time during the week breaking its streak of inflows observed during the past 5 trading days, to record a net foreign outflow of LKR 41.09Mn whilst reducing the year to date net foreign inflow to LKR 18.57Bn. Foreign buying for the day amounted to LKR 168.36Mn and foreign selling was recorded as LKR 209.45Mn. The local FOREX market for the day closed with, the USD selling at LKR 134.74/- and buying at LKR 131.35/-.

• The Australian share market on Wednesday lost ground as renewed concerns about a possible US military strike on Syria outweighed encouraging figures on economic growth. The  benchmark S&P/ASX200 index was down 35 points, or 0.67 per cent to 5,161.6 points.
• Today (05/09/2013), the Australian market looks set to open lower despite Wall Street's jump overnight after strong US car sales pointed to strength in the manufacturing sector.
• In economic news on Thursday, the Australian Bureau of Statistics will release international trade in goods and services data for July.
• No major equities news is expected.

• HSI dropped 68 points or 0.31% to 22,326 after 4 days rallies. CEI lost 17 points or 0.18% to 10,233. Trading volume was HKD68.986 billion, but was HKD55.9 billion only after excluding placement of CCB (939.HK), Want Want China (151.HK) and Xinyi Glass (868.HK).
• After 4 days rebound, HSI was weak due to concerns over U.S. military action against Syria and also the placement activity dampen market sentiment.
• Xinyi Glass (868.HK), the largest glass producer in China, dropped 5.9% after placement.
• Handset related stocks continued to outperform with Sunny Optical (2382.HK), AAC Tech (2018.HK) and VST Holdings (856.HK) climbing 3-5.8% due to acquisition of Nokia’s handset business by Microsoft and also expectation of Apple’s new Iphone.
• Technically, 22,000 will be key support for HSI and we think it may fill the gap with width of 116 points from 21,771 made on 28 Aug if falling below the support. The next resistance and support will be at 22,696 and 22,000 respectively.

Morning Note

Company Highlights

Hiap Hoe Limited announced its second strategic overseas acquisition in two months with the acquisition of 380 Lonsdale Street, a commercial building comprising a 445 bay commercial car park, 5,130 sqm of office accommodation and ground level retail tenancies for A$43.8 million. The asset sits on a 3,165 sqm site at the corner of Lonsdale Street and Elizabeth Street, in the heart of Melbourne’s Central Business District. Mr Teo Ho Beng, Hiap Hoe’s Executive Chairman and Chief Executive Officer, said, “We are pleased to have secured this unique opportunity to fast track our overseas expansion and anchor our presence in Melbourne. Together with our recently announced 6-22 Pearl River Road acquisition, we hope to achieve economies of scale and better cost efficiencies through the intended redevelopment of these properties. The acquisition of 380 Lonsdale Street comes with an approved planning permit to develop an iconic 46-level mixed-use tower. Under the approved plans, the development will feature ground floor retail, commercial office suites, 627 residential apartments and a 740 space car parking facility (comprising 295 car parks dedicated to the apartments and 445 bays for the commercial car park). This exciting development option will generate future growth and create value for its shareholders.

Yangzijiang Shipbuilding (Holdings) Ltd is pleased to announce that following four (4) options consisting of two (2) 82000DWT and two (2) 64000DWT bulk carriers became effective in July 2013 as announced on 7th August 2013, there is further four (4) options with an aggregate value of US$ 110.4 million converted into effective orders in August 2013. The new effective Contracts comprise of two (2) units of 1,100 TEU containerships and two (2) unit of 82,000 DWT bulk carries; whereby such vessels are scheduled for deliveries in year 2015, and therefore will not have any significant impact on the earnings of the Group for the financial year ending 31 December 2013. In first two months of 2H2013, the Group had secured a total of eight (8) effective shipbuilding contracts with an aggregate value of US$0.214 billion. Year to date, a total of thirty five (35) shipbuilding contracts amounting to US$1.22 billion had come into effective. As of the announcement day, the Group has a total of 51 options worth US$2.87 billion entered with its respective buyers, of which 22 options are for containerships worth US$1.79 billion and 29 options are for multi-purpose bulk carriers worth US$1.08 billion.

Global Logistic Properties Limited, the largest provider of modern logistics facilities in China, Japan and Brazil, will commence development of GLP Zama, a new multi-tenant logistics facility in Greater Tokyo. GLP Zama will be constructed on the site of a former automobile factory, originally acquired as part of a property portfolio in December 2011. The existing single-story building of 35,000 square meters (“sqm”) (376,000 square feet (“sq ft”)) has commenced demolition works and will be redeveloped into a five-story, modern logistics facility with an expected gross floor area of 130,000 sqm (1.4 million sq ft). The project is expected to be completed in July 2015, with the total development cost estimated to be JPY20.9 billion (US$210million).

Cordlife Group Limited, and together with its subsidiaries, a multi-product healthcare company catering to the mother and child segment, announced that it has entered into a conditional sale and purchase agreement with certain vendors to acquire a 19.92% interest in StemLife Berhad (“StemLife”), a company listed on Bursa Malaysia for an aggregate consideration of RM29.58 million (“Acquisition”). The aggregate consideration for the Acquisition will, unless elected by Cordlife to pay fully in cash, be satisfied via the issuance of 8 million new ordinary shares in Cordlife (“Consideration Shares”) at an issue price of S$1.30 for each Consideration Share and cash payment of RM2.85 million