STI: +1.90% to 3179.5                           KLCI: -0.09% to 1770.8
JCI: +3.35% to 4522.2                          SET: +3.14% to 1445.1
HSI: +1.47% to 23252                           HSCEI: +1.59% to 10706
Nifty: -0.17% to 5840.6                         ASX200: +0.54% to 5247.9
Nikkei: +0.12% to 14404                      S&P500: +0.57% to 1697.6
      
MARKET OUTLOOK:
By Joshua Tan, Head of Research

In this week’s webinar has been archived at www.uniphillip.com > education programs > Phillip Securities Research Webinar. In it we feature a Trading Buy on Sin Heng Heavy Machineries. On the macro side we are still reiterating that we believe an equities bull market is still on. In particular we like the particular macro trades of long China (ETF 83188.HK), long Commodities (ETF GSG.US), short Gold (via Shares Borrowing and Lending), short US Treasuries (ETF TBT.US)

(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

USA industrial production rose in August by the most in 6 months, 0.4%m-m, indicating US manufacturing will add to GDP growth.

India's headline inflation accelerated to 6.1% in August from 5.79% in the preceding month, the fastest pace in six months, driven by a 18.18% jump in food prices.
 

Regional Market Focus

Singapore

• The benchmark STI closed higher at 3,179.48 (+1.90%). The 3.6bn shares traded were worth S$1.7bn in value.
• The FTSE ST Mid Cap Index gained +1.88% while the FTSE ST Small Cap Index gained +1.53%. The top active stocks were SingTel (+2.22%), Rowsley (+10.62%), Ezra (+2.78%), DBS (+1.04%) and UOB (+1.54%).
• The STI may trade flat today in the absence of a catalyst, having registered gains yesterday. Key events in the near term include the outcome of the US FOMC meeting. The market seems to expect the start of tapering, but with only a small reduction due to previous mixed economic data numbers.
• We peg key near term support at 3,100 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

• The composite SET index finished the session up 3.14% on Mon as Lawrence Summers’ withdrawal from US Federal Reserve Chairman consideration boosted market optimism on QE in view of its rival Janet Yellen’s policy which favored a more gradual easing of stimulus.
• Thai stocks may face wild swings today. Yesterday’s sharp rally of up to 44 points could also leave the market vulnerable to any intraday dips while investors are awaiting the outcome from the US FOMC’s two-day policy meeting on the timing and amount of QE tapering. The market seems to have been pricing in a tapering of no more than US$10bn.
• In Thailand, all eyes will remain on parliamentary debate in the second and third readings of the Bt2trn borrowing bill for infrastructure development before the end of this week, a move that could trigger speculative buying into construction firms expected to benefit from the government’s mega infrastructure projects.
• Thai stocks could see short-term market dips today. If the SET index can hold above 1420 points, there is potential for a rebound back towards 1480-1500 points but much will depend on the outcome of the US FOMC’s policy meeting this week.
• Resistance on the main index is seen at 1460-1480 points and support at 1400-1420 points today. 

• Most Indonesian stocks advanced Monday (16/09), as stock markets in Asia gained, after news that former US Treasury Secretary Lawrence Summers dropped out of the running for the next Fed chairman. The Jakarta Composite Index (JCI) jumped 146.700 points, or 3.35%, to finish at 4,522.239. All nine major industry sectors rose Monday, led by miscellaneous industry sector that surged 9.17%, followed by consumer goods sector with 4.47%-gain, and basic industry sector with 4.29%-advance. The LQ45 index added 30.066 points, or 4.08%, at 766.775. 233 shares rose, and 51 shares declined Monday on the Indonesia Stock Exchange, where 5.45 billion shares worth IDR 6.10 trillion changed hands on the regular board. Foreign investors accumulated net purchase transactions of IDR 480.48 billion.
• The Jakarta Composite Index (JCI) looked set for another climb today, as markets globally rose after Fed chief’s candidate Larry Summers withdrew from the running for the US central bank chairman. We expect the JCI to advance today, with support and resistance at 4,364 and 4,601, respectively.

• The Colombo bourse concluded the day on a mixed note, resulting the indices to close on different spaces. The benchmark ASPI ended its 4 days winning streak and closed within the red terrain lowered by 19.34 points or 0.34% to settle at 5,730.12; having gathered 144.20 points or 2.55% during the past 4 trading days. However, the S&P SL20 managed to breathe within the green terrain gaining 3.50 points or 0.11%, to settle at 3,180.24. As at the day’s close, the total market capitalization stood at LKR 2.36Tn, charting a year to date gain of 8.88%. The market PER & PBV stood at 16.30 and 2.18 respectively. The turnover for the day which totaled up to record LKR 683.49Mn.During the day, a total of 24.10Mn shares changed hands, indicating a drop of 53% against the previous trading day. Foreign participants appeared to be bearish during the day, breaking its streak of inflows observed during the past 3 trading days, to record a net foreign outflow of LKR 69.12Mn, while reducing the year to date net foreign inflow to LKR 19.31Bn. Foreign selling for the day amounted to LKR 395.53Mn and foreign buying was recorded as LKR 326.41Mn. The local FOREX market for the day closed with, the USD selling at LKR 133.89/- and buying at LKR 130.54/-.

• The Australian share market on Monday continued its run of gains that began on September 6, the day before the federal election. The market has touched five-year highs and risen on six out of seven trading days since September 5 gaining more than 2.0 per cent.   The benchmark S&P/ASX200 index gained 28.4 points, or 0.54 per cent, to 5,248 points.
• Today (17/09/2013), the Australian market looks set to open lower despite international markets mostly gaining on news Larry Summers had withdrawn from the Federal Reserve chairmanship race and lessened fears over Syria.
• In economic news on Tuesday, the Reserve Bank of Australia releases its monthly board meeting minutes, while the Australian Bureau of Statistics (ABS) releases August data for international merchandise imports and new motor vehicle sales.
• In equities news, New Hope Coal is expected to post full year results.

• HSI opened high yesterday to 23,210 (+295) due to slower Fed’s tapering progress expectation, and gained 337 points or 1.47% to 23,252 at the close. CEI climbed 167 points or 1.59% to 10,706. But trading volume decreased to HKD54.638 billion.
• Financial sector led HSI up. HSBC (5.HK), AIA (1299.HK) gained 1.3% and 2.6% respectively.
• Link REIT (823.HK) rebounded 2.7% with relieved Fed’s tapering pressure.
• The rumor that Chong Hing Bank  (1111.HK) would be acquired by Yuexiu Group in near term sent its share price up 10.3%.
• Tencent (700.HK) gained 2.5% to make its new high.
• Technically, the next resistance and support are 23,512 and 23,000 respectively.

Morning Note

Company Highlights

Chip Eng Seng has been awarded a S$103.8 million contract by HDB for the construction works at Jurong West Neighbourhood 6 Contract 31. The Contract is not expected to have any material impact on the net tangible assets and earnings per share of the Group for the current financial year ending 31 December 2013.

Source: PhillipCapital Research - 17 Sep 2013