STI: +0.05% to 3180.9                          KLCI: +0.23% to 1774.9
JCI: -0.10% to 4517.6                           SET: -0.09% to 1443.8
HSI: -0.31% to 23180                            HSCEI: -0.52% to 10650
Nifty: +0.17% to 5850.2                         ASX200: +0.06% to 5251.2
Nikkei: -0.65% to 14311                        S&P500: +0.42% to 1704.8
      
MARKET OUTLOOK:
By Joshua Tan, Head of Research

This week’s webinar has been archived at www.uniphillip.com 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: The National Association of Home Builders/Wells Fargo confidence index registered 58 this month, matching August’s revised reading as the strongest since November 2005. This was in line with expectations.
The consumer-price index increased 0.1%, the least in three months, after a 0.2% gain in July. This was lower than expectations of 0.2%.
The builders group’s index of present sales of single-family homes held at 62 this month, matching the highest since January 2006. A measure of sales expectations for the next six months declined to 65 from 68. The gauge of buyer traffic increased to 47, the highest since October 2005, from 46 the prior month.

Eurozone: The eurozone's trade surplus widened to 18.2 billion euros from 13.9 euros in July last year. Exports rose by 3% yoy, following a 3% drop in June compared to a year ago.
Eurozone wages continue to rise but the rate of increase has eased. Hourly pay jumped 1.1% in the year to June compared with 1.8% in the 12 months to the end of March.
German investor confidence rose to 49.6 from 42 in August. That’s the highest level since April 2010. Economists predicted a reading of 45, according to the median of 37.

China: Foreign Direct Investment (FDI) into China amounted to $8.38 billion in August, up 0.62% y-o-y as compared to 24.13% in July and 20.12% in June. Despite a substantial slowdown, incoming FDI, which excludes financial sectors, touched USD79.77 billion, up 6.37% y-o-y for the first eight months in 2013.
As how MOC spokesman Shen Danyang put it, "Such single month volatilities are insufficient to reflect changes in China's overall FDI. There is no need to worry about (a reverse) in the trend".

Hong Kong: The seasonally adjusted unemployment rate remains unchanged at 3.3% for three consecutive months to August, Hong Kong’s Census & Statistics Department said. Total employment increased by around 1,700 to 3.75 million, while the labour force also grew by around 3,600 to 3 .89 million in June-August.
Hong Kong's Secretary for Labour and Welfare Matthew Cheung said the resilient domestic demand helped the labour market to absorb nearly half of the increase in labour supply during June - August. He expects the economy to sees moderate growth.

Singapore’s non-oil domestic exports (NODX) contracted 6.2% in August, extending its declining trend for the seventh straight month, according to figures from trade agency International Enterprise Singapore (IE Singapore).

Regional Market Focus

Singapore

• The benchmark STI closed flat at 3,180.92 (+0.05%). The 3.5bn shares traded were worth S$1.3bn in value.
• The FTSE ST Mid Cap Index declined -0.41% while the FTSE ST Small Cap Index gained +0.83%. The top active stocks were SingTel (+1.63%), DBS (-0.18%), HanKore (+10.00%), Rowsley (-5.60%) and Asiasons (+54.72%).
• The STI may continue to trade flat today. 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 ended the session down a mere 1.33 points on Tue as the market still awaited the outcome of the US FOMC policy meeting on QE while sporadic bouts of profit taking kicked in after recent strong gains.
• Thai stocks are expected to trade to the upside in a tight band today after investors are still awaiting a statement from the US Federal Reserve on QE due out tonight after the end of the FOMC’s two-day policy meeting. We expect the US Federal Reserve will trim its monthly bond purchases by US$10bn-US$15bn, a move that is unlikely to wreck much havoc on stock markets. The yield on US 10-year Treasury notes over the last five days slipped 0.02% to 2.84%, reflecting investors’ view of a smaller size of the taper. 
• In Thailand, the widely watched parliamentary debate in the second and third readings of the Bt2trn borrowing bill for infrastructure development will be a key factor that could have a significant impact on sentiment and should eventually lead to economic recovery picture while many economic agencies cut the country’s GDP growth forecast for this year to 3.4%-4%.
• More sector rotation plays will likely continue to dominate in the near term ahead of the Federal Reserve meeting outcome.
• Today we peg resistance for the SET index at 1460-1480 points and support at 1420-1400 points.

• The Jakarta Composite Index (JCI) edged down Tuesday (17/09), along with mostly negative market tones in Asia, ahead of the US Federal Reserve’s policy meeting. The benchmark index of Indonesian stocks slid 4.619 points, or 0.10%, to close at 4,517.620. Four of the 9 major sectors ended in negative zone on Tuesday, with construction sector fell 1.38%, miscellaneous industry sector lost 1.25%, and consumer goods sector declined 0.75%. Commodity-related sectors supported the JCI on Tuesday, with mining sector advanced 1.51%, and agriculture sector gained 0.75%. The LQ45 index that measure Indonesia’s blue-chip shares retreated 1.151 points, or 0.15%, to close at 765.624. Decliners outran gainers 138 to 107 Tuesday on the Indonesia Stock Exchange, where 5.18 billion shares worth IDR 5.63 trillion traded on the regular board. Foreign investors’ transactions accumulated to a net purchase of IDR 43.39 billion.
• The Jakarta Composite Index (JCI) will likely move higher today, as investors await decision from the US Federal Reserve, with sentiments improved in global markets overnight. We expect the JCI to climb today, with support and resistance at 4,453 and 4,569, respectively.

• Witnessing yet another loosing day, the Colombo bourse stretched further into the red terrain mainly due to the poor buying sentiment and the lackluster participation of the investors. This triggered the ASPI to fall further, and to settle at 5,705.26 just 5 points above the 5,700 mark. The S&P SL20 ended the day at 3,161.90, losing 18.34 points or 0.58%. Foreign Investors appeared to be bearish during the day resulting in the second largest net foreign outflow (LKR 671.72Mn) being logged for the year; foreign selling for the day amounted to LKR 695.18Mn and buying amounted to LKR 23.46Mn. Further, this dragged the year to date net foreign inflow (LKR 18.64Bn) below the LKR 19Bn mark. The aggregate turnover for the day amounted to LKR 913Mn, indicating a rise of 33.58% against the previous trading day. Under the sectorial round-up, Diversified Holdings (DIV) sector provided LKR 724.12Mn (80% of the aggregated turnover), dominating the list and Bank Finance & Insurance (BFI) sector added LKR 70.75Mn. The daily traded volume amounted to 27.89Mn shares, indicating a gain of 15.72% against the previous trading day. Price losers smashed the price gainers by 105:65. As at the daily closure the total market capitalization reduced to LKR 2.35Tn, while reducing the year to date gain to 8.41%. With regard to the local FOREX, the USD currently selling at LKR 133.88/- and buying at LKR 130.53/-.

• The Australian share market on Tuesday was almost unchanged as strength in the banking sector outweighed weakness among resources stocks. Cautious investors are biding their time ahead of the outcome of the US Federal Reserve's policy meeting and an expected announcement on Thursday, AEST, on the tapering of its economic stimulus. The benchmark S&P/ASX200 index was up 3.2 points, or 0.06 per cent to 5,251.2 points.
• Today (18/09/2013), the Australian market looks set to open higher after gains on Wall Street amid greater investor confidence the US economy can withstand an expected reduction of Federal Reserve stimulus measures. The SFE 200 Futures is pointing upwards 8 points or 0.15 per cent to 5,264.
• In economic news on Wednesday, Reserve Bank of Australia assistant governor Malcolm Edey (Financial System), is scheduled to be a panel member at the Financial Services Institute of Australasia (FINSIA) Financial Services Conference in Sydney. The Westpac-Melbourne Institute Leading Indexes of Economic Activity report is due out.
• No major equities news is expected.

• HSI lost 71 points or 0.31% to 23,180. CEI dropped 55 points or 0.52% to 10,650. Trading volume was still low at HKD55.047 billion.
• HSI was weak yesterday after 337 points gain on Monday to reflect Lawrence Summer withdrawal of his candidature from the race to next Fed’s chairman. On the macro economic front, China’s August FDI grew 0.6% yoy, trailed market estimate of 12.5%, and slowed from 24.1% in July.
• Potential acquisition sent Wing Hang Bank (302.HK) up 39.4%. Dahshing Banking (2356.HK), Dah Sing (440.HK) and Bank of Asia (23.HK) gained 17.7%, 9.6% and 5.7% respectively.
• Small-mid cap Macau gambling stocks outperformed with Macau Legend (1680.HK), Amax HLDGS (959.HK) and Successuniverse (487.HK) surged 15.6%, 22% and 38.1% respectively.
• Technically, 14-RSI showed overbought signal, we expect a short-term correction. The next resistance and support for HSI are 23,512 and 23,000 respectively.

Morning Note

Company Highlights

ParkwayLife REIT (PLife REIT) Life REIT has further extended its footprint in Japan with the acquisition of five nursing home properties at a combined purchase price of approximately JPY 4.5 billion (approximately S$59.2 million). The acquisition of the properties will be in line with the valuation and is expected to generate a net property yield of 7.0%. The acquisition is expected to be completed by October 2013.

China Dairy Group has entered into a Share Sale Agreement on 12 September 2013 to sell its entire equity interest of 60% held in Silver Bridge International Holdings Kuitun Dairy Company to Xinjiang Production and Construction Group Dairy Company at a consideration of RMB 6 million.

Ramba has completed the deepening of the JRR-1 production well with log analysis confirming the presence of hydrocarbons in the Upper and Lower Baturaja Formation as well as the Talang Akar Formation.

Source: PhillipCapital Research - 18 Sep 2013