STI: +0.41% to 3193.9                           KLCI: -0.20% to 1771.4
JCI: -1.20% to 4463.3                            SET: -0.32% to 1439.1
HSI: -0.27% to 23117                             HSCEI: -0.59% to 10588
Nifty: +0.84% to 5899.5                          ASX200: -0.25% to 5238.1
Nikkei: +1.35% to 14505                        S&P500: +1.22% to 1725.5
      
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In this week’s webinar has been archived at www.uniphillip.com 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 as well affirms the view that we believe this equity bull run is not over yet.

(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 MBA index of mortgage application activity, which includes both refinancing and home purchase demand, rose 11.2% in the week ended Sep 13. That follows a 13.5% slump last week that took the index to its lowest since November 2008.
Housing starts rose 0.9% from July to a seasonally adjusted annual rate of 891,000, slightly less than the 915,000 forecast.

China’s housing prices surged in August at their fastest pace in at least 30 months, marking an eight straight month of gains. The residential prices in four of the largest Chinese cities — Beijing, Shanghai, Guangzhou and Shenzhen — jumped 15%-19% over the year, and well above the national average of 8.3%, according to data released by the National Bureau of Statistics.
Chinese government has tried to keep property prices in check, but it also refrains from excessive measures as a strong property market has helped offset a general economic slowdown.

Malaysia’s inflation rate rose 1.9% year-on-year in August as compared to 2.0% last month. The Statistics Department said, “Three main groups - food & non-alcoholic beverages, housing, water, electricity, gas and other fuels and transport together accounted for 80.3% of the overall increase recorded in the current period.”

Australia: The Conference Board Leading Economic Index for Australia increased 0.3% in July to 122.6 following a 1.1% decline in June, and a 0.1% in May. At the same time, the Conference Board Coincident Economic Index, a measure of current economic activity, declined 0.2% in July to 120.8 following a 1.1% decline in June and no change in May.
The Westpac Leading Index (MoM) improves to 0.6% in July from 0%. This indicates the likely pace of economic, activity three to nine month into the future, was 4.1% in July, above its long term trend of 2.9%.
 

Regional Market Focus

Singapore

• The benchmark STI closed higher at 3,193.85 (+0.41%). The 5.4bn shares traded were worth S$1.4bn in value.
• The FTSE ST Mid Cap Index gained +0.85% while the FTSE ST Small Cap Index gained +1.73%. The top active stocks were SingTel (-0.27%), HanKore (+7.58%), DBS (+0.55%), Asiasons (+31.71%) and Thai Beverage (+3.64%).
• The STI is expected to end higher today, as the US Fed unexpectedly postponed the start of QE tapering. Markets had predicted a marginal reduction of the $85 billion-a-month bond buying program. While tapering of QE is eminent, the continuation of economic stimulus in the near term is expected to be positively received by the market.
• 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

• Thai stocks rallied to touch 1,450 points at the open on Wed but gains were later pared by intraday profit taking while the market awaited QE clarity from the US Federal Reserve. The SET index finished the session down 4.65 points at 1,439.13 points.
• The US Federal Reserve on Wed surprised the market by leaving its US$85bn a month stimulus program in place and there was no fixed calendar schedule for tapering which was contingent on the strength of US economic data. The US central bank also kept the fed funds rate close to zero as long as unemployment rate exceeded 6.5% and inflation was under 2.5%. The Federal Reserve’s decision sent stock markets around the globe higher overnight. 
• In our view, the SET index could be headed for a strong start today as the US Federal Reserve’s surprise decision to postpone the start of the win down of its QE program would be a short-term positive for the market. In Thailand, parliamentary debate in the second and third readings of the controversial Bt2trn borrowing bill for infrastructure development scheduled for today and tomorrow may bring a wave of speculative buying into shares of construction firms and banks in the near term. The upside target for the SET index is seen at 1480-1500 points. 
• Resistance for the SET index is pegged at 1460-1480 points and support at 1420-1400 points today.

• Most Indonesian stocks declined Wednesday (18/09), amidst mixed closes in Asia, as investors took cautious stance ahead of the much-awaited US Federal Reserve’s meeting results later on the day. The Jakarta Composite Index (JCI) slipped 54.366 points, or 1.20%, to end at 4,463.254. Six of the 9 major stock sectors declined Wednesday, with consumer goods sector fell 2.30%, finance sector lost 2.15%, and basic industry sector trimmed 1.35%. The LQ45 index shed 13.423 points, or 1.75%, to close at 752.201, with 31 of its 45 blue-chip components ended in red. 138 shares fell, and 117 shares climbed Wednesday on the Indonesia Stock Exchange, where volume on the regular market totaled at 4.91 billion shares worth IDR 4.21 trillion. Foreign investors posted net sale of IDR 368.86 billion.
• The Jakarta Composite Index (JCI) will likely rise today, as global markets cheer US Federal Reserve’s decision to keep its bond purchase program with the same rate. We expect the JCI to advance today, with support and resistance at 4,415 and 4,529, respectively.

• The Colombo bourse concluded on a negative note, resulting in the indices to close within red terrain for third consecutive day. The benchmark ASPI and the S&P SL20 dropped by 4.52 points each to settle the day at 5,700.74 and 3,157.38 respectively. As at the day’s closure, the total market capitalization stood at LKR 2.35Tn, charting a year to date gain of 8.32%. The market PER & PBV stood at 16.21x and 2.17x respectively. Under the sectorial round-up, Diversified Holdings (DIV) dominated the list providing LKR 320.54Mn while accounting to nearly half of the total turnover for the day, and Information Technology (IT) sector made a subscription of LKR 162.23Mn. During the day, a total of 40.46Mn shares changed hands, indicating a gain of 45.08% against the previous trading day. Foreign participants appeared to be bullish for the first time during the week to record a net foreign inflow of LKR 361.53Mn; foreign buying for the day amounted to LKR 561.62Mn and foreign selling was recorded as LKR 200.09Mn. The local FOREX market for the day closed with the USD selling at LKR 133.92/- and buying at LKR 130.57/-.
• Colombo Stock Exchange (CSE) will be closed tomorrow (19th  September 2013), as it is a public holiday for Sri Lanka.

• S&P/ASX 200 Index lost 13.10 points or 0.25% to 5,238.14.
• Today (19/09/2013), the Australian market looks set to open higher as the US Fed wrong footed markets by deciding against trimming its stimulus programme.
• Financial and mining sectors led the broad-based rally as investors, buoyed by the prospect of super easy money staying for a longer period, piled into riskier assets.
• No major equities news is expected.

• HSI lost 63 points or 0.27% to 23,117 and CEI declined 62 points or 0.59% to 10,588. Trading volume was low at HKD50.18 billion.
• The trading volume reflected investors’ “wait and see” before the results of meeting of the Fed’s policy-setting Federal Open Market Committee in Washington.
• Local Banking sector underperformed after surge in previous trading days, Bank of Asia (23.HK), Dahsing Banking (2356.HK) and Wing Hang Bank (302.HK) dropped 4.5%, 4% and 2.3% respectively.
• Chinese government announced new subsidy policy to new energy cars with strength trailed market expectation, BYD Company (1211.HK), Greatwall Motor (2333.HK) dropped 3.1% and 2.9% respectively.
• Technically, the next resistance and support for HSI are 23,512 and 23,000 respectively.

Morning Note

Company Highlights

BBR Holdings has secured approximately S$105.8 million worth of contracts since it last announced the award of a Housing & Development Board building project in March 2013. There is no material impact on the earnings per share or net tangible assets per share of the Company for the current financial year ending 31 December 2013. (Closing Price: S$0.255, -1.923%)

Keppel Corporation has secured two Floating Production Storage and Offloading (FPSO) conversion contracts from repeat customers worth a combined value of S$190 million. The above contracts are not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the current financial year. (Closing Price: S$10.650, 0%)

Source: PhillipCapital Research - 19 Sep 2013