STI: -0.08% to 3211.8                            KLCI: -0.22% to 1792.5
JCI: -2.25% to 4460.4                            SET: -1.32% to 1417.8
HSI: -0.82% to 23179                             HSCEI: -1.11% to 10599
Nifty: +0.05% to 5892.5                          ASX200: -0.35% to 5234.2
Nikkei: -0.07% to 14732                         S&P500: -0.26% to 1697.4
      
MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

U.S. consumer confidence fell to 79.7 from a revised 81.8 in August, compared to economists' expectations for 79.9.
U.S. home prices rose 12.4 percent in July compared with a year ago, the most since February 2006. An increase in sales on a limited supply of available homes drove the gains.

Hong Kong recorded a Balance of Payments surplus of HKD 25.4 billion in the June quarter compared to a surplus of HKD 16.4 billion in the previous quarter. However, current account deficit widened to HKD 2.48 billion from a revised shortfall of HKD 1.32 billion in the first quarter of 2013. The significant drop in current account was mainly due to weaker merchandise exports, said the Census and Statistics Department.
 

Regional Market Focus

Singapore

• The Straits Times Index (STI) ended 2.50 points lower or -0.08% to 3,211.75, taking the year-to-date performance to +1.41%.
• The FTSE ST Mid Cap Index declined -0.03% while the FTSE ST Small Cap Index gained +0.01%. The top active stocks were YHM (+26.32%), Rowsley (-3.73%), SingTel (unchanged), DBS (-0.30%), and Yangzijiang (+4.70%).
• The outperforming sectors today were represented by the FTSE ST Industrials Index (+1.03%). The two biggest stocks of the FTSE ST Industrials Index are Jardine Matheson Holdings (+1.27%) and Jardine Strategic Holdings (+1.14%). The underperforming sector was the FTSE ST Technology Index, which declined -0.91% with Liongold Corp’s and STATS ChipPAC‘s share prices declining -2.87% and remaining unchanged respectively. The FTSE Health Care Index gained +0.05%.
• Top picks are DBS (Accumulate, TP:$17.50), Singtel (Accumulate, TP: $3.99) and Keppel Corp (Accumulate, TP: $12.25). Deep Value Plays are Amara (Buy, TP: $0.74), Boustead (Buy, TP: $1.94) and Courts (Buy, TP: $1.03).

Thailand

• Thai and Indonesian stock markets continued to underperform regional peers on Tue. The composite SET index extended its losses by 18.91 points to finish the session at 1,417.77 points amid heavy sell-offs in PETRO and ICT counters.
• Global equities markets remained mixed. The Dow industrials extended its slide to a fourth session as macroeconomic worries especially over US budget and debt ceiling talks, which could threaten to derail economic recovery added to investor caution.
• In Thailand, political issues would remain in the spotlight especially those related to domestic macroeconomic conditions i.e. the Bt2trn borrowing bill for infrastructure development projects and export numbers which could reflect signs of a recovery by the end of the year. Domestic flooding situation also still bears close watching.
• The SET index is expected to suffer another down session today, tracking weak overseas leads and amid domestic political worries. For investment strategy, the 1400-point support level could be used as a buy-in point to bet on end-of-quarter institutional window dressing with focus on tourism and export plays. Cut loss if the SET index is unable to hold above 1400 points.
• Today we peg resistance for the SET index at 1420-1440 points and support at 1400-1380 points.   

• Most Indonesian stocks declined Tuesday (24/09), as the Rupiah hit a record 4-year-low against the US dollar, as concerns over US debt-ceiling negotiations and recent comments from US Federal Reserve officials weighed on sentiments. The Jakarta Composite Index (JCI) tumbled 2.25%, or 102.444, to end at 4,460.413. The decline on Tuesday included all nine major sectors, with miscellaneous industry sector lost 5.63%, construction sector fell 3.87%, and infrastructure sector shed 2.51%. The LQ45 index slipped 20.791 points, or 2.70%, to 749.202. The Rupiah dropped to 11,525 against the US dollar, as the greenback rebounded against Southeast Asian currencies this week. In Asia, most major stock indexes finished in red on Tuesday, as investors mulled over the US Federal Reserve’s monetary-policy plans. Decliners outran gainers 221 to 50 Tuesday on the Indonesia Stock Exchange, where volume on the regular board was 4.1 billion shares valued at IDR 4.71 trillion in total. Foreign investors’ transactions accumulated to a total net sale of IDR 624.85 billion.
• The Jakarta Composite Index (JCI) will likely trade lower today, continuing the decline a day earlier, amid downbeat tones in global markets, with concerns about the US debt ceiling deadline put pressure on markets. We expect the JCI to trade lower today, with support and resistance at 4,361 and 4,623, respectively.

• The bourse managed to close the day on a positive note as both indices entered in to green terrains. The benchmark index settled at 5,794.47 gathering 11.62 points (0.20%).With regard to share price movement 123 companies gained while 76 companies lost within the day. As at the daily closure, the total market capitalization was recorded at LKR 2.39Tn, with a year to date gain of 10.10%. The market PER and PBV were 16.48x and 2.20x respectively. The day witnessed an aggregated turnover of 816.92Mn, indicating a gain of 68.15% against the previous trading day. An aggregated quantity of 86.56Mn shares changed hands within the day resulting in a momentous rise of 280.62% against its previously recorded.  Under the sectorial summary, Bank Finance & Insurance (BFI) grabbed the attention recording a turnover of LKR 353.37Mn (43.26% contribution to the turnover), and Diversified Holdings (DIV) sector made a subscription of LKR 262.05Mn to this. Foreign participants maintained their bullish stance for the fourth consecutive trading day, resulting in a net foreign inflow of LKR 241.63Mn, whilst adding further to year to date net foreign inflow which amounts to LKR 19.38Bn. As at the day’s closure, the USD stood at LKR 133.71/- selling and LKR 130.36/- buying.

• The Australian share market on Tuesday fell for a third straight day, thanks to uncertainty about the debt ceiling stand-off in the US Congress. The benchmark S&P/ASX200 index was down 18.3 points, or 0.35 per cent to 5,234.2.
• Today(25/09/13), the Australian market looks set to open flat after Wall Street closed mainly lower following data showing US consumer confidence fell in September. The looming deadline for raising the US debt ceiling also weighed on sentiment.
• In economic news on Wednesday, the Reserve Bank of Australia (RBA) Financial Stability Review is due to be released.
• In equities news, David Jones and Nufarm are expected to post full year results, while ASX has its annual general meeting scheduled.

• HSI dropped 192 points or 0.82% to 23,179 and CEI lost 118 points or 1.1% to 10,599. Trading volume declined to HKD57.749 billion.
• Due to the concern of Feb’s tapering and fiscal cliff problem, HSI opened low at 23,324 (-47 points), which was already the day-high. 
• Chinese financial sector led CEI underperfom. CPIC (2601.HK), Haitong Sec (6837.HK) and Citic Sec (6030.HK) lost 2%, 2.6% and 2.9% respectively.
• State council may increase support for gas sector, related stocks out-performed with Anton Oilfield (3337.HK), Honghua Group (196.HK) and Jutal Oil Ser (3303.HK) gained 3.9-8.1%.
• Sunny Optical (2382.HK) slumped 3.6% after placement with 4.4% discount.
• Technically, HSI retained above 10-MA of 23,139. We expect a short-term correction if HSI drops below 10-MA. the next resistance and support for HSI are 23,500 and 23,000 respectively.

Morning Note
Company Highlights

Ley Choon Group Holdings Limited announced that the Company and together with its subsidiaries have successfully secured the following contracts worth a total of S$23.6 million in total Power Gas Limited. Apart from the PowerGas contracts, the Group also secured two additional projects this month including a $2.2 million Jurong Town Corporation contract for road surfacing and reinstatement works as well as subcontracting works worth S$4.8 million for the supply and installation of power cables for SP PowerAssets Ltd. The aggregate value of the above four contracts awarded to the Group is S$30.6 million and the Group’s order book to date stands at S$233.4 million. (Closing Price: S$0.20, -2.4%)

ISDN Holdings Limited, an integrated engineering solutions provider for diverse industries, has through its wholly owned subsidiary, Aenergy Holdings Company Limited, charted a key milestone in its foray into the energy sector with the acquisition of two Indonesian-based energy-related companies – PT Alabama Energy and PT Prima Paluta Energy. It has signed a sale and purchase agreement to acquire 80% equity of both companies from their vendors – Mr Charles D. Marpaung and Ms Rahmaniwati Sulaiman – who prior to the sale were joint and equal owners of both companies. This latest development will cement ISDN’s footprint in the vast Indonesian energy market where hydro-electric has been identified as one of the key energy sources to meet the rising demand of electricity for residential, business and industrial consumers in urban and suburban areas of the archipelago. (Closing Price: S$0.20, +0.4%)

Source: PhillipCapital Research - 25 Sep 2013