STI: -0.10% to 3208.6                           KLCI: -0.47% to 1784.1
JCI: -1.20% to 4406.8                           SET: +1.35% to 1436.9
HSI: +0.13% to 23209                           HSCEI: -0.01% to 10598
Nifty: -0.32% to 5873.9                         ASX200: +0.80% to 5275.9
Nikkei: -0.76% to 14620                       S&P500: -0.27% to 1692.8
      
MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA:
Applications for US home loans rose 5.5% in the week ended Sep 20. That follows a gain of 11.2% in the week ended Sep 13.

New home sales rebounded from a July dip in August. Builders sold new houses at an annual rate of 421,000 which is below expectations of 425,000 annualized sales. Sales climbed 7.9% from 390,000 is July.

Durable goods orders rose 0.1% during the month, beating expectations of -0.1%m-m. Bookings for non-defense capital goods ex-aircraft rose 1.5% after a 3.3% drop in July.

Taiwan's export orders rose for a second straight month in a row in August, reaching US$36.32 million for the month, up 0.5% from the same period last year.
 

Regional Market Focus

Singapore

• The benchmark STI closed flat at 3,208.58 (-0.10%). The 9.1bn shares traded were worth S$1.5n in value.
• The FTSE ST Mid Cap Index gained +0.23% while the FTSE ST Small Cap Index gained +0.33%. The top active stocks were Ipco (+29.41%), SingTel (+0.27%), EMS Energy (+30.14%), DBS (+0.42%), and UOB (+0.19%).
• The STI is may continue to consolidate, with downside pressure from concerns over US government spending cuts threatening to slow growth. US durable-goods orders, excluding the volatile transportation category, also disappointed with 0.1% decline vs expectations of a 1% gain per Bloomberg News survey.     
• We peg key near term support at 3,100 levels.
• Top Picks are DBS (Accumulate, TP: S$17.50), SingTel (Accumulate, TP: S$3.99) and Keppel Corp (Accumulate, TP: S$12.25). Deep Value Plays are Amara (Buy, TP: S$0.74), Boustead (Buy, TP: S$1.94) and Courts (Buy, TP: S$1.14).

Thailand

• Late market rebound led the composite SET index to finish the session at 1,436.9 points on Wed led by gains in PETRO, ICT and PROP counters after recent sharp losses of nearly 70 points over the last two sessions.
• External worries persisted, especially US budget fight, which threatened a federal government shutdown and could affect the market in the near term. Even though we believe US lawmakers would pass budget resolutions, mid-Oct US debt ceiling deadline would remain another cause for concern.
• Key economic data out of major economies in the US, Europe and China still bears close watching. The latest China Beige Book report painted a mixed picture as the survey showed a slowdown in contrast with official signs of an expansion pickup.
• Even though there is a possibility that end-of-quarter institutional window dressing will come into play, we believe a rebound in the SET index would remain fragile amid light trading while foreign investors stayed on the selling side for the third day in a row on Wed. Today we expect the SET index to trade in a range of between 1420-1460 points. For investment strategy, we advise investors to book partial profits around 1460 points.
• Resistance on the main index is seen at 1440-1460 points and support at 1420-1400 points today.    

• The Jakarta Composite Index (JCI) fell for a third-straight-day on Wednesday (25/09), as stock markets in Asia mostly declined amidst worries that US lawmakers will fail to reach an agreement before the budget deadline in October. The benchmark index of Jakarta-listed stocks retreated 53.646 points, or 1.20%, to end at 4,406.767, with all but one major sector ended in red. Agriculture sector climbed 0.70%, as shares of Astra Agro Lestari (AALI) - the largest company in the sector by market cap – surged 2.89% to IDR 19,600, after the palm plantation firm reported 12.4% increase in its CPO sales volume in the first eight months of this year. Other stock sectors declined Wednesday (25/09), with basic industry sector fell 2.14%, infrastructure sector shed 1.63%, and finance sector trimmed 1.56%. The LQ45 index slid 12.166 points, or 1.62%, to 737.036, with 24 of its 45 blue-chip components finished in negative territory.
• The Jakarta Composite Index (JCI) may further decline today, as fears of possible US debt-ceiling stalemate loomed. We expect the JCI to move lower today, with support and resistance at 4,311 and 4,491, respectively.

• The bourse witnessed a slight drop particularly, during the latter part of the day, setting both indices to conclude in the red territories. The benchmark ASPI index settled at 5,783.62 losing 10.85 points (-0.19%) and S&P SL20 experienced a drop of 8.82 points (-0.27%) to settle at 3,205.48. With regard to share price movements, 79 companies gained while 105 companies lost within the day. As at the daily closure, the total market capitalization was recorded at LKR 2.38Tn, with a year to date gain of 9.89%. The market PER and PBV were 16.45x and 2.20x respectively. The day witnessed an aggregated turnover of LKR 582.78Mn, indicating a decrease of 28.66% against the previous trading day. An aggregated quantity of 71.91Mn shares changed hands within the day resulting in a decrease of 16.93% against its previously recorded. Under the sectorial summary, Diversified Holdings (DIV) topped the list recording a turnover of LKR 278.22 (47.74% contribution to the turnover), and Land and Property (L&P) sector made a subscription of LKR 101.13Mn (17.35% contribution to the turnover) to this. Foreign participants maintained their bullish stance for the fifth consecutive trading day, resulting in a net foreign inflow of LKR 111.87Mn, whilst adding further to year to date net foreign inflow which amounts to LKR 19.49Bn. As at the day’s closure, the USD stood at LKR 133.74/- selling and LKR 130.39/- buying.

• The Australian share market on Wednesday defied other Asian markets, rising on the back of strength in the energy and consumer goods sector. The benchmark S&P/ASX200 index added 41.7 points, or 0.8 per cent, to 5,275.9 points.
• Today (26/09/13), the Australian market looks set to open lower after falls on Wall Street as investors remained cautious over the lack of progress in Washington budget talks.
• In economic news on Thursday, the Australian Bureau of Statistics relases job vacancyfigures for August.
• No major equities news is expected. Meanwhile, ANZ Australia chief executive Philip Chronican is slated to speak at an American Chamber of Commerce in Australia event, while Women On Boards releases an evaluation of ASX200 companies' gender diversity practices.

• HSI gained 30 points or 0.1% to 23,209. CEI was flat and closed at 10,598. Trading volume remained low at HKD52.43 billion.
• Retail stocks outperformed before long National day holiday. Sincere (244.HK), Bauhaus Int’l (483.HK) and I.T (999.HK) surged 29%, 16% and 4.6% respectively.
• China Coal sector remained weak with China Coal (1898.HK), China Shenhua (1088.HK) and Yanzhou Coal (1171.HK) dropped 1.8-3.3%. We retained cautious on this sector due to its high volatility and not promising fundamental.
• BDI climbed above 2,000, reflecting improving demand for shipping. China Mer Hold (144.HK), Sinotrans Ship (368.HK) and Sinotrans (598.HK) gained 4.4%, 4.6% and 4% respectively.
• Technically, HSI retained just above 10-MA of 23,162. The next resistance and support for HSI are 23,500 and 23,000 respectively.

Morning Note
Company Highlights

Yangzijiang Shipbuilding (Holdings) Limited announced that the Group has launched its first ever 10,000 TEU containership from its Jiangsu New Yangzi Shipbuilding Co., Ltd. (“New Yangzi Yard”). This is also the first time ever any Chinese shipyard has built and launched a 10,000 TEU containership. Till date, the Group has in total 11 of the 10,000 TEU vessels on its order book with options outstanding to get a further 14 more of such vessels. The 11 vessels on the order book came about (1) as the Group through its subsidiaries, New Yangzi Yard and Jiangsu Yangzi Xinfu Shipbuilding Co., Ltd. (“Xinfu Yard”) entered into shipbuilding contracts worth US$0.7 billion with Seaspan Corporation on 8 June 2011 to build seven units of 10,000 TEU containerships with options for additional eighteen units of identical vessels to be built; and (2) as Seaspan Corporation exercised the options on 24 January 2013 to build additional four units of the 10,000 TEU containerships with New Yangzi Yard and Xinfu Yard with total contract value of US$0.36 billion. These 11 newly developed container vessels which are fuel-efficient and eco-friendly in nature are scheduled for deliveries in 2014 and 2015. The vessels’ proprietary design meets the current demand for larger capacity vessels with lower emissions. (Closing Price: S$1.120, +0.4%)

OUE Ltd announced that it is currently exploring the establishment of a commercial real estate investment trust (the “Proposed REIT”) to be listed on the Main Board of Singapore Exchange Securities Trading Limited (the “SGX-ST”). The initial portfolio of the Proposed REIT is expected to include OUE Bayfront, being an 18-storey office building located at 50 Collyer Quay, Singapore 049321, together with its ancillary properties comprising a conserved tower building used for a food and beverage outlet and a link bridge with retail shops (collectively, the “OUE Bayfront Property”). Besides the OUE Bayfront Property, other commercial properties owned by Lippo China Resources Limited are currently also being considered for acquisition by the Proposed REIT. (Closing Price: S$2.550, -8.6%)

Following the approval of the Shareholders obtained at the EGM held on 5 September 2013, the Board of Rowsley Ltd announced that the Proposed RSP (RSP ARCHITECTS PLANNERS & ENGINEERS (PTE) LTD) Acquisition and the Proposed Land (VACANT LAND LOCATED IN THE ISKANDAR DEVELOPMENT REGION, JOHOR BAHRU, MALAYSIA) Acquisition were completed. An aggregate of 875,000,000 RSP Consideration Shares at an issue price of S$0.150 per Share were issued in favour of the RSP Vendors, and an aggregate of 2,386,666,666 Land Consideration Shares at an issue price of S$0.150 per Share were issued in favour of the Land Nominees. (Closing Price: S$0.655, +1.6%)

Source: PhillipCapital Research - 26 Sep 2013