STI: -0.44% to 3194.3                           KLCI: -0.55% to 1774.2
JCI: -0.02% to 4405.9                           SET: -0.84% to 1424.8
HSI: -0.36% to 23125                            HSCEI: -0.54% to 10541
Nifty: +0.14% to 5882.3                        ASX200: +0.35% to 5294.5
Nikkei: +1.22% to 14799                      S&P500: +0.35% to 1698.7
      
MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA: Initial jobless claims dropped 5,000 last week to a seasonally adjusted 305,000. This is close to a six-year low. US GDP expanded at a 2.5% annual rate in the April-June period. However, its price index for consumer purchases, which is the Federal Reserve's preferred gauge of inflation, fell at a 0.1% rate.

Eurozone: Loans to the private sector dropped 2% from a year earlier. That is the 16th monthly decline.
The M3 money supply rose to 2.3% in August from 2.2% in July.

Taiwan’s central bank kept the discount rate on 10-day loans to banks at 1.875% as predicted by analysts.

Singapore’s manufacturing sector expanded 3.5% over the year in August, buoyed by a 5.3% gain in electronics output. However, factory output contracted 1.4% compared to July. Excluding biomedical manufacturing which contracted 1.9% on-year, Singapore’s industrial production grew 4.8%, according to the Economic Development Board (EDB).

Hong Kong’s trade deficit ballooned to HKD 39.6 billion (equivalent to 11.4% of the value of goods imports) in August as compared to a shortfall of HKD 37.2billion in the previous month. The value of total goods exports fell 1.3% y-o-y to HKD 307.5 billion, while the value of goods imports fell 0.2% y-o-y to HKD 347.1 billion.

Thailand’s trade deficit shrunk significantly to $94.7 million in August from the earlier month’s $2.28 billion. Exports surged 7.36% m/m (or 3.92% y/y) to $20.47 billion, while imports decreased 3.67% m/m (or 2.07% y/y) to $20.56 billion. Overall, trade in August improved and it is expected that exports will continue to recover in the last quarter of the year, said Ms. Srirat Rastapana, director-general of the ministry's Department of International Trade Promotion.
 

Regional Market Focus

Singapore

• The Straits Times Index (STI) ended 14.27 points lower or -0.44% to 3,194.31, taking the year-to-date performance to +0.86%.
• The FTSE ST Mid Cap Index gained +0.24% while the FTSE ST Small Cap Index declined -0.55%. The top active stocks were SingTel (-0.53%), Rowsley (-5.34%), OKH Global (+1.34%), LionGold Corp (+7.17%), and DBS (-0.84%).
• The outperforming sectors today were represented by the FTSE ST Technology Index (+3.67%). The two biggest stocks of the FTSE ST Technology Index are Liongold Corp (+7.17%) and STATS ChipPAC (unchanged). The underperforming sector was the FTSE ST Basic Materials Index, which declined -1.91% with Midas Holdings’ and Geo Energy Resources’ share prices declining -2.06% and -1.30% respectively. The FTSE ST Industrials Index declined -0.50%, while the FTSE ST Health Care Index gained +0.61%.
• We peg near term support at 3,100 levels.
• Top picks are DBS (Accumulate, TP: $17.50). Singtel (Accumulate, TP: S$3.99) and Keppel Corp (Accumulate, TP: S$12.25). Deep value plays are Amara (Buy, TP: $0.74), Boustead (Buy, TP: $1.94) and Courts (Buy, TP: $1.03).

Thailand

• Thai stocks traded in a holding pattern in the morning trade on Thu before the market later turned lower by 0.84% as US debt ceiling and budget worries weighed on sentiment though the country’s export data beat forecasts. 
• The composite SET index is expected to remain stuck in a volatile trading range of 1410-1450 points with alternate bouts of buying and selling throughout the session today. Gains are likely to be driven by better-than-expected US labor market data, which sent US equities higher overnight and the end-of-quarter ritual of window dressing by institutional investors.
• Internal and external uncertainties remain as (i) Thai lawmakers will proceed with a vote on the third reading of the charter amendment bill on the senate-related clauses on Sep 28 though the Constitutional Court accepted two separate petitions filed against the charter change bill for consideration and (ii) clock ticks towards the US budget deadline on Oct 1: Failure to reach a budget deal could threaten a US federal government shutdown. These concerns could put a cap on the market’s upside potential and spark selling.
• In the near term, there remains room for trading opportunities with the 1400-point level to be used as a cut loss point. We also advise investors to book partial profits around 1460 points.
• Today we peg resistance for the SET index at 1440-1460 points and support at 1420-1400 points.

• The Jakarta Composite Index (JCI) pared gains on Thursday (26/09), after rising more than one percent at mid session, as the Rupiah weakened and as investors took profits ahead of the US economic growth data slated for release later in the day. The JCI slipped 0.874 points, or 0.02%, to 4,405.893. Five of the 9 major sectors climbed on Thursday, led by construction sector with 1.57%-gain, followed by miscellaneous industry sector with 1.27%-advance, and agriculture sector with 1.14%-rise. The LQ45 index fell 1.533 points, or 0.21%, to 735.503, with 18 of its 45 blue-chip constituents ended in red. In Asia, stock indexes finished in mixed tones on Thursday, on concerns over contentious budget negotiations in Washington and the direction of US monetary policy. 170 shares climbed and 80 shares declined Thursday on the Indonesia Stock Exchange, where regular market volume totaled at 3.72 billion shares worth IDR 4.52 trillion. Foreign investors’ transactions accumulated to a net sale of IDR 573.88 billion.
• Indonesian stocks will likely trade moderately higher today, after positive closes on US markets but a mixed start in Asia this morning. We expect the Jakarta Composite Index (JCI) to move higher, with support and resistance at 4,350 and 4,498, respectively.

• The market managed to chart a modest gain during the day, assisting the indices to close the day on a positive note. The benchmark ASPI gained a tiny 2.54 points to settle at 5,786.16 and the S&P SL20 managed to breathe within the green terrain, gaining 13.61 points or 0.42% to close at 3,219.09. As at the day’s close, the total market capitalization stood at LKR 2.38Tn, recording a year to date gain of 9.94%. The market PER & PBV stood at 16.46x and 2.20x respectively. Under the sectorial review, Bank Finance & Insurance (BFI) dominated the list providing LKR 489.82Mn and Land & Property (L&P) made a sectorial subscription of LKR 206.14Mn. During the day, a total of 87.15Mn shares changed hands, indicating a gain of 21.20% against the previous trading day. Foreign participants appeared to be bullish for the 6th consecutive trading day, recording a net foreign inflow of LKR 233.27Mn, while extending the year to date net foreign inflow to reach LKR 19.72Bn. Foreign buying for the day amounted to LKR 267.35Mn and foreign selling was recorded as LKR 34.07Mn. The local FOREX market for the day closed with, the USD selling at LKR 133.62/- and buying at LKR 130.27/-.

• The Australian share market on Thursday closed higher boosted by the big mining companies which benefited from a strengthening iron ore price. The benchmark S&P/ASX200 index was up 18.6 points, or 0.35 per cent, at 5,294.5points.
• Today (27/09/13), the Australian market looks set to open higher after Wall Street gained following some solid economic data. Wall Street's gains came on the heels of a report that confirmed US second-quarter growth at 2.5 per cent, while weekly jobless claims sank to 305,000.
• Domestically, no major economic or equities news is expected on Friday.

• HSI dropped 84 points or 0.36% to 23,125. CEI lost 57 points or 0.54% to 10,541. Trading volume remained low at HKD53.29 billion.
• Solar energy sector outperformed. Hanergy Solar (566.HK) and Comtec Solar (712.HK) gained 27.9% and 4% respectively. GCL-Poly Energy (3800.HK), the industry leader, also climbed 2.78%.
• The rumor that government will lower the electricity price sent electricity sector underperformed with Huadian Power (1071.HK), Datang Power (991.HK) and China Power (2380.HK) declined 3.3-3.7%.
• New World Dev (17.HK), one of the largest property developers in HK, posted FY13 results with core earnings of HKD6.3 billion, up 26.1% yoy but missed analysts’ estimates. We expect pressure on its share price today.
• Technically, HSI can’t retain at 10-MA, we expect a short-term correction but we are still positive in mid-term based on improving China economic data. The next resistance and support for HSI are 23,500 and 23,000 respectively.

Morning Note
Company Highlights

Yoma Strategic Holdings Ltd. and together with its subsidiaries, the “Group” wishes to inform shareholders that it has, through its 70% subsidiary, Chindwin Holdings Pte. Ltd. (“Chindwin Singapore”), established a new subsidiary (“Chindwin Myanmar”) for the purpose of its tourism business in Myanmar. Chindwin Myanmar has acquired 6 plots of land in Bagan from an unrelated third party to expand the tourism business of the Group. The Company and First Myanmar Investment Co., Ltd. (“FMI”) agrees to fund the acquisition by way of interest-free shareholders’ loans to Chindwin Singapore for on-lending to Chindwin Myanmar. FMI holds a 30% interest in Chindwin Singapore. The Company’s 70% shareholders’ loan amounts to US$4.34 million and FMI’s 30% shareholders’ loan amounts to US$1.86 million. (Closing Price: S$0.805, -)

SATS announced that it has through its subsidiaries, SATS Airport Services and SATS-Creuers Cruise Services (SATS-Creuers), entered into a share purchase agreement to acquire the entire issued share capital of Singapore Cruise Centre for S$110 million from Temasek. SATS-Creuers is a 60:40 joint venture formed by SATS Airport Services, a wholly-owned subsidiary of SATS, and Creuers del Port de Barcelona (Creuers), to manage and operate the Marina Bay Cruise Centre Singapore. (Closing Price: S$3.130, -0.6%)

Sembcorp Industries Ltd announced the successful close of the initial public offering (IPO) of its joint venture in Oman, Sembcorp Salalah Power & Water Company (Sembcorp Salalah). The company, which owns and operates the Salalah Independent Power and Water Plant (Salalah IWPP), is expected to commence trading of its shares on the Muscat Securities Market on or around October 10, 2013. Sembcorp Salalah’s offering of 33,410,019 existing ordinary shares, representing 35% of its issued share capital, was open for subscription from August 28 to September 26, 2013 in Oman. (Closing Price: S$5.280, +0.2%)

Sysma Holdings Limited announced that its wholly-owned subsidiary, Sysma Construction Pte. Ltd. has successfully secured a contract, worth approximately S$7.5 million for the erection of a two-storey good class bungalow at Jervois Hill. The Contract shall commence in October 2013 for a period of 18 months. (Closing Price: S$0.0285, -)

Source: PhillipCapital Research - 27 Sep 2013