KLCI: +0.55% to 1785.8
JCI: +0.74% to 4519.9                           SET: +0.40% to 1457.8
HSI: +1.16% to 23218                            HSCEI: +1.15% to 10580
Nifty: +1.25% to 6096.2                         ASX200: +1.63% to 5230.9
Nikkei: +1.48% to 14404                        S&P500: +0.63% to 1703.2
      
MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA: Consumer sentiment in the U.S. fell in October to a nine-month low as the government’s partial shutdown and the debt-ceiling debate caused outlooks to sour. The consumer sentiment index of decreased to 75.2 this month from 77.5 in September. Economists projected a drop to 75.3, according to the median estimate.

Eurozone: German inflation rose 1.4% in September, following 1.5% growth registered the previous month. This result is in line with analysts' forecasts. On an annual basis German CPI remained unchanged for the second running month in September, as expected.
Spain's harmonized CPI plummeted to +0.5% from +1.6%, with a monthly rate of +0.8% (vs +0.2% of August).

India’s industrial output growth expanded 0.6% in August from a year earlier, weighed by continued weakness in the manufacturing (down by 0.1% y/y) and mining (down by 0.2% y/y) sectors. The notable weaker pace aggravates government's concern while struggling to reverse a slowdown in the nation.

China’s trade surplus narrowed to $15.2 billion in September compared to last month’s $28.6 billion. The diminishing trade surplus was due to an unexpected drop in exports, as national holiday season fell in September alongside a stronger yuan.
 

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Regional Market Focus

Singapore

• The benchmark STI closed marginally higher at 3,179.71 (+0.31%). The 3.0bn shares traded were worth S$1.0bn in value.
• The FTSE ST Mid Cap Index gained +0.16% while the FTSE ST Small Cap Index declined -0.10%. The top active stocks were SingTel (-0.53%), Keppel Corp (+0.74%), DBS (+0.61%), OCBC Bank (-0.10%) and GLP (+2.08%).
• The STI is expected to consolidate at current levels. Investors continue to be concerned over the US government shutdown, and debt ceiling debate.
• 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

• Thai stocks traded in the green in volatile trading last Fri after US House of Representatives Speaker John Boehner proposed a six-month debt limit rise without strings attached though President Barack Obama had not yet accepted the deal. 
• Today the composite SET index looks set to trade to the downside after weekend negotiations between Democrats and Republicans to avert a US debt default ended with no agreement on debt ceiling and budget while there are only three days left before Oct 17 deadline. Expectations however remain that a last-minute compromise will be reached as long as negotiations continue. Elsewhere, China’s exports fell short of expectations in Sep 2013, a disappointing break to a recent run of indicators that had signaled its economy gaining strength. China’s weak export numbers might fuel worries about the global economy but also raised optimism about more economic stimulus at the same time.
• In Thailand, all eyes will be on political movements. Overall we see a choppy downside risk for the SET index today. For short-term trading ideas, we advise investors to look for earnings plays on bank stocks with a ‘buy on dips’ strategy.
• Today we peg resistance for the SET index at 1470-1480 points and support at 1440-1450 points.

Indonesia

• The Indonesian market is closed for holidays.

Sri Lanka

• The last trading day of the week ended on a negative note where the bourse was unable to continue its bullish run over the week. The market lost 9.95 points (-0.17%) to closed the day at 5,947.42 and the S&P SL20 ended at 3,283.62 dropping by 3.29 points or 0.10%. A series of off-market deals totaling up to LKR 739.71Mn limited the on-board activity to LKR 281.18Mn, whilst accounting a share of 72.46% of the daily aggregated turnover which amounted to LKR 1.02Bn; the turnover noted a gain of 77.52% against the previous trading day. During the day a total of 59.01Mn shares changed hands charting in a drop of 15.70% against its previously recorded. Under the sectorial round-up, Construction & Engineering (C&E) sector stood on top providing LKR 465.98Mn accounting a share of 45.64% of the day’s total turnover and Diversified Holdings (DIV) sector secured the second place contributing LKR 166.46Mn. With regard to the movement in share prices, price losers slammed the price gainers by 110:68.  Foreign participants appeared to be bullish during the day, recording a net foreign inflow of LKR 228.66Mn.

Australia

• The Australian share market on Friday posted its largest one-day gain in more than three months due to signs on the day that the US would avoid a debt default by raising its debt ceiling. The benchmark S&P/ASX200 index added 83.8 points, or 1.63 per cent, to 5,230.9.
• Today (14/10/13), the Australian market looks set to open lower despite Wall Street closing higher on Friday as uncertainty rises over whether or not Washington can come to a deal to avert a debt default.
• In economic news on Monday, the Australian Bureau of Statistics (ABS) releases housing finance figures for August.
• No major equities news is expected.

Hong Kong

• The Hong Kong market is closed for holidays.

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Morning Note
Company Highlights

Del Monte Pacific Limited (DMPL) announced today that it has entered into a definitive agreement to acquire, through a new subsidiary, the consumer food business of Del Monte Foods (DMF), a privately-owned U.S. corporation, for US$1.675 billion (subject to certain adjustments at closing). Under the terms of the purchase agreement, DMPL will purchase the brands and certain assets, and assume certain liabilities related to DMF’s consumer food business in the U.S., as well as equity interests in certain South American subsidiaries from DMF. This transaction offers DMPL greater access to a well-established, attractive and profitable branded consumer food business in the world’s biggest market. The transaction is valued at US$1.675 billion and will be financed through a combination of approximately US$745 million of equity in the Company’s new acquisition subsidiary, as well as long-term debt financing of approximately US$930 million that have been committed by a syndicate of bank lenders. As part of the equity financing, the Company plans to issue common and preferred shares in the market. (Closing price: S$0.905, +11.043%)

IEV Holdings Limited, a provider of integrated engineering solutions and clean energy solutions, have been awarded three pile grouting and two free span correction contracts by three engineering, procurement, installation and commissioning contractors. The work program for the pile grouting service covers seven offshore platforms in Malaysia and Indonesia, while the free span correction service will be performed on four pipelines in Indonesia. The Contracts, with aggregate value of approximately USD2.2 million are expected to be completed in 4Q2013. (Closing price: S$0.36, -1.37%)

China Yuanbang Property Holdings Limited wishes to announce that its subsidiary, Guangdong Yuanbang Real Estate Development Co. Limited has incorporated a wholly-owned subsidiary known as Guangzhou Guangfu Property Development Co. Limited (GGPD) in the People’s Republic of China. The principal activity of GGPD is that of residential property development. The registered and paid-up capital of GGPD is RMB10 million. The investment in GGPD was funded through internal resources and is not expected to have any material impact on the net tangible assets and earnings per share of the Company for the financial year ending 30 June 2014. (Closing price: S$0.21, +5.0%)

IPC Corporation Ltd would like to announce that the Company has purchased a business hotel in Osaka City, in Japan. The Osaka Hotel, a 13-storey building, has 302 guest rooms, located in the center of the business and commercial district and convenient for both business travellers and tourists. The purchase is partially funded by bank borrowings. The Osaka Hotel shall be leased to Nest Hotel Japan Corporation and renamed as “nest HOTEL osaka shinsaibashi” in February 2014. “nest” is the Company’s brand. The purchase is in line with the Company’s strategy to acquire more income producing assets with the view of having a sustainable income stream. Including the Osaka Hotel, IPC has a portfolio of 9 business hotels in Japan. (Closing price: S$0.155, 0%)

Medi-Flex Limited (Company) and Top Glove Sdn. Bhd.(Offeror) wish to jointly announce a formal proposal to seek the voluntary delisting of the Company from the Catalist of the Singapore Exchange Securities Trading Limited. Oversea-Chinese Banking Corporation Limited, as the Financial Adviser to the Offeror, will make for and on behalf of the Offeror, a cash offer to purchase all the issued ordinary shares (excluding treasury shares) in the capital of the Company, other than those Shares already held by the Offeror, its related corporations or their respective nominees, on the terms and subject to the conditions set out in the Joint Announcement and the Exit Offer Letter. The Directors have reviewed the Delisting Proposal and have resolved to (i) apply to the SGX-ST for the Delisting; and (ii) convene an extraordinary general meeting of the Company to seek the approval of the shareholders of the Company for the Delisting. The Offeror will make the Exit Offer for each Medi-Flex share at S$0.15 in cash. (Trading Halt)

RH Petrogas Limited wishes to announce that the SGX-ST has on 11 October 2013 granted its in-principle approval for the listing and quotation of the proposed placement Shares of up to 116,000,000 new ordinary shares in the capital of RH Petrogas Limited at a placement price of $0.63 per share. (Closing price: S$0.855, -7.065%)

Cordlife Group Limited wishes to announce that the Company has on 11 October 2013 received in-principle approval from the SGX-ST for the listing of, and dealing in and quotation on the Main Board of the SGX-ST, 26,838,000 Private Placement Shares which are to be issued at the Issue Price of S$1.25 per Placement Share to raise gross proceeds of up to $33,547,500. (Closing price: S$1.21, -1.626%)