KLCI: +0.37% to 1791.4
JCI: -0.61% to 4492.3                          SET: -0.58% to 1464.4
HSI: -0.46% to 23228                          HSCEI: -0.39% to 10629
Nifty: -0.39% to 6089                           ASX200: +0.07% to 5262.9
Nikkei: +0.18% to 14467                    S&P500: +1.38% to 1721.5
      
MARKET OUTLOOK:
By Joshua Tan, Head of Research

We have a deal!

House Speaker John Boehner concedes “We fought the good fight, we just didn’t win”, as the House prepares to vote on a bipartisan deal brokered in the Senate which funds the govt at Republican backed levels through 15th Jan 2014 and suspends the debt limit till 7th Feb 2014. Boehner said in a statement that Republicans won’t block the Senate compromise – which also sees Republicans achieve none of their goals of defunding Obamacare and attaching conditions to raising the debt ceiling.

It’s back to same ol’ same ol’ – the bull market is back on – OW stocks, NW/UW bonds, UW Gold, OW Commodities.

Macro Data

Bank of Thailand's Monetary Policy Committee (MPC) held its benchmark interest rate steady at 2.5% in October, the same stance since May. The central bank refrained from monetary policy easing despite that the economy has slumped into a technical recession.

USA: The National Association of Home Builders/Wells Fargo index of builder sentiment decreased to 55 this month from a revised 57 in September that was weaker than initially estimated, the Washington-based group reported today. The median forecast in a Bloomberg survey called for a decline to 57. Readings above 50 mean more builders view conditions as good than poor.

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Regional Market Focus

Singapore

• The benchmark STI closed higher at 3,174.03 (+0.28%). The 2.5bn shares traded were worth S$1.1bn in value.
• The FTSE ST Mid Cap Index gained +0.07% while the FTSE ST Small Cap Index declined -0.28%. The top active stocks were SingTel (-1.08%), DBS (+0.67%), OCBC Bk (+1.07%), UOB (+0.73%) and Keppel Corp (-0.37%).
• The STI is expected to rally today, as the US Senate reached an agreement on raising the debt ceiling, and put an end to the US Government shutdown. Focus will once again be on economic indicators, with positive signs expected to drive the STI upwards.   
• 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 choppy in range before the SET index finished the session down 0.58% on Wed on concerns about the looming US debt ceiling deadline after a lack of progress in debt talks.   
• Today Thai stocks look poised for a rebound on bullish external sentiment after the US Senate passed the measure on a 81-18 vote on Wed to end the partial US federal government shutdown and raise the debt ceiling. The US House of Representatives also planned to vote on the measure later in the day before the bill would be sent to US President Barack Obama to sign into law before deadline at 1100 hrs Thailand time.
• The deal offers only a temporary fix to fund the government until Jan 15, 2014 and raise the debt ceiling until Feb 7, 2014 while the US Federal Reserve would later assess the impact on the US economy and its QE policy. For short-term strategy, we advise investors to gradually book partial profits around 1500 +/- on recently outperforming counters. Today we expect a trading range of 1450-1490 points for the SET index.
• Resistance for the SET index is seen at 1480-1490 points and support at 1450-1460 points today.

Indonesia

• Indonesian stocks declined Wednesday (16/10), as investors returning from long weekend holiday without breakthrough on fiscal deadlock in Washington. The Jakarta Composite Index (JCI) fell 27.651 points, or 0.61%, to 4,492.261. All but one major stock sector declined on Wednesday, with consumer goods sector dropped 1.62%, infrastructure sector lost 1.36%, and mining sector shed 0.59%. Miscellaneous industry sector, which largely comprises automotive and component makers, stood out with 1.03%-gain. The LQ45 index slid 6.033 points, or 0.79%, at 757.281. Decliners outran gainers 156 to 87 Wednesday on the Indonesia Stock Exchange, where volume on the regular market totaled at 2.53 billion shares worth IDR 3.91 trillion. Foreign investors posted net sale of IDR 300.05 billion.
• The Jakarta Composite Index (JCI) will likely turn higher today, after US debt ceiling has been raised by an agreement in the US senate. We expect the JCI to advance today, with support and resistance at 4,454 and 4,552, respectively.

Sri Lanka

• 16 Oct 2013: Market close on Hadji Festival.

Australia

• The Australian share market on Wednesday recovered from opening losses to close slightly higher on cautious optimism Congress leaders were heading to an agreement on a temporary deal to raise the US debt ceiling. The benchmark S&P/ASX200 index gained 3.8 points, or 0.07 per cent, to 5,262.9.
• Today, the Australian market looks set to open higher after US Senate leaders reached a deal for a temporary budget and to extend the debt ceiling, ending the government shutdown. 
• In economic news on Thursday, the Australian Bureau of Statistics releases September international merchandise imports figures, while the National Australia Bank's business survey for the September quarter is due out.
• In equities news, Woodside Petroleum is expected to post third quarter reports, Fortescue Metals Group is due to release its first quarter production report, while Newcrest and Atlas Iron are slated to release September quarter reports. Ten Network Holdings is expected to release full year results while Ansell has an annual general meeting scheduled.

Hong Kong

• HK stocks closed lower on Wednesday following the trend of the US equity markets on little progress from the US to break a budget deadlock, and that Fitch put US's "AAA" rating on negative watch.
• The Hang Seng Index ended down 108 points to 23,228. The HSI traded between 23,128 and 23,350 during the day. The H-share index also fell 41 points to 10,629. Turnover reduced to HK$54.2bn from HK$57.7bn on Tuesday.
• Among the 50 blue chips, seven rose and 40 fell, with three stocks remaining steady. CR Power (00836) gained 1.2% to HK$19.58, while China Merchants (00144) fell 2.7% to HK$28.8, making themselves the top blue-chip winner and loser.
• Market heavyweights were mixed. China Mobile (00941) edged up 0.8% to HK$84.25. HSBC (00005) inched down 0.3% to HK$84.9.
• Elsewhere, the HK government granted two new free-to-air TV licences. The loser HKTV (01137) plunged 33.9% to HK$2.03, while the winners I-cable (01097) and PCCW (00008) soared 155% and 4.6% to HK$1.2 and HK$3.64. TVB (00511) inched up 0.3% to HK$48.8.
• Prince Frog (01259) plunged 25.7% to HK$4.66 before suspension after short-selling research house Glaucus initiated coverage of the company with "strong sell". It said the company is worth HK$0.74 to HK$0.98 per share. (Source: ETNet)

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Morning Note
Company Highlights

Chasen Holdings Limited announced that it had secured S$7.1 million worth of new contracts. These contracts also mark a new milestone for the Group’s Relocation segment by being the first relocation project from the Middle East to Singapore and this paves the way for more projects in new countries. In addition to the S$9.1 million of new contracts won that was announced earlier on 2 September 2013, today’s S$7.1 million from the Relocation and Technical & Engineering business segments will bring the Group’s total value of contracts announced to date to S$16.2 million. However, Chasen price has decreased substantially today. CEO Mr Low Weng Fatt has responded to SGX query that the Board is unaware of any possible explanation for the trading activity. (Closing price: S$0.159, -53.913%)

Singapore Technologies Engineering Ltd today announced that its aerospace arm, Singapore Technologies Aerospace Ltd (ST Aerospace) has secured new orders worth about $600m in the third quarter of 2013. Included in the 3Q2013 contracts is an order of 17 passenger-to-freighter (PTF) conversions received from an international air freight carrier, bringing to 119 the total number of aircraft contracted for the Boeing 757-200 PTF conversion programme. (Closing price: S$4.20, +0.719%)

Midas Holdings Limited is pleased to announce that its subsidiary, Jilin Midas Aluminium Industries Co., Ltd has secured €17.7 million worth of international contracts for two major train projects in Europe and RMB75.9 million worth of metro orders for the PRC market. The two international contracts will see Midas supply aluminium alloy extrusion profiles and certain fabricated parts to two major train projects in Europe. The PRC contracts were awarded to supply aluminium alloy extrusion profiles and certain fabricated parts to major PRC metro projects. Midas expects contracts to contribute positively to the Group’s financial performance from 2013 to 2017. (Closing price: S$0.45, 0%)

China Gaoxian Fibre Fabric Holdings Ltd has received the formal Notice of Decision to Impose Fine from the Financial Services Commission of Korea on 14 October 2013 imposing a fine of KRW 2 billion (approximately S$2,326,000) on the Company The basis for the Fine include (1) the Company exaggerated its cash and cash equivalents as at end September 2010 in its securities registration statement submitted to the FSS as the expenditure for the construction and development of the polyester polymer production facility and the office building in Huzhou City, Zhejiang Province, PRC were not included; (2) the Company misrepresented its investment risk factors in the Securities Registration Statement; (3) the Company violated its reporting and disclosure obligations by misrepresenting material information in its Securities Registration Statement, such as its failure to disclose material terms, estimated costs and means of financing for the Huaxiang Project. The Company is in the process of seeking legal advice on the Notice. (Closing price: S$0.046, -8%)

Jubilee Industries Holdings Ltd announced today that it plans to acquire a 60%-stake in a development project in Medini Iskandar in a proposed reverse takeover which includes a profit guarantee from its vendor of RM180 million (approximately S$72 million). Jubilee said that it had entered into a conditional non-binding Memorandum of Understanding with Jewelstone Properties Ltd to acquire its wholly-owned subsidiary, Tenderside Ventures Limited, for a consideration of RM150 million (or S$60 million based on the agreed average exchange rate of S$1 to RM2.50 over the 12 months prior to the MOU). The Development Project “Viridea @ Medini Lakeside”, a mixed development comprising serviced apartments, retail units and SOHO apartments, is a short drive from the Second Link connecting Johor to Singapore, which offers special incentives for investors. The Project is expected to generate profits of RM300 million (approximately S$120 million) of which RM180 million (S$72 million) of such profits shall be declared in favour of Jubilee according to the MOU. (Trading Halt)

CNA Group Ltd. announced that it won approximately S$8.5 million worth of new projects in Asia. The new project wins include:   (1) Integrated building management system for Tanjong Pagar Centre – Singapore’s tallest residences in a mixed development;   (2) upgrading SCADA systems at Jurong Water Reclamation Plant – inclusive of a 5-year maintenance; and (3) Second airport project win in Laos. The Singapore and Laos projects are expected to positively impact the Group’s financial performance for the financial years ending 31 December 2013 and 31 December 2014. These projects will increase the Group’s orderbook of S$63.6 million as at 30 June 2013 to S$100.7 million, which is also inclusive of the Vietnam Airport Project and Thailand Property Development (Sriracha) EPC Project announced on 2 September 2013 and on 9 October 2013 respectively. (Closing price: S$0.132, -3.65%)

Global Logistic Properties Limited has recently signed five new lease agreements (1) 15,000 sqm leased to Grainger, a leading global retailer of industrial products with a growing e-commerce presence in China; (2) 12,000 sqm leased to one of the world’s largest health and beauty retail chains and (3) 28,000 sqm leased to three leading third-party logistics providers including Haier Logistics, totalling 55,000 sqm (592,000 sq ft)) across China. (Closing price: S$2.98, +1.361%)