KLCI: -0.07% to 1817.6
JCI: -0.30% to 4580.9                            SET: -0.78% to 1454.9
HSI: -0.60% to 22698                             HSCEI: -1.40% to 10177
Nifty: -0.32% to 6144.9                          ASX200: +0.25% to 5386.4
Nikkei: -2.75% to 14088                         S&P500: +0.44% to 1759.8
      
MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA: Treasury 10-year yields touched the lowest level since July as additional reports showed consumer confidence fell for a third month and durable-goods orders excluding transportation unexpectedly declined, suggesting the economy took a step back amid the fiscal gridlock that partially shut down the federal government. The U.S. will sell $96 billion of notes next week and Fed policy makers meet Oct. 29-30.

- The value of unsold goods (wholesale inventories) increased 0.5 percent after a revised 0.2 percent gain in July that was larger than previously reported. The median forecast in a Bloomberg survey of economists called for a 0.3 percent increase. Sales jumped 0.6 percent in August after no change the month before.
- The consumer sentiment index decreased to 73.2, the weakest this year, from 77.5 in September. The median estimate in a Bloomberg survey called for a decline to 75 compared with a preliminary reading of 75.2.
- Bookings for non-military capital goods excluding aircraft, which reflect demand for productivity-enhancing equipment like machinery and electrical gear, decreased 1.1 percent last month, the second drop in three months.

Japan: Prices excluding energy and fresh food were unchanged from a year earlier, after sliding every month since December 2008, the statistics bureau said today in Tokyo. That matched the median forecast of 19 economists in a Bloomberg News survey.
 
Singapore’s industrial production expanded with an annual rate of 9.3% in September, from a revised 4.0% in the preceding month, according to Statistic Singapore.  The growth exceeded a market forecast of a 5.7% increase, boosted mainly by improving export demand in the electronics cluster. Comparing with the same month a year ago, across sector, electronics output increased 20%, transport engineering output rose 14.4% (supported by the marine and offshore engineering segment), while the chemicals cluster contributed 5.8% growth.
 
Thailand: In September, the value of exports contracted 7.09% to US$19.3 billion, while imports were down 5.23% to $18.83 billion, resulting in a trade surplus of $473.2 million, said the Permanent Secretary for Commerce Srirat Ratthapana.
 
Malaysia's consumer price index rose 2.6% in September, its highest since January 2012, reflecting higher petrol pump prices after the government cut fuel subsidies during the month, data from the Statistics Department showed.

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Regional Market Focus

Singapore

• The Straits Times Index (STI) ended 12.71 points lower or -0.39% to 3,205.24. The 2.1bn shares traded were worth S$950 mil in value.
• The FTSE ST Mid Cap Index declined -0.02% while the FTSE ST Small Cap Index declined -0.21%. The top active stocks were SingTel (-1.32%), OCBC Bk (-0.48%), Capitaland (-0.95%), Golden Agri-Resources (+1.84%) and Noble Grp (-1.87%).
• 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$12.07). Deep Value Plays are Amara (Buy, TP: S$0.74), Boustead (Buy, TP: S$1.94) and Courts (Buy, TP: S$1.03).

Thailand

• Thai stocks fell 0.78% last Fri on concerns that the liquidity fears in China might have a domino effect on the Thai economy and as data showed Thai exports came in worse than expected in Sep 2013, down 7.09% y-y.
• In our view, there is scope for Thai stocks to see some limited rebound today on expectations that the US Federal Reserve’s Federal Open Market Committee (FOMC), which will meet on Oct 29-30, 2013, may delay QE tapering after the Thomson Reuters/University of Michigan’s final reading on US consumer sentiment dropped in Oct 2013 to its lowest level in 10 months and the 16-day government shutdown could cost the US economy as much as US$24bn. If the US central bank scales back its monthly bond purchases, it may possibly derail US economic recovery.
• Even though domestic political pressure remains against the backdrop of ongoing protests against the blanket amnesty bill, we believe political temperature may not rise to its boiling point for the meantime. Overall we think Thai stocks may likely follow overseas markets higher today but the room for upside appears more limited. For short-term strategy, we advise investors to trade earnings plays in a range of 1440-1475 points.
• Today we peg resistance for the SET index at 1465-1475 points and support at 1450-1440 points.

Indonesia

• Most Indonesian stocks ended lower on Friday (25/10), with mixed earnings reports from domestic and regional Asia companies set negative tones across the board. The Jakarta Composite Index (JCI) shed 13.999 points, or 0.30%, to close at 4,580.846. Four major stock sectors ended in green, compared to five that finished in red. Infrastructure sector lost the most, with 1.99%-drop, followed by basic industry sector with 1.02%-decline, and agriculture sector with 0.73%-decrease. For the week, the JCI rose 0.75%. LQ45 - the index tracking Indonesia’s blue-chip stocks - slid 2.892 points, or 0.37%, at 771.773. From the corporate front, Bank Jabar Banten (BJBR) - a listed provincial development bank - posted an almost 16% rise in earnings in the first nine months this year thanks to rising loans. BJBR booked IDR 1.1 trillion (USD 98 million) in net income in the January-September period, up from IDR 952 billion in the corresponding period last year. Shares of BJBR gained 1.09% on Friday (25/10). 127 shares declined, and 108 shares rose Friday on the Indonesia Stock Exchange, where trade volume on the regular market was 3.69 billion shares worth IDR 5.07 trillion. Foreign investors posted net sale of IDR 141.07 billion.
• The Jakarta Composite Index (JCI) will likely advance today, as sentiments in Asia improved today after higher closes on US markets on Friday (25/10). We expect the JCI to move higher, with support and resistance at 4,547 and 4,621, respectively.

Sri Lanka

• The last trading day of the week ended on a positive note, resulting in the indices to witness its second positive closure for the week. The market gained 12.35 points (0.21%) to close the day at 5,948.75 and the S&P SL20 ended at 3,280.48 gathering 16.72 points or 0.51%. As at the daily closure the total market capitalization stood at LKR 2.47Tn extending the year to date gain to 14.13%. The market PER & PBV stood at 15.97x & 2.15x respectively. A series of off-market deals totaling up to LKR 1,063.50Mn outpaced the on-board activity which amounted to LKR 417.12Mn, whilst accounting a share of 71.83% of the daily aggregated turnover which amounted to LKR 1,480.62Mn; the turnover noted a momentous gain of 186.49% against the previous trading day. During the day a total of 71.85Mn shares changed hands charting a gain of 76.75% against its previously recorded. Under the sectorial round-up, Bank Finance & Insurance (BFI) sector stood on top providing LKR 1,252.36Mn accounting a share of 84.58% of the day’s total turnover and Diversified Holdings (DIV) sector secured the second place contributing LKR 66.98Mn. With regard to the movement in share prices, price losers outpaced the price gainers by 91:85. Foreign participants appeared to be bullish during the day for the 5th consecutive trading day, resulting in a net foreign inflow of LKR 11.27Mn; foreign buying for the day amounted to LKR 47.71Mn and selling amounted to LKR 36.44Mn.  The year to date net foreign inflow currently stands at LKR 22.82Bn.

Australia

• The Australian share market on Friday defied falls on other Asian markets to end the week with a gain. The benchmark S&P/ASX200 index was up 13.4 points, or 0.25 per cent, at 5,386.3 points.
• Today (28/10/13), the Australian market looks set to open higher following gains on Wall street driven by better-than-expected earnings from Amazon and Microsoft and solid results from Procter & Gamble and UPS.
• No major economic news is expected on Monday. In equities news, GPT Group is expected to give a third quarter report and strategy update, while Bendigo and Adelaide Bank has its annual general meeting scheduled.

Hong Kong

• HSI lost 137 points or 0.6% to 22,698. CEI dropped 144 points or 1.4% to 10,177. Trading volume was HKD62.546 million.
• Led by the weak China banking sector and oil stocks, HSI failed to retain at 50-MA of 22,761 level. For the whole week, HSI declined 641 points or 2.7%. CEI lost 4.4%.
• China coal sector under-performed before the 3Q13 results. Yanzhou Coal (1171.HK) and China Coal (1898.HK) declined 2.8% and 2.1% respectively.
• Greatwall Motor (2333.HK) further dropped 7% after 3Q13 results with declined gross margin.
• L’ OCCITANE (973.HK) dropped 6.2% due to negative profit alert since listed.
• Technically, HSI failed to retain at 50-MA, sending a negative signal. The next resistance and support for HSI are 23,000 and 22,500 respectively.

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Morning Note
Company Highlights

Lum Chang is pleased to announce that it has been awarded the tender for the construction of The Glades, a condominium project by Sherwood Development. The contract sum is valued at SGD 178.6 million. This latest award brings the total outstanding value of construction projects still in progress to S$566.4 million. (Closing Price: S$0.350, 0%)

Tiong Woon wishes to announce that the Group intends to redevelop its premises at No. 15 Pandan Crescent, Singapore 128470 (“Premises”) to increase ultilisation of the Premises. The Group anticipates that the Group will need more space to accommodate its increased operational needs and to cater for future expansion of the Group’s business. (Closing Price: S$0.350, +1.45%)

Sheng Siong Group has entered into various sale and purchase agreements dated 25 October 2013 with CEL–Yishun (Commercial) Pte Ltd and CEL-Yishun (Residential) Pte Ltd of the second part, pursuant to which Sheng Siong Group has agreed to purchase 6 commercial properties at 18 Yishun Avenue 9, Singapore for an aggregate consideration of S$54.9 million. The Proposed Acquisitions will enable the Group to open an additional store in Yishun. (Closing Price: S$0.630, +0.80%)

ASL Marine Holdings wishes to announce that a 36% associate of the Company, based in Indonesia, has met with senior officers of the Indonesian Stock Exchange to discuss plans to undertake an initial public offering on the Indonesian Stock Exchange. Investors should note that a listing on the Indonesian Stock Exchange involves significantly more work than a meeting with senior officials. Accordingly, investor should exercise care when trading in the shares of the Company. (Closing Price: S$0.665, 0%)