KLCI: -0.15% to 1815.7
JCI: -0.60% to 4562.8                            SET: +0.43% to 1455.9
HSI: +0.18% to 22846                            HSCEI: +1.29% to 10390
Nifty: +1.96% to 6220.9                         ASX200: -0.48% to 5415.5
Nikkei: -0.49% to 14325                        S&P500: +0.56% to 1771.9
      
MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA

Retail sales in the U.S. outside of auto dealers climbed in September, indicating households were sustaining the economic expansion before the government shutdown shook confidence. The 0.4 percent gain in purchases excluding vehicles followed a 0.1 percent increase in August and matched the median forecast of economists surveyed by Bloomberg. Total sales dropped 0.1 percent, restrained by the biggest decrease at auto dealers since October 2012, as purchases early in the month were included in the August data.

Wholesale prices in the U.S. unexpectedly dropped in September as food costs retreated, an indication inflation remains tame. The 0.1 percent decrease in the producer price index followed a 0.3 percent gain the prior month. The median estimate in a Bloomberg survey of 80 economists called for a 0.2 percent advance. The so-called core measure, which strips out volatile food and fuel, increased 0.1 percent after being unchanged in August.

Home prices in 20 U.S. cities rose in August from a year ago by the most since February 2006 as stronger demand boosted values. The S&P/Case-Shiller index of property prices in 20 cities increased 12.8 percent from August 2012, more than forecast, after a 12.3 percent gain in the year ended in July, a report from the group showed today in New York. The median projection of 28 economists surveyed by Bloomberg called for a 12.5 percent advance.

India

Reserve Bank of India (RBI) raised the short-term lending (repo) rate by 0.25 percentage point to 7.75% as its continuous attempt to curb stubborn high inflation. The RBI left other rates unchanged, such as the cash reserve ratio (CRR) at 4% and mandatory holdings in government securities and other liquid assets as a solvency measure (SLR) at 23%.

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Regional Market Focus

Singapore

• The Straits Times Index (STI) ended 0.97 points higher or +0.03% to 3,208.82, taking the year-to-date performance to +1.32%.
• The FTSE ST Mid Cap Index gained +0.32% while the FTSE ST Small Cap Index declined -0.18%. The top active stocks were OCBC Bk (+0.29%), SingTel (+0.54%), DBS (+0.48), UOB (-0.10%) and Genting SP (+0.66%).
• The outperforming sectors today were represented by the FTSE ST Telecommunications Index (+0.48%). The two biggest stocks of the FTSE ST Telecommunications Index are SingTel (+0.54%) and Starhub (-0.22%). The underperforming sector was the FTSE ST Basic Materials Index, which declined -0.97% with Midas Holdings’ share price remaining unchanged and Geo Energy Resources’ share price declining -1.47%. The FTSE ST Consumer Goods Index declined -0.23% and the FTSE ST Technology Index declined -0.20%.
• We peg near term support at 3,000 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

• Thailand is poised to end the year with export growth of only 1.3% as a result of sluggish growth in the first eight months of 2013, according to the University of the Thai Chamber of Commerce (UTCC). However, exports in the final quarter of 2013 is projected to grow by 5.12% on improving economic conditions in trading partners but fourth-quarter growth may not be strong enough to put full-year growth on track to meet the 4% target. (Source: Post Today) 
• Thailand ranks 18th out of 189 countries for the ease of doing business, unchanged from last year, as measured by lower tax costs for companies, says the World Bank. (Sources: The Nation, Bangkok Post)
• The Bank of Thailand denied the news report that it agreed with the Ministry of Finance to use foreign reserves to invest in bonds and the government’s Bt2trn infrastructure scheme with no need to set up a sovereign wealth fund. (Source: Post Today)
• The Revenue Department is mulling more expenses to be deducted from taxable personal income to help ease high costs of living but tax deductions for investment in LTF/RMF may be cancelled. The department is also studying whether to scrap the tax on the repatriation of profits made by Thai holding companies from their foreign investments in tax-haven countries so long as the money is invested in businesses or operations in Thailand to be determined by the government. (Sources: Krungthep Turakij, Bangkok Post)
• The Peua Thai Party unanimously voted to allow its MPs to push ahead with blanket amnesty with the second reading of the amended amnesty bill set for Nov 2. Meanwhile the opposition Democrat Party said it will organize a mass rally at Samsen railway station on Oct 31 to protest against the bill. (Source: Daily News)

Indonesia

• Indonesian stocks declined Tuesday (29/10), as investors grew cautious ahead of US Federal Reserve policy decision scheduled for Wednesday (30/10). The Jakarta Composite Index (JCI) lost 27.768 points, or 0.60%, to end at 4,562.770. Seven of its 9 main industry groups ended in red, led by finance sector with 1.17%-drop, followed by consumer goods sector with 1.10%-decline, and property, construction and real estate sector with 0.98%-plunge. 29 blue-chip shares fell, bringing the LQ45 index a 6.731 points or 0.87%-drop, to 766.088. In Asia, stock indexes mostly finished with negative notes Tuesday, with mixed earnings driving sentiments and investors taking cautious stance before the US Federal Reserve announces its policy meeting results on a day later. 162 shares declined, and 83 shares climbed Tuesday on the Indonesia Stock Exchange, where 3.09 billion stocks worth IDR 4.07 trillion changed hands on the regular board. Foreign investors’ transactions accumulated to a net sale of IDR 255.03 billion.
• The Jakarta Composite Index (JCI) will likely turn higher today, following upbeat leads from US markets overnight and in Asia this morning. We estimate the composite index to move higher, with support and resistance at 4,517 and 4,616, respectively.

Sri Lanka

• Witnessing yet another day of loses, The Colombo bourse dropped further resulting in the indices to settle within the red terrain. The benchmark ASPI closed nearly 7 points above the 5,900 level, and the S&P SL20 closed at 3,260.62 losing a minute 1.14 points or 0.03%. With regard to the movement in share prices, 78 companied gained whereas 99 companies witnessed drops in shares price. As at the daily closure the total market capitalization stood at LKR 2.46Tn, recording an YTD gain of 13.32%. The market PER and PBV were 15.79x and 2.08x respectively. The aggregate turnover for the day amounted to record LKR 528.71Mn, indicating a gain of 41.92% against its previously recorded. The total number of shares traded amounted to 47.83Mn, resulting in a rise of 24.14% as against its previously recorded. Under the sectorial round-up, Bank Finance & Insurance (BFI) sector stood on top providing LKR 311.24Mn accounting to nearly 60.00% of the daily aggregated turnover and Diversified Holdings (DIV) sector made a contribution of LKR 85.81Mn. Foreign participants appeared to be bearish during the day for the second consecutive trading day, recording a net foreign outflow of LKR 201.90Mn, resulting in the year to date net foreign inflow to fall to LKR 22.53Bn.  Foreign buying for the day amounted to LKR 49.81Mn and selling was recorded as LKR 251.71Mn. The local FOREX markets for the day closed with the USD selling at LKR 132.57/- and buying at LKR 129.31/-.

Australia

• The Australian share market on Tuesday fell as investors took profits after the recent record highs reached by three of the big four banks. The benchmark S&P/ASX200 index was down 25.9 points, or 0.48 per cent, to 5,415.5 points.
• Today (30/10/13), the Australian market looks set to open higher following gains on Wall Street as traders reacted to company earnings updates and US economic data ahead of the Federal Reserve's policy meeting. A heavy schedule of US economic indicators showed a 0.1 per cent fall in September retail sales, a 0.1 per cent drop in producer prices, indicating weak inflation, and a 12.8 per cent year-on-year rise in home prices in August, even as many cities saw smaller gains compared with July.
• Locally, no major economic news is expected on Wednesday.
• In equities news, OceanaGold is expected to release third quarter results while Crown, JB Hi-Fi, Insurance Australia Group, Atlas Iron, Flight Centre and Transpacific Industries all have annual general meetings scheduled.

Hong Kong

• HSI swung between gain and loss yesterday and closed at 22,846 (+39 points or 0.18%). CEI climbed 132 points or 1.29% to 10,390. Trading volume increased to HKD59.618 billion.
• PBOC conducted reverse repo again and China banking sector led the index up, HSI opened high at 22,842 (+35 points).
• Chinese banks out-performed with ABC (1288.HK) and ICBC (1398.HK) up 3.2% and 2.7% respectively.
• Software and computer services sector was under pressure obviously. Netdragon (777.HK) and Kingsoft (3888.HK) slumped 7.6% and 10% respectively.
• Macau gambling sector also under-performed with Sands China Ltd (1928.HK) and Galaxy Ent (27.HK) down 3.2% and 3.3% respectively. The share prices broke their long-term uptrend obviously, we suggest investors to remain prudent on this sector.
• Anhui Conch (914.HK) surged 3.9% after 3Q13 results with net profit in the third quarter beating market expectation.
• Technically, HSI returned to above 50-MA at 22,773, below here would provide a bearish continuation. The next resistance and support for HSI are 23,000 and 22,773 respectively.

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Morning Note
Company Highlights

Yanlord Land Group announced today that it has successfully acquired a 386,000 sqm GFA prime integrated development site in the Nanjing Eco-Island for RMB2.877 billion or at an average purchase price of approximately RMB7,447 per sqm in a public land auction. Well connected via planned key thoroughfares running through the island as well as the adjacent metro station of the No. 10 metro line, the site will consist of approximately 274,000 sqm GFA of residential development, 59,200 sqm GFA of commercial and office space as well as 53,500 sqm GFA of research and development facilities. (Closing Price: S$1.230, +0.41%)