KLCI: -0.24% to 1803.1
JCI: +0.60% to 4449.8                          SET: +1.38% to 1434.9
HSI: -0.01% to 23036                           HSCEI: -0.71% to 10561
Nifty: -0.61% to 6215.2                        ASX200: +0.03% to 5433.8
Nikkei: +0.79% to 14337                     S&P500: +0.43% to 1770.5
      
MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

Singapore:

Singapore’s factory output expanded for an eighth consecutive month as PMI inched up to 51.2 in October from September’s 50.5. The expansion is mainly contributed by stronger orders and higher production by factories, which are expected to support production and imports in the coming months.

Indonesia:
Economic growth slipped into its slowest pace in nearly four years in the past quarter as GDP grew at 5.62 percent in July-September period year-on-year, down from 5.81 percent in April-June period. On quarter basis, the Southeast Asia's largest economy expanded 2.96 percent, compared with a 2.61 percent growth in the previous quarter.

The Central Statistics Agency (BPS) says that unemployment increased to 7.39 million Indonesian, or 6.25 percent in August, compared to 7.17 million in February.

USA:
Prices for single-family homes climbed in 88 percent of U.S. cities in the third quarter as buyers competed for limited inventories that included fewer discounted foreclosures.The median transaction price rose from a year earlier in 144 of 163 metropolitan areas measured. A third of areas had double-digit increases.

Eurozone:
German factory orders increased more than estimated in September in a sign that Europe’s largest economy is benefiting from a recovery in the euro area and rising domestic investment. Orders, adjusted for seasonal swings and inflation, jumped 3.3 percent from August, when they fell 0.3 percent. Economists forecast a gain of 0.5 percent. Orders advanced 7.9 percent from a year ago, when adjusted for the number of working days.

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Regional Market Focus

Singapore

• The benchmark STI closed flat at 3.205.29 (-0.01%). The 2.6bn shares traded were worth S$1.2bn in value.
• The FTSE ST Mid Cap Index declined -0.02% while the FTSE ST Small Cap Index gained +0.55%. The top active stocks were SembCorp Marine (-2.89%), SingTel (+1.06%), People’s Food (+0.83%), UOB (+0.77%) and China Minzhong (-6.34%).
• The STI is expected to remain muted today, due to continued market uncertainty.
• 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

• The composite SET index extended its gains by 19.53 points to 1,434.97 points on Wed after Senate Speaker Nikom Wairatpanich vowed to reject the blanket amnesty bill and the bill was expected to be sent back to the House of Representatives at the Nov 11 Senate meeting.  
• Even though gains in US equities and optimism about potential ECB rate cut would be positive for sentiment, we believe the room for upside appears limited for Thai stocks after the sharp bounce of nearly 50 points or 50% off the low of 1,388 points over the last couple of days on easing amnesty fears.
• In our view, Thai stocks are expected to be range-bound with risk skewed to the downside today. Even though concerns about blanket amnesty bill eased after the majority of senators vowed to reject the bill and PM Yingluck Shinawatra said the bill will not be brought back after 180 days, anti-amnesty protests however continued and several groups escalated protests to oust the government. Foreign investors remained net sellers of Thai equities throughout the last five trading sessions worth over Bt7,980mn. For short-term strategy, we advise investors to limit equity exposure to 50% of the portfolio.
• Resistance for the SET index is seen at 1450-1460 points and support at 1400-1420 points today.

Indonesia

• Indonesian stocks finished mostly higher Wednesday (06/11), in a series of placid moves so far this week, as mixed leads from global economies and domestic economic data provided little clue to stable market sentiments. The Jakarta Composite Index (JCI) gained a moderate 26.472 points, or 0.60%, to finish at 4,449.760. Trade, services and investment sector led gains that included six of the nine major industry groups, followed by consumer goods sector and miscellaneous industry sector. The LQ45 index ended with 0.80%-gain at 744.151. In economic news, Indonesia’s economy grew 5.62% in the June to September quarter, slower than 5.8% in the previous quarter, as exports and household consumption weakened. Bank Indonesia expects 5.5% - 5.9% growth this year. Gainers surpassed decliners 130 to 121 Wednesday on the Indonesia Stock Exchange, where 2.69 billion shares worth IDR 4.25 trillion changed hands on the regular board. Foreign investors posted net sale of IDR 324.72 billion.
• The Jakarta Composite Index (JCI) will likely trade higher today, with upbeat leads from US markets overnight and positive start in Asia this morning. We expect the JCI to gain today, with support and resistance at 4,381 – 4,467.

Sri Lanka

• The bourse weakens further despite substantial foreign participation. Witnessing yet another losing day, the Colombo bourse stretched further into the red terrain resulting in the indices to close within the red terrain.  The benchmark ASPI closed just 6 points above the 5,900 level, losing 6.73 points or 0.11%. The S&P SL20 ended the day at 3,254.89, dropping by 8.62 points or 0.26%. Foreign Investors appeared to be bullish during the day resulting in a net foreign inflow of LKR 294.60Mn being logged, adding further to the year to date net foreign inflow which amounts to LKR 23.57Bn. Foreign buying for the day amounted to LKR 357.81Mn, and selling amounted to LKR 63.21Mn. As at the daily closure the total market capitalization reduced to LKR 2.46Tn, while reducing the year to date gain to 13.31%. The market PER & PBV were 15.62x & 2.07x respectively. The aggregate turnover for the day amounted to LKR 571.80Mn, indicating a momentous rise of 158.85% against the previous trading day. Under the sectorial summary, Motors (MTR) sector provided LKR 260.29Mn (45.52% of the aggregated turnover) dominating the list, and Diversified Holdings (DIV) sector added LKR 113.37Mn to the day’s total turnover.  The daily traded volume amounted to 21.99Mn shares, indicating a gain of 67.19% against the previous trading day. Price losers outpaced the price gainers by 82:65. Looking at the local FOREX markets, the USD is currently selling at LKR 132.70/- and buying at LKR 129.44/-.

Australia

• The Australian share market on Tuesday enjoyed a strong finish on Melbourne Cup day, with the big miners leading the way. The benchmark S&P/ASX200 index was up 41.5 points, or 0.77 per cent, at 5,432.
• Today, the Australian market looks set to open flat after international markets retreated after downward revisions of eurozone growth and unemployment. The European Union cut its 2014 forecast for the 17-member single currency to 1.1 per cent growth next year, down from the 1.2 per cent it forecast in May, and a 12.2 per cent unemployment rate, up from the previous 12.1 per cent.
• In economic news on Wednesday, the Australian Bureau of Statistics releases September international trade in goods and services figures. CEDA launches a research report entitled Australia Adjusting: Optimising national prosperity.
• In equities news, Commonwealth Bank of Australia September is expected to post its quarterly trading update, while Downer EDI has its annual general meeting scheduled.

Hong Kong

• HSI lost 2 points to 23,036, the third day drop. CEI dropped 75 points or 0.71% to 10,561. Trading volume was HKD51.562 billion.
• HSI dropped to day low at 22,955 ( -84 points) in the morning but gained support at 50-MA of 22,903.
• China Mobile (941.HK) gained 1% due to the expectation of 4G license to be issued in this month.
• China property sector out-performed. Country Garden (2007.HK) and Sino-Ocean Land (3377.HK) climbed 3.2% and 1.8% respectively.
• CEC Int’l Hold (759.HK) gained 41.4% after announced expansion to makeup and supermarket business.
• BCQ (1963.HK) and Megaexpo (1360.HK), two IPO, lost 0.2% and gained 6.8% respectively.
• Technically, the next resistance and support for HSI are 23,500 and 22,880 respectively.

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Morning Note
Company Highlights

ST Engineering announced its wholly-owned subsidiary, ST Aerospace Resources (STA Resources) have signed a joint venture agreement with Wings Capital Partners Holdings Ltd, to set up WingStar Pte Ltd (WingStar). Under the joint venture agreement, the shareholders plan to build up a portfolio of mid-life and end-of-life aircraft assets which will initially include Airbus A320 and Boeing 737NG families of aircraft. (Closing Price: S$4.200, 0.478%)

OakWell Engineering has changed the name of the Company to “OEL (Holdings) Limited” as at 06 November 2013. The new trading counter  under “OEL” on the Catalist is expected to take effect on 8 Nov 2013