STI: -0.20% to 3180.3                      KLCI: -0.52% to 1794.8
JCI: -1.38% to 4380.6                      SET: +0.51% to 1413.1
HSI: -0.73% to 22901                       HSCEI: -0.20% to 10561
Nifty: -1.00% to 6018.1                    ASX200: -0.02% to 5392.2
Nikkei: +2.23% to 14588                 S&P500: -0.24% to 1767.7

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

Indonesia
Bank Indonesia surprised markets by raising both overnight lending rate and overnight deposit facility rate (a.k.a. FASBI) by 25 basis points to 7.50 percent and 5.75 percent respectively. Benchmark rate was raised for the fifth time since June this year to its highest level in four years, as the central bank attempts to drive current account deficit down to “a healthier level” and keep inflation under control.

USA:
Treasuries fell, pushing 10-year yields to the highest level in eight weeks, as signs America’s economy is gathering momentum underpinned the case for the Federal Reserve to reduce asset purchases. U.S. bonds maturing in longer than 10 years slid 11 percent this year, the worst performers among 144 sovereign indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Citigroup Inc.’s U.S. Economic Surprise Index rose to a two-week high last week as data showed payrolls rose more than economists forecast. Janet Yellen will face a confirmation hearing on Thursday to lead the Fed. The Treasury is due to auction $30 billion three-year notes today.

Eurozone:
Italy’s one-year borrowing costs fell to a record low at a sale of 6.5 billion euros ($8.7 billion) of bills, the first auction after the European Central Bank unexpectedly cut its benchmark interest rate. The Rome-based Treasury sold 365-day bills at 0.688 percent, down from 0.999 percent at the previous auction Oct. 10. Investors bid for 1.80 times the amount offered, up from 1.72 last month.

India:
Industrial production in September picked up as it grew 2 percent year-on-year, from August’s revised reading of 0.4 percent growth, on the back of higher export and domestic orders, the Central Statistics Office said.

Manufacturing sector, which constitutes about 76 percent of industrial production, increased 0.6 percent from a year ago, as compared to a 0.1 percent drop in August.

Consumer prices rose 9.90 percent in October over the year, following a 9.84 percent increase in September, due to stubbornly high food prices.
 

Regional Market Focus

Singapore

• The benchmark STI closed 6.47 points lower at 3.180.25 (-0.20%). The 1.7bn shares traded were worth S$0.8bn in value.
• The FTSE ST Mid Cap Index declined -0.47% while the FTSE ST Small Cap Index declined -0.07%. The top active stocks were SingTel (+0.53%), Capitaland (-0.65%), Genting Singapore (-2.06%), DBS (+0.36%) and Keppel Corp (+0.64%).
• 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$2.05) and Courts (Buy, TP: S$1.03).

Thailand

• The opposition Democrat Party said it distrusted the government after it called a joint session of the Senate and the House of Representatives to discuss the Preah Vihear Temple dispute for only four hours. The Democrats further said that the blanket amnesty bill has not yet been dead though the Senate rejected the bill while the government reiterated that it will not resuscitate the bill. (Source: Post Today)   
• The Thai Chamber of Commerce (TCC) said it opposed the idea of House dissolution to defuse political tensions as it could hurt the overall economy. The TCC also said business sector would not join Suthep Thaugsuban’s call for civil disobedience with a three-day national strike and deferral of corporate tax payments as it is illegal not to pay taxes. (Sources: Krungthep Turakij, The Nation)
• The Federation of Thai Industries (FTI) is urging people to ignore calls to stop work and not pay their taxes as part of anti-government protests. FTI chairman Payungsak Chartsuthipol said on Tue that the call for people to go on strike from Nov 13-15 as part of a civil disobedience campaign would damage the economy and erode confidence in Thailand in the international community. If the rallies were to continue, it would certainly have impact on the economy in the long-term, particularly the investment sector. GDP growth for 2013 may fall to only 3.5%, from the previous projection of 4%. (Source: Bangkok Post)
• Advertising spending in the first 10 months of 2013 showed a slight increase to Bt95.78bn from Bt94.3bn in the same period last year amid low purchasing power, according to the latest media survey by Nielsen (Thailand). TV commercials still accounted for 60% of total spending by advertisers and marketers. In the first nine months, the medium saw a 2.47% increase to Bt58bn from Bt56.69bn in the corresponding period last year. (Source: The Nation)
• The economy should expand by 5.2% next year as public investment projects are expected to become a key engine of growth, the International Monetary Fund said on Tue. Growth in GDP this year is projected to slow to 3.1%. With growth driven by domestic demand, the current account is expected to run a small deficit of 0.2% of GDP next year. (Source: The Nation)

• The Jakarta Composite Index (JCI) fell Tuesday (12/11), after Bank Indonesia raised its benchmark rate by another 25 basis points, in a move that surprised analysts. The JCI declined 61.084 points, or 1.38%, to finish at 4,380.640. The decline on Tuesday included seven of the 9 main stock sectors, with finance sector dropped 2.82%, property, construction and real estate sector fell 2.78%, and miscellaneous industry sector shed 1.90%. The LQ45 index lost 11.994 points, or 1.61%, to close at 731.155. Indonesia’s central bank on Tuesday hiked its key interest rate by 25 basis points to 7.5% after keeping the cost of borrowing on hold for the previous two months. This was the fifth time this year that Bank Indonesia has raised the central interest rate, after having kept the rate unchanged on its Sept 11 and Oct 9 meetings. The bank has raised the rate by a total of 1.75 percent since June. Decliners outpaced gainers 195 to 66 Tuesday on the Indonesia Stock Exchange, where 3.69 billion shares worth IDR 4.72 trillion changed hands on the regular board. Foreign investors posted net sale of IDR 463.29 billion.
• The Jakarta Composite Index (JCI) may trade with mild losses today, as indications from US markets overnight signaled prevailing dominant bear market. Fears about rising borrowing costs for JCI constituents after Bank Indonesia unexpectedly raised its key rate yesterday may also continue to weigh on sentiments. We expect the JCI to decline today, with support and resistance at 4,318 and 4,486, respectively.

• The bourse ends red… The Colombo bourse re-entered the red terrain triggering the benchmark ASPI to fall by 49.98 points (-0.85%) and to settle the day at its intraday low at 5,812.84. The S&P SL20 ended the day at 3,190.66, losing 39.70 points or 1.23%. As at the daily closure the total market capitalization stood at LKR 2.42Tn, while reducing the year to date gain to 11.56%. The aggregate turnover for the day amounted to LKR 579.87Mn, indicating a gain of 193.7% against the previous trading day. Under the sectorial round-up, Diversified Holdings (DIV) sector provided LKR 437.21Mn (75.4% of the aggregated turnover) dominating the list, and Bank Finance And Insurance (BFI) sector made a contribution of LKR 32.72Mn; the two sectors collectively accounted a notable 81.04% share of the total turnover for the day. The daily traded volume amounted to 36.15Mn shares, indicating an increase of 138.0% against the previous trading day. With regard to the foreign figures, a net foreign outflow of LKR 93.82Mn was recorded during the day, being a result of foreign sales of LKR 203.34Mn and purchases which amounted to LKR 109.52Mn. Currently the year to date net foreign inflow stands at LKR 22.61Bn. With regard to the local FOREX, the USD currently selling at LKR 132.68/- and buying at LKR 129.42/-.

• The Australian share market on Tuesday edged higher as gains by mining and chemical companies offset more falls by the major banks. The benchmark S&P/ASX200 index gained six points, or 0.11 per cent, to 5,393.1.
• Today (13/11/13), the Australian market looks set to open lower following Wall Street's downward lead after a top Federal Reserve official warned the bank's stimulus measures couldn't continue forever.
• In economic news on Wednesday, the Australian Bureau of Statistics releases September wage price index and October new motor vehicle sales data. The Westpac/Melbourne Institute Survey of Consumer Sentiment is due out.
• In equities news, DuluxGroup is expected to post full year results, CSR half year results, and Leighton Holdings third quarter results while Myer announces its first quarter sales results.  Fortescue Metals Group, Seven West Media, Aurizon, Breville Group, Computershare, REA Group, Mount Gibson Iron and Webjet have annual general meetings scheduled

• HSI lost 168 points or 0.73% to 22,901. CEI dropped 21 points or 0.2% to 10,561. Trading volume decreased to HKD49.422 billion.
• China  Mobile (941.HK), HSBC (5.HK) and AIA (1299.HK) led HSI down, dropped 1.2%, 0.9% and 1.9% respectively. Wharf Holdings (4.HK), the best performed HSI constituent stock, gained 1.7%.
• Kingsoft (3888.HK) lost 2.2% before results announcement. Netdragon (777.HK) and Forgame (484.HK) slumped 4.2% and 5.7% respectively.
• Local Telecom operators under-performed due to the rumor of re-auction of 3G spectrum. Smartone Tele (315.HK) and Hutchtel HK (215.HK) slipped 6.3% and 4.5% respectively.
• Boyaa (434.HK) climbed 13.8% from issue price in the first day trading. But day high was 30.3% more than the issue price.
• Technically, HSI failed retain at 23,000 again. The next resistance and support for HSI are 23,346 and 22,700 respectively.

Morning Note
Company Highlights

Sabana Real Estate Investment Management Pte. Ltd, as manager of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust and the manager of Sabana REIT, announced that HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of Sabana REIT, has entered into a new financing arrangement with The Hongkong and Shanghai Banking Corporation Limited, HSBC Amanah Malaysia Berhad and HSBC, Malayan Banking Berhad, Singapore Branch and United Overseas Bank Limited (as participants), for a new three-year revolving Commodity Murabaha Facility of up to S$48.0 million. (Closing Price S$1.085, -0.5%)

United Engineers Ltd announced that its wholly-owned subsidiary, UE Development (Alexandra) Pte. Ltd., has entered into a S$309 million secured loan facility agreement with Oversea-Chinese Banking Corporation Limited, United Overseas Bank Limited and DBS Bank Ltd. to part finance the acquisition and repair and replacement works of mechanical and electrical equipment of the Property (Closing Price S$1.805, -0.8%)

MFS Technology Ltd announced that Dato Tan Bian Ee will be retiring from his position as Group Chief Executive Officer and Executive Director of the company on 17 February 2014, following the completion of his service contract. Succeeding Dato Tan is Mr Chan Hong Wai, who will be appointed as Executive Director and Group Chief Executive Officer designate on 1 December 2013. He is currently a Non-Executive and Non-Independent Director of MFS and has 29 years of experience in electronics, engineering and other technology manufacturing industries spanning Asia, Europe and USA. (Closing Price S$0.132, -)

Source: PhillipCapital Research - 13 Nov 2013