STI: -0.42% to 3166.7                       KLCI: -0.69% to 1782.5
JCI: -1.80% to 4301.9                       SET: -0.59% to 1404.8
HSI: -1.91% to 22463                        HSCEI: -2.70% to 10276
Nifty: -0.47% to 5989.6                     ASX200: -1.40% to 5316.9
Nikkei: -0.12% to 14570                   S&P500: +0.81% to 1782

MARKET OUTLOOK:
By Joshua Tan, Head of Research
 

Regional Market Focus

Singapore

• The benchmark STI closed 13.51 points lower at 3166.74 (-0.42%). The 1.8bn shares traded were worth S$1.0bn in value.
• The FTSE ST Mid Cap Index declined -0.90% while the FTSE ST Small Cap Index declined -0.81%. The top active stocks were Noble Group (-2.78%), Pacific Radiance (unchanged), SingTel (-1.05%), Golden Agri-Resources (+0.89%) and GLP (-1.02%).
• The STI may end higher today on easing concerns over the potential nearer term start of the QE tapering.
• 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), and Boustead (Buy, TP: S$2.05).

Thailand

• Thai stocks traded in range during the session before the SET index finished the session down 8.31 points at 1,404.77 points on Wed on concerns about potential impact of prolonged political protests on the economy. 
• Political protests eased in the near term after the Senate rejected the blanket amnesty bill while the market turned more attention to external factors. Janet Yellen, who is likely to become the first woman to lead the Federal Reserve sent a signal that QE would be tapered after the US economy fares better. 
• Foreign selling spree bears close watching after foreign sell-off of Thai shares continued for 10 days in a row to the tune of a combined Bt20bn. Yesterday net foreign selling picked up to Bt4,279mn and Bt4,192mn of Thai shares and bonds respectively and foreign investors raised their net short positions in futures to 2,004 contracts. Domestic political factor also still needs to be closely watched as political temperature may rise again next week ahead of key political events including the second and third readings of the Bt2trn infrastructure loan bill in the Senate, the Constitution Court’s ruling on whether charter amendment on the make-up of the Senate violate the constitution and the red-shirt UDD’s plan to hold a mass rally on Nov 18-20. In our view, there is potential for a rebound in the SET index in a trading range of 1390-1420, 1430 points today.
• Resistance for the SET index is expected at 1420-1430 points and support at 1400-1380 points today.

• The Jakarta Composite Index (JCI) continued to decline Wednesday (13/11), amid concerns that Bank Indonesia’s key rate hikes would escalate borrowing costs and hurt earnings. The Jakarta Composite Index (JCI) dropped 1.80%, or 78.749 points, to end at 4,301.891, a level not seen since Sep. 9. The LQ45 index, which comprises Indonesia’s blue-chip shares, lost 16.357 points, or 2.24%, to 714.798. Bank Indonesia on Tuesday (12/11) raised its benchmark rate by another 25 basis points to 7.5% - a preemptive move which was not expected by many analysts and economists. Economists now believe that further tightening cannot be ruled out, as the central bank sets its eyes on healing the ailing current account. Indonesia’s current account deficit in the third quarter narrowed to USD 8.4 billion, or 3.8% of GDP, compared to USD 9.85 billion, or 4.4% of GDP in the previous quarter. Imports declined thanks to less shipment of non-oil and gas goods into the country during the third quarter. All major stock sectors fell Wednesday (13/11), with the automotive-dominated miscellaneous industry sector lost 3.03%, construction sector slid 2.80%, and basic industry sector fell 2.42%. Decliners outran gainers 250 to 45 on the Indonesia Stock Exchange, where 3.25 billion shares worth IDR 4.68 trillion changed hands on the regular board. Foreign investors posted net sale of IDR 554 billion.
• Indonesian stocks may rebound today, as investors turned their attentions on the possibility of the US Federal Reserve prolonging the bond purchase program after the change of leadership in the US central bank. We expect the Jakarta Composite Index (JCI) to climb today, and peg the near-term support and resistance at 4,240 and 4,389, respectively.

• The market ends on mixed note. The Colombo bourse closed the day on a mixed sentiment resulting in the indices to settle on both spaces. This benchmark ASPI closed the day at 5,816.04 gaining 3.20 points or minute 0.06%. The S&P SL20 dropped by 12.38 points or 0.39% to settle the day at 3,178.28. As at the daily closure the total market capitalization reduced to LKR 2.42Tn, while reducing the year to date gain to 11.62%. The aggregate turnover for the day amounted to LKR 710.41Mn, indicating a gain of 22.51% against the previous trading day. The daily traded volume amounted to 22.91Mn shares, indicating a drop of 36.64% against the previous trading day. Under the sectorial wrap-up, Diversified Holdings (DIV) sector made a contribution of LKR 489.94Mn, dominating the list while accounting a share of nearly 70.00% of the aggregated turnover.  Price gainers outperformed the price losers by 86:81. Foreign Investors appeared to be bearish during the day for the 2nd consecutive trading day resulting in a net foreign outflow of LKR 65.71Mn being logged, while reducing the year to date gain to LKR 22.54Bn. Foreign selling for the day amounted to LKR 272.47Mn and buying amounted to LKR 206.75Mn. With regard to the local FOREX, the USD is currently selling at LKR 132.70/- and buying at LKR 129.44/-.

• The Australian share market on Wednesday fell significantly as investors took profits and considered the possibility the Federal Reserve would soon start curtailing its economic stimulus program.
• Today (14/11/13), the Australian market looks set to open slightly lower following falls on international markets amid speculation the Federal Reserve may soon start curtailing its economic stimulus measures.
• No major economic news is expected on Thursday,
• In equities news, GrainCorp and Singapore Telecommunications are expected to post full year results, James Hardie Industries first half results and Paladin Energy first quarter results. BlueScope Steel, Mirvac Group, Macquarie Radio Network, Sims Metal Management, ResMed and New Hope Corporation have annual general meetings scheduled. The Bank of Queensland has a strategy update for investors.

• HSI lost 437 points or 1.91% to 22,463. CEI dropped 285 points or 2.7% to 10,276. Trading volume increased to HKD62.171 billion.
• HSI fell to near a 10-week low due to Chinese leader failed to give details about the policy shift after the Third Plenum.
• Tencent (700.HK) shed 4% before the quarterly results and after the chairman admitted the valuation of company is high.
• Belle Int’l, the worst performed HSI constituent stock, dropped 4.7% and reached 3-year low.
• Mainland banking sector under-performed on increase in both non-performing loan and rates in 3Q. ICBC (1398.HK), Bank of China (3988.HK), Bankcomm (3328.HK) and CM Bank (3968.HK) all dropped more than 3%.
• HK retail stocks out-performed with CEC Int’l Hold (759.HK), Bossini Int’l and I.T (999.HK) climbed 7%, 5.3% and 3.2% respectively.
• Technically, the next resistance and support for HSI are 22,978 and 22,230 respectively.

Morning Note
Company Highlights

Tat Hong Holdings Ltd refers to its press release dated 4 September 2013 and wishes to inform that the Company has decided to withdraw, for the time being, the sale of its property at 11 Gul Crescent, Singapore. Whilst there was interest from prospective buyers, such buyers intended to take immediate possession upon purchase. The Company, on the other hand, required a sale-and-leaseback arrangement for two years until its new premises are ready. (Closing Price S$0.915, -1.1%)

Far East Orchard Limited announced the resignation of Mr Yik Yen Shan, Vincent as the Chief Financial Officer of the Company with effect from 31 December 2013; and the appointment of Mr Kelvin Ling Ang Kerng as the Chief Financial Officer of the Company with effect from 1 January 2014. Mr Ling is currently the Chief Operating Officer, Retail Business Group of Far East Organization. He will relinquish that role prior to his appointment as Chief Financial Officer of the Company. Mr Yik will be leaving the Company to take up a new role with Far East Organization as its Chief Operating Officer, Australia Properties. (Closing Price S$1.920, -1.0%)

CCM Group Limited announced that the Company had, through its wholly-owned subsidiary, CCM Industrial Pte. Ltd., been awarded three (3) contracts worth an aggregate of S$5,627,713 from the Bishan-Toa Payoh Town Council. The details of which are as follows: (i) repairs and redecoration works to nineteen (19) blocks at Blocks 201 to 219 Bishan Street 23; (ii) repairs and redecoration works to fifteen (15) blocks at Blocks 301 to 313 Shunfu Road and Blocks 121 and 122 Lorong 2 Toa Payoh; and (iii) repairs and redecoration works to ten (10) blocks at Blocks 158 to 161, 163, 168 to 170, 173 and 174 Lorong 1 Toa Payoh. (Closing Price S$0.173, 9.5%)

Global Invacom Group Limited announced today that its wholly-owned subsidiary, Global Invacom Sdn Bhd, has secured a repeat contract worth approximately US$16.0 million, to supply satellite communications equipment and related services to a major Asian Broadcaster. Global Invacom will supply the broadcaster with the infrastructure for its subscribers to receive satellite signals and view High-Definition television. The bulk of the repeat contract is expected to be recognised in revenue in the financial year ending 31 December 2014. (Closing Price S$0.198, -0.5%)

Source: PhillipCapital Research - 14 Nov 2013