KLCI: +0.32% to 1789.9
JCI: -0.73% to 4335.5                            SET: +0.35% to 1420.7
HSI: +1.69% to 23032                            HSCEI: +3.00% to 10702
Nifty: +1.11% to 6056                            ASX200: +0.86% to 5401.7
Nikkei: +1.95% to 15165                        S&P500: +0.42% to 1798.2


MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA:
Janet Yellen indicated she’ll press on with the Federal Reserve’s unprecedented monetary stimulus until she sees a robust recovery, downplaying risks the policy is inflating asset bubbles. Yellen signaled her determination to use bond buying to strengthen the economy and drive down the nation’s 7.3 percent unemployment rate.

Production at U.S. factories picked up in October, indicating the government shutdown did little to impede manufacturing at the start of the fourth quarter. The 0.3 percent advance followed a 0.1 percent gain the prior month and exceeded the 0.2 percent median projection in a Bloomberg survey, figures from the Federal Reserve showed today in Washington. Total industrial production fell 0.1 percent as mining and utility use declined.
 
Singapore:
Singapore's retail sales jumped 0.5 percent in September as compared to August, mainly due to strong motor vehicle sales, which gain 19.1 percent. Excluding motor vehicles, retail sales fell 2.5 percent, according to data from Department of Statistics. However, on an annual term, retail sales declined by 5.9 percent in September and fell marginally by 0.3 percent, if excluding motor vehicles.

Hong Kong
Hong Kong's economy expanded at a slower pace to a seasonally adjusted 0.5 percent in the third quarter from a revised 0.7 percent growth in the previous quarter, weighed down by weak export numbers and a drop in retail sales, the government said. On year-on-year basis, gross domestic product (GDP) grew 2.9 percent in the quarter ended September, compared to the same period last quarter's 3.2 percent. Total exports climbed 6.2 percent y-o-y in 3Q 2013, the same growth as 2Q 2013.

Malaysia
Malaysia's GDP grew increased 5 percent y-o-y in the third quarter, faster growth compared to the 4.4 percent revised gain in the previous quarter, on the back of strong domestic demand and a rebound in exports. "Domestic demand remained the key driver of growth, expanding by 8.3%, while exports turned around to grow by 1.7%," Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said at a press conference.

Meanwhile, 3Q 2013 current account surplus widened fourfold to RM9.8 billion from RM2.6 billion in the 2Q 2013. The third quarter surplus, mainly pushed up by a higher surplus of goods account, marked the highest for the year. The goods account surplus rose 38 percent in the three months ended September, said the Department of Statistics.

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Regional Market Focus

Singapore

• The benchmark STI closed 10.19 points higher at 3.201.27 (+0.32%). The 1.6bn shares traded were worth S$1.0bn in value.
• The FTSE ST Mid Cap Index gained +0.30% while the FTSE ST Small Cap Index gained +0.17%. The top active stocks were Golden Agri-Resources (+3.42%), Wilmar (unchanged), GLP (+4.33%), Hutchison Port Holdings Trust (+0.73%) and Suntec REIT (-1.88%).
• The STI is expected to end higher today, buoyed by China’s commitment to broaden economic freedom.  
• We peg key near term support at 3,100 levels.
• Top Picks are DBS (Accumulate, TP: S$17.50), SingTel (Accumulate, TP: S$4.06) 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 opened higher last Fri after Janet Yellen said the US economy still needed QE but some of the earlier gains were later pared on domestic political worries. The SET index finished the session up a mere 0.35% last Fri.
• Even though QE optimism boosted risk-on sentiment in Asian equities, we believe fund inflows would be on a selective basis depending on fundamentals of each country. Today Thailand’s third-quarter GDP data will be the main economic event to watch. Domestic political uncertainty remains as the Bt2trn infrastructure loan bill is tabled for the second and third readings in the Senate today while political movements on the streets between supporters and opponents of the government still need to be monitored closely. Domestic political heat may also rise again during the middle of this week when the Constitutional Court is scheduled to rule on whether charter amendment on the make-up of the Senate violates the Constitution.
• Foreign selling spree continued unabated in the Thai stock market while domestic political jitters continued to weigh on sentiment after the curtain came down on third-quarter earnings season. In our view, room for further upside appears limited. Selective trading strategy is advised with focus on companies expected to benefit from the government’s Bt2trn borrowing bill for infrastructure development scheme i.e. CK and KTB.
• Today we peg resistance for the SET index at 1435-1445 points and support at 1410-1400 points.  

Indonesia

• Most Indonesian stocks fell Friday (15/11), as investors reconsidered the impact of higher key rate set by Bank Indonesia earlier in the week. The Jakarta Composite Index (JCI) declined 31.923 points, or 0.73%, to finish the week at 4,335.448. Property, construction and real estate sector fared worst on Friday, as the sector index dropped 2.06%. Miscellaneous industry sector followed with 1.98%-loss, and consumer goods sector with 1.54%-decline. Twenty seven of the forty five blue-chip shares ended in red, bringing the LQ45 to close 0.94% lower at 722.074. Shares in consumer goods and miscellaneous industry sectors were hit the hardest on Friday, as investors reassessed the impact of higher borrowing costs for consumers and automotive sales. 171 shares closed lower, and 73 shares ended higher Friday on the Indonesia Stock Exchange. Trade volume and value on the regular board dropped to 3.27 billion shares worth IDR 3.57 trillion, as compared to the average of 4 billion shares valued at more than 4 trillion Rupiah traded daily. Foreign investors posted net sale of IDR 192.52 billion.
• The Jakarta Composite Index (JCI) may move moderately higher today, with momentums from positive closes on US markets Friday. Downward pressure however, may come from weaker Rupiah against the US dollar. We expect the JCI to edge higher today, with support and resistance at 4,270 and 4,439, respectively.

Sri Lanka

• The bourse was unable to sustain the positive movement seen during the previous trading days, while resulting in the indices to re-enter the red terrain once again. The market dropped by 18.08 points or 0.31% to close the day at 5,810.97 and the S&P SL20 settled at 3,174.68 losing 11.28 points or 0.35%. As at the daily closure the total market capitalization stood at LKR 2.42Tn reducing the year to date gain to 11.52%. The market PER & PBV stood at 15.22x & 2.01x respectively. The turnover for the day aggregated up to record LKR 234.29Mn, indicating a drop of 55.43% as against its previously recorded. Under the sectorial round-up, Bank Finance & Insurance (BFI) sector stood on top providing LKR 110.61Mn accounting a share of 47.21% of the day’s total turnover and Diversified Holdings (DIV) sector secured the second place contributing LKR 37.20Mn. Moreover, the two sectors collectively accounted to 51.00% of the day’s total turnover. The daily traded volume amounted to 19.78Mn, dropping by 46.72% from the previous trading day. With regard to the movement in share prices, price losers outstripped the price gainers by 113:52. Foreign participants maintained their bullish stance for the second consecutive trading day resulting in a net foreign inflow of LKR 30.38Mn, resulted by foreign purchases of LKR 67.80Mn and sales which amounted to LKR 37.42Mn. The year to date net foreign inflow currently stands at LKR 22.61Bn.
• The week commenced recording the 2nd lowest turnover logged for the year and the bourse witnessed marginal ups and downs during the week and ended the week on a negative note. The benchmark ASPI and S&P SL20 lost 44.37 (0.76%) and 57.82 (1.79%) to close the week at 5,810.97 and 3,174.68 respectively. The turnover for the week was LKR 2.2Bn supported by 8 crossings while recording a dip of 36.48% compared to the previous week’s turnover. The aggregate turnover recorded by the top three subscribers made a substantial 38.6% contribution to the week’s total turnover. A total of 131.1Mn shares changed hands during the week; this was a decrease of 10.9% compared to the previous week. With regard to the local FOREX markets, currently the USD is selling at LKR 132.73/- selling and LKR 129.47/- buying.

Australia

• The Australian share market on Friday ended the week with solid gains as investors welcomed the incoming US Federal Reserve chair's comments about maintaining economic stimulus. The benchmark S&P/ASX200 index gained 46.3 points, or 0.86 per cent, to 5,401.7 points.
• Today (18/11/13), the Australian market looks set to open higher following gains on international markets after Federal Reserve chief nominee Janet Yellen bolstered expectations of the Fed keeping the flow of easy money.
• No major economic news is expected on Monday.
• In equities news, Arrium and iSelect have annual general meetings scheduled.

Hong Kong

• HSI climbed 383 points or 1.69% to 23,032. CEI gained 311 points or 3% to 10,702. Trading volume increased to HKD66.924 billion.
• Hong Kong market was firmer with the benchmark index rising a second day on last Friday after Federal Reserve signaling the same stimulus scale.
• For last week, HSI was up 287 points or 1.3%. CEI out-performed with 311 points or 3% gain.
• Mainland financial sector outperformed, with NCI (1336.HK), Haitong Sec (6837.HK) and Minsheng Bank (1988.HK) up 8.3%, 6.9% and 3.8% respectively.
• Tencent (700.HK), which kept rebounding after quarterly results, gained 2.1%.
• Want Want China (151.HK) and China Resources (291.HK), the weakest 2 HSI constituent stocks, dropped 0.2% and 0.6% respectively.
• Shale gas stocks out-performed on the expectation of becoming the focus of energy reform. SPT Energy (1251.HK) and Honghua Group (196.HK) climbed 7.5% and 4.5% respectively.
• Technically, HSI regained 10-MA, 20-MA and 50-MA, and also refilled the bear gap formed on 13 Nov, sending a positive signal. The next resistance and support for HSI are 23,472 and 22,800 respectively.

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Morning Note
Company Highlights

UE E&C Ltd. announced that Greatearth Construction Pte Ltd, a wholly owned subsidiary of Greatearth Holding Pte Ltd, which in turn is a wholly-owned subsidiary of the Company has on 15 November 2013, entered into a conditional sale and purchase agreement with Mr. Goh Keng Hoe to acquire 150,000 ordinary shares in the capital of UE-IBP Building Materials Pte. Ltd. The Shares represent the remaining 30% of the issued and paid-up capital of UE-IBP as at the date of the SPA. Currently, Greatearth Construction holds 70% of the issued and paid-up capital of UE-IBP. The proposed Acquisition is in line with Greatearth Construction’s strategy of expanding its core construction related business as UE-IBP could offer competitive advantage. Further, the Group has constantly been seeking opportunities in sectors with good prospects for long-term growth to enhance its value proposition to its shareholders and customers. The aggregate consideration for the Acquisition is S$350,000.00. (Closing Price: $0.955, 1.058%)

RH Petrogas Limited refers to its announcement (SGXNET Announcement No. 52) issued on 25 September 2013 and provided an update on the drilling of the Zircon-1 exploration well in the Salawati Kepala Burung PSC, Indonesia. As announced on 25 September 2013, Zircon-1 reached its total vertical depth of 1,525 meters. The well encountered several oil shows and, after log analysis, drill stem tests were performed on 4 zones to confirm the presence of hydrocarbon. Preliminary assessment of the DST results indicated that, despite oil shows, hydrocarbons were not recovered in the well. The Company and its partners will conduct post mortem analysis of the well to further evaluate the Zircon structure. The well will be plugged and abandoned in accordance with the drilling program. (Closing Price: $0.650, 1.563%)

China Environment Ltd. announced that it has agreed to issue 31 million new shares in the issued capital of the Group at S$0.55 per share to Havenport Asset Management, in a placement exercise to raised S$17.05 million, subject to the in-principle approval from the Singapore Exchange Securities Trading Limited for the listing of the placement shares. (Closing Price: $ - , - %)

ARA Trust Management (Suntec) Limited, the manager of Suntec Real Estate Investment Trust, announced that HSBC Institutional Trust Services (Singapore) Limited, as trustee of Suntec REIT, has entered into agreements to acquire a 100% interest in 177-199 Pacific Highway, a freehold land and property to be developed for a consideration of A$413.19 million. The Property is a 31-storey A grade state-of-the-art commercial tower which is targeted for completion in early 2016. With an approximate net lettable area of 423,915 sq ft, the Property is located in one of the most prominent sites in North Sydney Central Business District at the junction of Pacific Highway and Berry Street. The Property’s prime location enables it to enjoy direct access to a number of major surrounding roadways and is well served by public transport. The Property is a 5-minute walk from North Sydney station. (Closing Price: $1.565, -1.881%)

KLW Holdings Limited announced that it had entered into a conditional subscription and subscription option agreement with Prince Abdul Qawi. Pursuant to the Agreement: (i) the Company has agreed to allot and issue 500,000,000 new ordinary shares in the capital of the Company at an issue price of S$0.02 per Placement Share to the Subscriber; (ii) the Company has agreed to grant to the Subscriber an option to require the Company to allot and issue up to 2,000,000,000 new Shares at the Issue Price during a period commencing after the Placement Completion Date and ending 24 months thereafter; and (iii) The Subscriber has agreed to grant to the Company the option to require the Subscriber to subscribe such number of Call Option Shares that has not been allotted and issued to the Subscriber and/or Subscriber Nominee pursuant to exercise of the Call Option at the Issue Price during a period commencing after the last day of the Call Option Period and ending 6 months thereafter. The Company is also proposing to undertake a renounceable non-underwritten rights issue of up to 2,440,278,158 new Shares, at an issue price of S$0.02 for each Rights Share, with up to 2,440,278,158 free detachable warrants, each Warrant carrying the right to subscribe for one new Share in the capital of the Company at an exercise price of S$0.07 for each Warrant Share, on the basis of one Rights Share and one Warrant for every one existing Share in the capital of the Company held at a books closure date to be determined, fractional entitlements to be disregarded. (Closing Price: $0.025, 4.167%)

KLW Holdings Limited announced that the Company has entered into a non-binding term sheet dated 15 November 2013 with Mr. Alan Chong Sin Kiong in relation to a proposed acquisition by the Company of (i) at least 30% equity interest in Wah Loon Engineering Pte Ltd and certain of its subsidiaries; and (ii) either by the Company itself and/or in collaboration with other third parties to acquire the remaining 70% equity interest in Wah Loon. The Initial Share Acquisition and the Subsequent Share Acquisition are inter-conditional. (Closing Price: $0.025, 4.167%)