KLCI: +0.14% to 1792.4
JCI: +1.34% to 4393.6                           SET: +0.23% to 1423.9
HSI: +2.73% to 23660                            HSCEI: +5.65% to 11307
Nifty: +2.19% to 6189                            ASX200: -0.31% to 5384.6
Nikkei: -0.01% to 15164                        S&P500: -0.37% to 1791.5

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA:
U.S. interest-rate swaps fell to the least in more than a year relative to Treasuries as traders sought higher-yielding assets outside of government debt on bets Janet Yellen will keep borrowing costs down. The difference between the five-year Treasury rate and similar-maturity swap narrowed to 10 basis points, the least since Nov. 2, 2012, based on closing levels. The spread shrinks as investors seek to receive a fixed-interest rate on contracts backed by a bank over the relative safety of Treasuries.

Singapore:
Singapore’s non-oil domestic exports (NODX) rose 2.8 percent y-o-y in October, on the back of strong exports of petrochemicals and integrated circuit parts as it snapped its eight consecutive months downward trend, said the trade agency IE Singapore. NODX stood at 1.2 percent contraction in September. Across sectors, electronics exports fell 1.4 percent, however, this was outweighed by the 4.9 percent increase in non-electronic exports. On a month-on-month basis, NODX jumped 3.2 percent in October.

Thailand:
The July-September gross domestic product (GDP) rose 1.3 percent as compared to the revised flat reading in the second quarter of the year, the National Economic & Social Development Board said. GDP grew 2.7 percent year-on-year, after a revised 2.9 percent y-o-y expansion a quarter ago.

According to Bloomberg, the state agency revised its full-year expansion forecast downwards to 3 percent from a range of 3.8 percent to 4.3 percent projected in August, and said the economy may grow 4 percent to 5 percent in 2014. The agency also slashed its expectations of export growth to zero this year, from an earlier estimate of 5 percent.

China:
Average new home prices in China continued its rising trend as the October home prices rose 9.6 percent, its tenth straight months of year-on-year increases, according to data from National Bureau of Statistics (NBS). New home prices in China’s four major cities posted the largest gains since January 2011.

Hong Kong:
Unemployment rate remains steady at 3.3 percent in the three-months to October, as resilient domestic demand kept the labor market stable, the Census and Statistics Department said.

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Regional Market Focus

Singapore

• The benchmark STI closed 1.76 points higher at 3.203.03 (+0.05%). The 2.4bn shares traded were worth S$1.0bn in value.
• The FTSE ST Mid Cap Index gained +0.08% while the FTSE ST Small Cap Index gained +0.17%. The top active stocks were DBS (-0.53%), SingTel (+0.27%), Noble Group (+3.37%), Global Logistic Properties (-1.92%) and CapitaLand (+0.98%).
• 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 traded to the upside on Mon on positive external factors after China unveiled bold long-term economic reforms but domestic political worries in Thailand however limited gains to a mere 0.23%.
• US equities gave up some earlier gains on overbought concerns after the Dow industrials broker through the 16,000-point barrier while several market participants kept a wary eye on US economic data and QE prospects.
• In Thailand, the market continued to give much weight to domestic political factor. The second and third readings of the Bt2trn borrowing bill for infrastructure development scheme in the Senate enter the second day today while investors are eagerly awaiting the Constitutional Court’s ruling on Senate change due out tomorrow. In a worst case scenario, the court’s verdict may possibly lead to the dissolution of six ruling political parties.
• Net foreign selling in Thai shares dissipated and foreign investors turned net buyers of Thai bonds for a second straight day. For this reason, the downside would be more limited. In our view, Thai stocks seem likely to be caught in a tug of war with limited upside and downside ahead of the court’s ruling on the senator related case but there is still room for short-term trading opportunities in companies expected to benefit from the Bt2trn infrastructure loan bill.
• Resistance for the SET index is expected at 1435-1445 points and support at 1410-1400 points today.

Indonesia

• The Jakarta Composite Index (JCI) advanced Monday (18/11), as most stock indexes in Asia traded higher after China announced new outlines for economic restructuring, and with Fitch ratings kept its investment grade for Indonesia. The JCI gained 58.144 points, or 1.34%, to close at 4,393.592. Shares in miscellaneous industry sector led gains that included eight of the 9 major industry groups, followed by basic industry sector and infrastructure sector. The LQ45 index added 14.647 points, or 2.03%, to 736.721. Debt ratings agency Fitch affirmed Indonesia’s debt rating as investment grade, expecting the country’s economy expansion to slow next year as it struggles to narrow the current-account deficit. Fitch maintained Indonesia’s BBB- rating, or the lowest investment grade level. 141 shares advanced and 99 shares declined Monday on the Indonesia Stock Exchange, where 3.02 billion shares worth IDR 3.58 trillion traded on the regular board. Foreign investors’ transactions accumulated to a net purchase of IDR 286.08.
• Indonesian stocks will likely trade lower today, with negative leads from Wall Street overnight as well as weak start in Asia this morning. We expect the Jakarta Composite Index (JCI) to trade lower, with support and resistance at 4,342 and 4,429, respectively.

Sri Lanka

• The Colombo bourse re-entered into the green terrain and closed the trading date on a positive note. The ASPI gained 13.51 points or 0.23% to enter the green terrain and settled the day at 5,824.48. The S&P SL20 gained 25.63 points or 0.81% to settle at 3,200.31. A total of 49 companies gained during the day whereas 108 companies posted drops in share prices.  As at the daily closure, the total market capitalization as at the day’s closure moved up to LKR 2.42Tn, extending the year to date gain to 11.78%. The market PER and PBV were 15.26x & 2.01x respectively.  The turnover for the day amounted to record LKR 936.4Mn, indicating a gain of 299.7% from its previously recorded. Under the sectorial round-up, Bank Finance and Insurance (BFI) sector topped the list providing LKR 715.7Mn and Diversified Holdings (DIV) sector stood next in line providing LKR 108.0Mn to the daily aggregate turnover. A total of 143.6Mn shares changed hands during the day resulting in a gain of 626.4% compared to the previous trading day. Foreign participants appeared to be bullish during the day resulting in a net foreign inflow of LKR 76.5Mn, resulted by foreign buying of LKR 134.6Mn and selling of LKR 58.1Mn. This assisted the year to date net foreign inflow to reach LKR 22.67Bn. Looking at the local FOREX markets, the USD is selling at 132.74/- and is buying at LKR 129.48/-.

Australia

• Australian shares fell 0.3 percent on Monday, pulled down by blue-chip stocks in a broad sell-off after a bullish October, though sentiment was buoyed by Wall Street hitting new highs and a surge in takeover target Warrnambool Cheese.
• The S&P/ASX 200 index fell 17 points to finish at 5,384.7. The benchmark gained nearly 1 percent on Friday after dovish comments by U.S. Federal Reserve Chair nominee Janet Yellen.

Hong Kong

• HSI climbed 627 points or 2.73% to 23,660. CEI surged 604 points or 5.65% to 11,307. Trading volume increased to HKD112.076 billion.
• HK market rose for a third day with high volume after China vowed to carry out the broadest expansion of economic freedoms. HSI reached the highest point since 5 Feb 2013.
• Baby related stock outperformed as policy makers said they would relax the one-child policy.  Yashili Int’l (1230.HK), Biostime (1112.HK) and CH Modern D (1117.HK) gained 9.7%, 6.5% and 5.3% respectively.
• Chinese brokerages led CEI up as government flagged policy changes that portend the end of a ban on IPO. Citic Securities (6030.HK) and Haitong Securities (6837.HK) gained 13% and 10.8% respectively.
• China insurance sector also benefited from the ease of one-child policy due to expectation of more health and pension insurance. CPIC (2601.HK), Ping An (2318.HK) and China Life (2628.HK) gained 13.2%, 9.4% and 8.7% respectively.
• HK telecom operators under-performed on 3G-spectrum auction. HKT-SS (6823.HK) and Hutchtel HK (215.HK) dropped 4.2% and 2.5% respectively.
• Technically, HSI broke Sep high of 23,554 finally as we forecasted before and it stayed above 10-MA and 50-MA. The next resistance and support for HSI are 23,945 and 23,500 respectively.

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Morning Note
Company Highlights

Otto Marine Limited announced that its subsidiary, PT Batamec shipyard has clinched two newbuilding contracts from its repeated reputable Indonesian customer to build two 3000 HP Habour Tugs for a consideration of approximately USD 9 million. The Vessels are expected to be completed by fourth quarter of 2014. (Closing Price: $0.060, - %)

SingHaiyi Group Ltd. announced that it has successfully acquired the full equity stake of Vietnam Town, a partially completed commercial condominium development project in San Jose, California, U.S.A., which was placed under receivership, for US$33.05 million. Acquired via a trustee’s auction conducted on 14 November 2013, VT marks SGXCatalist listed SingHaiyi’s second acquisition of distressed U.S. real estate following the acquisition of Tri-County Mall in Cincinnati, Ohio, for US$45 million announced on 30 September 2013. SingHaiyi said its acquisition price of US$33.05 million– already settled in full by the Company – includes US$29.8 million to repay an outstanding secured debt, and the balance US$3.25 million for the freehold project, comprising several parcels of land sitting on a total site size of 853,502 square feet. (Closing Price: $0.023, - %)

ARA Asset Management Limited announced that the Group has raised US$240 million in capital commitments for its private real estate funds division. The capital commitments were raised via a new separate account platform, Morningside Investment Partners, LLC. A US-based, public pension fund is the investing member of MIP. Mandated to pursue a core-plus/value-add strategy, MIP has a term of eight years with two additional extension periods of one year each. MIP will target income-producing properties in the office and retail sectors in Singapore, Hong Kong and Malaysia. (Closing Price: $1.795, -0.278%)

Civmec Limited’s subsidiary, Civmec Construction & Engineering Pty Ltd, an Australian based integrated multi-disciplinary heavy engineering service provider, announced further new contract awards in addition to the recently announcement of SGD$210 million of new contracts. The latest additional combined contract value is circa of SGD$65 million and comprises both existing clients and new clients. Several existing contracts also increased in scope. (Closing Price: $0.750, - %)

Soilbuild Construction Group Ltd. has been awarded by Vector Aerospace with a S$13.0 million contract for the proposed erection of a part single-storey and part 2-storey factory building with ancillary office at the 2nd storey at Seletar Aerospace View, located within Seletar Aerospace Hub1. The Vector Aerospace contract is expected to commence work by December 2013 and be completed by the third quarter of 2014. This latest contract win brings the Group’s orderbook to S$435.0 million to date, with a substantial portion to be completed in the next 12 to 24 months. (Closing Price: $0.280, 1.818%)

Q & M Dental Group (Singapore) Limited announced that its wholly owned subsidiary, Q & M Dental Holdings (China) Pte. Ltd had on 18 November 2013 entered into a non-binding Memorandum of Understanding with Mr Li Hongwen and Mr Li Bin to acquire fifty one per cent (51%) stake in the specialized dental materials manufacturer known Qinhuangdao Aidite High Technical Ceramic Co., Ltd owned by the Sellers and located in Qinhuangdao in Hebei Province, People’s Republic of China. Pursuant to the MOU, Q&M China will purchase 51% of the shares from the Sellers for a total consideration of RMB 76.5 million (approximately S$15.3 million). The Purchase Consideration shall be paid either in cash or the Company shares or partly in both. (Closing Price: $0.320, 3.226%)

Falcon Energy Group Limited announced that the Company is proposing to undertake a bonus issue of up to 82,453,751 free warrants. The Bonus Issue shall be on the basis of one Warrant for every ten existing ordinary shares in the capital of the Company held as at a books closure date to be determined by the directors of the Company for the purpose of determining the entitlements of the shareholders of the Company, fractional entitlements to be disregarded. Each Warrant will carry the right to subscribe for one New Share at an exercise price of S$0.430, representing a 8.86% premium to the weighted average price of the Shares on 15 November 2013, being the last full market day immediately preceding the date of this announcement on which trades on the Shares were done on the Main Board of the Singapore Exchange Securities Trading Limited. (Closing Price: $0.410, 2.500%)

City Green Build Technology Pte. Ltd. announced that it has today agreed to acquire from China Invest Trading Limited, Wu Jianguo and Great Star Industry Company Limited pursuant to a married deal an aggregate of 109,581,879 issued and paid-up ordinary shares in the capital of Youyue International Limited, representing approximately 45.88% of the total number of issued Shares, at the price of S$0.025 per Share. As a result of the Acquisition and in accordance with Rule 14.1 of the Singapore Code on Take-overs and Mergers, the Offeror will make a mandatory conditional cash offer for all the remaining Shares, other than those Shares held by the Company as treasury shares and those Shares owned, controlled or agreed to be acquired, directly or indirectly, by the Offeror as at the date of the Offer. The Offeror will make the Offer for the Offer Shares of S$0.025 in cash. The Offeror does not intend to revise the Offer Price. (Closing Price: - , - %)