KLCI: -0.47% to 1798.7
JCI: -1.08% to 4350.8                            SET: -0.54% to 1404.8
HSI: +0.18% to 23700                            HSCEI: +0.63% to 11437
Nifty: -1.30% to 6122.9                          ASX200: -0.85% to 5307.7
Nikkei: -0.33% to 15076                         S&P500: -0.36% to 1781.4

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA:
Federal Reserve Chairman Ben S. Bernanke said the Fed will probably hold down its target interest rate long after ending $85 billion in monthly bond buying, and possibly after unemployment falls below 6.5 percent. "The target for the federal funds rate is likely to remain near zero for a considerable time after the asset purchases end, perhaps well after” the jobless rate breaches the Fed’s 6.5 percent threshold, Bernanke said yesterday in a speech to economists in Washington.

Japan:
Japan posted its biggest October trade deficit on record, as a revival in exports to the U.S. and China was overwhelmed by the nation’s soaring costs for imported fuel in the wake of the nuclear industry’s shutdown.The shortfall of 1.09 trillion yen ($10.9 billion) extended a record run of deficits to 16 months, and was larger than all 28 forecasts in a Bloomberg News survey, a finance ministry report showed today in Tokyo. Imports (JNTBIMPY) climbed 26.1 percent from a year earlier, while exports gained 18.6 percent.

China:
China's CB Leading Economic Index (LEI) decreases to 0.6 in October from a revised reading of 1.1 in the previous month. Commenting on the slower LEI, Andrew Polk, resident economist at The Conference Board China Center said that, the weak real estate activity due to the rising housing prices, has outweighed the improved outlook for manufacturing production and exports. "Slower property investment, coupled with a slightly tightened monetary stance, is likely to translate into weaker economic activity in Q4 and into 2014", he added.

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Regional Market Focus

Singapore

• The benchmark STI closed 7.85 points lower at 3.184.23 (-0.25%). The 1.3bn shares traded were worth S$0.8bn in value.
• The FTSE ST Mid Cap Index declined -0.30% while the FTSE ST Small Cap Index declined -0.20%. The top active stocks were SingTel (unchanged), DBS (+0.24%), Wilmar (-2.76%), UOB (+0.29%) and Keppel Corp (+0.73%).
• Singapore raised its 2013 growth forecast from 3.5% to 3.5%-4% after better than expected expansion in the last quarter.
• The STI may however end lower today, due to continued QE assessment.
• 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 slipped 0.54% on Wed after the Constitutional Court ruled the charter amendment on the composition of the Senate violated the Constitution but declined to order the dissolution of political parties.
• US equities fell on Wed as minutes from the Federal Reserve’s last meeting hinted at QE tapering anytime soon after the US economy showed more improvement. In Thailand, domestic political factor still bears close watching. The ruling Puea Thai Party will declare its stance on the Constitutional Court’s ruling on Senate change today. What also remains to be seen today is whether House Speaker will table the opposition Democrat Party’s no-confidence motion against PM and interior minister in current parliament session as the Constitution prohibits a House dissolution once a censure motion has been submitted. Foreign investors also turned heavy net sellers of Thai shares to the tune of Bt4bn on Wed.
• Even though political protest tensions eased as the red-shirt UDD supporters temporarily halted their protests after the court declined to order the disbanding of political parties, uncertainty however remains as anti-government protesters at Ratchadamnern Avenue plan a mass rally on Nov 24 with a deadline to force the Yingluck government out of office by the end of this month. Overall the risks will remain skewed to the downside for Thai stocks with support seen at 1380-1400 points.
• Today we peg resistance for the SET index at 1420-1430 points and support at 1400-1380 points.

Indonesia

• The Jakarta Composite Index (JC) declined Wednesday (20/11), after the Organization for Economic Cooperation and Development lowered its growth forecasts, and as investors stepped aside ahead of the US FOMC minutes release later in the day. The Jakarta Composite Index (JCI) slipped 47.550 points, or 1.08%, to close at 4,350.786, with eight of its nine major sectors closed in red. Miscellaneous industry sector fared worst with 2.67%-drop, followed by infrastructure sector with 2.03%-loss, and mining sector with 1.26%-decline. The LQ45 index shed 10.920 points, or 1.48%, to close at 727.087. The OECD forecast only a modest amount of economic recovery next year, cutting its predictions overnight by around 0.5% to 3.6% in 2014. The Paris-based research body attributed the weaker economic outlook to slowing growth in several large developing countries, as some economies are vulnerable to potential outflows when the US Federal Reserve reduces its stimulus plan. Decliners outran gainers 156 to 90 Wednesday on the Indonesia Stock Exchange, where 3 billion shares worth IDR 4.51 trillion traded on the regular board. Foreign investors posted net sale of IDR 197.24 billion.
• Indonesian stocks will likely trade lower today, after the Fed signaled sooner-than-expected tapering in its meeting minutes. The Rupiah may put pressure on the JCI today. We expect the JCI to decline, with support and resistance at 4,286 and 4,441.

Sri Lanka

• The Colombo bourse initiated day on a dull sentiment amidst the inactive participation of the investors to witness slight fluctuations at 5,810 levels and the benchmark ASPI drown further into the red terrain during the latter part of the day to settle at its intra-day low of 5,793.53 losing 15.62 points or 0.27%. The S&P SL20 ended the day at 3,209.27, dropping by 4.66 points or 0.14%. A total of 74 companies gained during the day whereas 89 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 2.41Tn, reducing the year to date gain to 11.19%. The market PER and PBV were 15.36x & 2.00x respectively. The turnover for the day amounted to record LKR 486.4Mn, indicating a drop of 19.4% from its previously recorded. Moreover, the three prime contributors for the turnover HNB, COMB & JKH accounted to more than half of the daily aggregate turnover. Under the sectorial round-up, Bank Finance and Insurance (BFI) sector topped the list providing LKR 290.7Mn and Diversified Holdings (DIV) sector stood next in line providing LKR 70.9Mn to the daily aggregate turnover.  A total of 27.8Mn shares changed hands during the day resulting in a gain of 16.7% compared to the previous trading day. Foreign participants appeared to be bearish during the day resulting in a net foreign outflow of LKR 74.6Mn, resulted by foreign buying of LKR 125.1Mn and selling of LKR 199.6Mn. This assisted the year to date net foreign inflow to reach LKR 22.9Bn. Looking at the local FOREX markets, the USD is selling at 132.73 /- and is buying at LKR 129.47 /-.

Australia

• Australian stocks dropped 0.8 percent on Wednesday to a one-month closing low, with wide selling of mining and bank stocks after comments by Federal Reserve Chairman Ben Bernanke weakened the U.S. dollar and strengthened the Australian currency, hurting exporters.
• Mining services companies were particularly pressured as WorleyParsons Ltd plunged 26 percent to a 4-1/2 year low after the company cut its 2014 full-year profit guidance. 
• The S&P/ASX 200 index fell 45.2 points to 5,307.7. extending losses for a third session.

Hong Kong

• HSI climbed 43 points or 0.18% to 23,700. CEI gained 71 points or 0.63% to 11,437. Trading volume declined to HKD70.535 billion.
• HKEX (388.HK), the best performed HSI constituent stock, gained 3% due to recent higher than average trading volume.
• Industrial goods sector out-performed. CH Rongsheng (1101.HK), Guangzhou Ship (317.HK) and Chi O Shipbldg (651.HK) surged 20.8%, 12.7% and 12.5% respectively.
• Software stocks rebounded with Boyaa (434.HK), Forgame (484.HK) and Kingsoft (3888.HK) rose 6.5%, 4.3% and 3.1% respectively.
• China Airline stocks out-performed on RMB appreciation expectation. China South Air (1055.HK), Air China (753.HK) and China East Air (670.HK) climbed 6.3%, 3.7% and 3.5% respectively.
• Technically, HSI retained above 10-MA and 50-MA. 14-RSI is at 61.9, we expect range bounded between 23,500 and 24,000 in short-term. The next resistance and support for HSI are 23,945 and 23,500 respectively.

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Morning Note
Company Highlights

CapitaMalls Asia Limited announced today that it is acquiring a new shopping mall in Guangzhou, China – its first in the city. The acquisition is subject to the approval of the Chinese government. CapitaMalls Asia has signed an agreement to acquire a shopping mall at Baiyun Greenland Centre, an integrated development located at the junction of Yuncheng West Road and Qixin Road within the core commercial centre of Baiyun New Town in Baiyun District. Baiyun Greenland Centre also comprises a 200 metre-high office tower – the tallest landmark in the district. The eight-storey shopping mall (from Basement 2 to Level 6) will have a total gross floor area, excluding car park, of about 86,000 square metres. Shoppers will have access to approximately 1,620 car park spaces available at the integrated development’s car park. On a completed basis, the total investment cost for the shopping mall is expected to be about RMB2,646.0 million (S$534.1 million / HK$3,340.7 million). (Closing Price: $1.965, -0.506%)

Rex International Holding Limited updated that its 65 per cent indirectly owned subsidiary Lime Petroleum Norway AS, has received approval from the Norwegian Ministry of Petroleum and Energy for the acquisition of 10 per cent interest in each of the two offshore licences, PL 707 and PL 708, from North Energy ASA (“North Energy”). Lime’s 10 per cent interest in each of PL707 and PL708 will become effective from 29 November 2013. The acquisition of the 10 per cent interest in the two licences is a result of the co-operation agreement between Lime and North Energy. Both concessions are located in the Barents Sea, in proximity to the coast on the Finnmark East platform. PL707 covers an area of about 982 square kilometres while PL708 covers an area of about 507 square kilometres. (Closing Price: $0.610, 4.274%)

Hoe Leong Corporation Ltd. announced that its wholly-owned subsidiaries - Arkstar Voyager Pte. Ltd. and Arkstar Offshore Pte. Ltd. have been awarded a 3+2 years chartering contract for its Platform Support Vessel – Arkstar Voyager by a major Saudi upstream oil company based in Saudi Arabia. The Vessel - Arkstar Voyager will be deployed to support marine operations for transport of supplies and cargos to the offshore assets in the Arabian Gulf. (Closing Price:  - , - %)

Source: PhillipCapital Research - 21 Nov 2013