KLCI: -0.01% to 1794.52
JCI: -0.19% to 4317.96                             SET: -1.22% to 1359.07
HSI: +0.49% to 23696.28                         HSCEI: +1.02% to 11448.74
Nifty: -0.06% to 5995.45                          ASX200: +0.90% to 5335.91
Nikkei: +0.10% to 15381.72                    S&P500: +0.50% to 1804.76

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA
Payrolls increased in 34 U.S. states in October and the unemployment rate fell in 28, a sign labor market progress is picking up across much of the country. Florida led the nation with a 44,600 gain in employment last month, followed by California with 39,800 more jobs.

Eurozone
German business confidence surged to the highest level in more than 1 1/2 years, signaling that the recovery in Europe’s largest economy remains on track even after growth slowed in the third quarter. The Ifo institute’s business climate index, based on a survey of 7,000 executives, increased to 109.3 in November from 107.4 in October. That’s the highest since April last year and exceeds all 43 economist forecasts in a Bloomberg News survey. The median was for an increase to 107.7.
German business confidence surged to the highest level in more than 1 1/2 years, signaling that the recovery in Europe’s largest economy remains on track even after growth slowed in the third quarter. The Ifo institute’s business climate index, based on a survey of 7,000 executives, increased to 109.3 in November from 107.4 in October. That’s the highest since April last year and exceeds all 43 economist forecasts in a Bloomberg News survey. The median was for an increase to 107.7.

Malaysia
Annual inflation accelerated in October as consumer price index (CPI) climbed 2.8 percent following September’s 2.6 percent gain, the Department of Statistics said. The rate is the highest since December 2011 and above of expectations of 2.7 percent from a Reuters poll of 11 economists. Inflation was pushed up by a 3.7 percent higher prices in food and non-alcoholic beverages, and a 1.8 percent growth in housing costs and utility prices. CPI moved up 0.4 percent in October on a monthly basis, and advanced 1.9 percent during the January-October period as compared to the same period last year.

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Regional Market Focus

Singapore

• The benchmark STI closed 0.47 points higher at 3.172.85 (+0.01%). The 1.3bn shares traded were worth S$0.8bn in value.
• The FTSE ST Mid Cap Index gained +0.02% while the FTSE ST Small Cap Index declined -0.06%. The top active stocks were SingTel (-0.54%), Keppel Corporation (+0.45%), UOB (unchanged), DBS (+0.59%) and Suntec REIT (unchanged).
• 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

• The composite SET index extended its losing streak for a fourth day last Fri as investors dumped shares on fears that a planned mass anti-government rally by the opposition Democrat Party on Nov 24 could spark violence.
• The Dow industrials ended at another record high above 16,000 points last Fri, lifting sentiment in stock markets in Asia on Mon but domestic political uncertainty may however keep the downside risk in the Thai stock market intact. Even though a four-day losing streak of more than 60 points could set the stage for some rebound in Thai stocks, we think domestic political anxiety would continue to weigh on sentiment after anti-government protesters at the Democracy Monument will today set out on symbolic marches across the capital to 13 locations including state agencies, military headquarters and TV channels to get civil servants and soldiers to fight alongside the people in an attempt to overthrow the so-called ‘Thaksin Regime’
• In view of the persistent domestic political risk, we believe the SET index will stay in negative territory today amid continued foreign sell-off on domestic political worries. MTD net foreign selling of Thai shares topped Bt30,996mn. To play safe, we advise investors to sell on rallies and buy on dips towards 1340/1320 points.
• Today we peg resistance for the main index at 1370-1380 points and support at 1352-1337 points.

Indonesia

• The Jakarta Composite Index (JCI) ended with modest decline on Friday (22/11), as the Rupiah remained weak amid concerns that the US Federal Reserve may roll back its stimulus in its next meetings. The JCI trimmed 8.245 points, or 0.19%, to close at 4,317.960. Four of the nine major stock sectors finished in red, with miscellaneous industry sector (-1.21%) and property, construction and real estate sector (-0.96%) performed worst. The LQ45 index shed 1.123 points, or 0.16%, at 720.887.
• Concerns about the Fed tapering its bond purchase program have set off foreign capital outflows from Indonesia. The Rupiah, moreover weighed by current account deficit woe, has also been depreciating as the US dollar gained against its trading peers. 116 shares advanced and 103 shares declined Friday on the Indonesia Stock Exchange, where 2.55 billion shares worth IDR 3.21 trillion changed hands on the regular board. Foreign investors posted net purchase of IDR 61.2 billion.
• Indonesian stocks will likely move higher today, with positive leads from Wall Street on Friday and Asia this morning. Blue-chip bargain hunting would also help boost the Jakarta Composite Index today. We expect the JCI to trade higher, and peg the near-term support and resistance at 4,270 and 4,383, respectively.

Sri Lanka

• The last trading day of the week ended on a negative note resulting in the indices to re-enter the negative terrain. The benchmark ASPI lost 9.13 points (0.16%) to close the day at 5,792.72 and the S&P SL20 ended at 3,197.88 dropping by 4.31 points or 0.13%. As at the daily closure the total market capitalization stood at LKR 2.41Tn reducing the year to date gain to 11.17%. The market PER & PBV stood at 15.02x & 1.96x respectively. The aggregated turnover for the day amounted to record LKR 306.59Mn, indicating a drop of 67.67% from its previous trading day. Under the sectorial wrap-up, Bank Finance & Insurance (BFI) sector stood on top providing LKR 184.79Mn accounting a share of 60.27% of the day’s total turnover and Diversified Holdings (DIV) sector secured the second place contributing LKR 36.54Mn. With regard to the movement in share prices, price losers outpaced the price gainers by 103:54. Having recorded outflows for the past two trading days, foreign participants appeared to be bullish resulting in a net foreign inflow of LKR 5.01Mn. Foreign purchases of LKR 34.73Mn and sales amounted to LKR 29.73Mn.

Australia

• The Australian share market on Friday finished higher, bringing a four-day losing streak to an end due to good employment news from the United States. The benchmark S&P/ASX200 index was UP 47.6 points, or 0.9 per cent, higher at 5,335.9.
• Today (25/11/13), the Australian market looks set to open higher after Wall Street's S&P 500 closed above 1,800 for the first time and the Dow recorded a fresh record.
• No major economic news is expected on Monday.
• In equities news, Foxtel chief executive Richard Fraudenstein is slated to speak at an AMCHAM lunch in Sydney while ALS is expected to post first half results. 

Hong Kong

• HSI climbed 115 points or 0.49% to 23,696. CEI gained 115 points or 1.02% to 11,448. Trading volume decreased to HKD64.807 billion.
• Hong Kong market was firmer, tracking the strong US markets. For last week, HSI climbed 664 points or 2.9%. CEI out-performed with 746 points or 7% gain.
• China insurance sector kept led the benchmark up, Ping An (2318.HK) rose 3% to reach 2-year high. China Life (2628.HK) gained 2.7%.
• The rumor of natural gas sector reform sent China gas (384.HK) and Kunlun Energy (135.HK) up 3% and 0.4% respectively.
• China coal sector also out-performed with China Coal (1898.HK), China Shenhua (1088.HK) and Yanzhou Coal (1171.HK) up 1-3.2%.
• Technically, HSI broke the range between 22,500 and 23,500 last week with volume support, 14-RSI is at 60.95, no overbought signal shown. We expect HSI to be range bounded between 23,500 and 24,000 this week. The next resistance and support for HSI are 23,945 and 23,500 respectively.

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Morning Note
Company Highlights

Oversea-Chinese Banking Corporation announce that it has sold its entire 14.88% stake, comprising 85,830,457 ordinary shares of VND10,000 each, in the capital of Vietnam Prosperity Joint Stock Commercial Bank to a group of individuals, namely Ms Ngo Thu Thuy, Mr Huynh Ba Lan and Ms Pham Vu Thi Nhu Hoang (collectively, the “Purchasers”). OCBC Bank was approached by the Purchasers with a proposal to purchase the Sale Shares. OCBC Bank considered the proposed terms of purchase and decided to divest its entire 14.88% stake.The consideration for the Sale Shares was US$55.5 million (approximately S$69.3million) payable in cash, and was arrived at ona willing buyer and willing seller basis after taking into account the latest audited net assets value of VP Bank which was approximately  VND6,637 billion or S$389 million as at 31 December 2012. The sale is not expected to have a material impact on the net tangible assets or earnings per share of OCBC group for the current financial year. (Closing Price S$10.46, +0.5%)

Singapore Exchange (SGX) announced Yeo Lian Sim is retiring as Chief Regulatory & Risk Officer at the end of this year. At the same time, SGX is appointing new heads for its regulatory and risk management units as it prepares for the next lap as a leading international exchange. Effective 1 January 2014, SGX’s Regulatory function will be led by Richard Teng, as Chief Regulatory Officer and the Risk Management function will be led by Agnes Koh as Chief Risk Officer. (Closing Price: S$7.210, +0.1%)

Keppel Land Limited refers to its announcement dated 24 July 2013 in relation to the entry by its direct wholly-owned subsidiaries, Le-Vision Pte Ltd (“Le-Vision”) and Castlehigh Pte. Ltd. (“Castlehigh”), as vendors, PT Modernland Realty Tbk (“Modernland”) as purchaser, and William Honoris, as covenantor, into a conditional sale and purchase agreement for the sale to Modernland of the Keppel Land Group’s interest in the integrated township, Jakarta Garden City (the “Transaction”), comprising 3,610,290 fully paid shares of Rp. 100,000 each held by Le-Vision in PT Mitra Sindo Sukses (“MSS”), constituting 51% of the total issued share capital of MSS and 1,224,000 fully paid shares of Rp. 100,000 each held by Castlehigh in PT Mitra Sindo Makmur (“MSM”), constituting 51% of the total issued share capital of MSM. The Transaction was completed today. Consequently, the Keppel Land Group has ceased to have any interest in Jakarta Garden City, MSS and MSM. The Keppel Land Group realised a net gain of approximately S$149 million and received net proceeds of approximately S$237 million from the Transaction which was effected at the sale consideration of Rp. 2,294,360 million (approximately S$249 million). The net proceeds will enable Keppel Land to pursue other opportunities in Indonesia, with a focus on Jakarta.(Closing Price: $3.570, 0.830%)

SATS Limited announced that Singapore’s competition watchdog, having completed phase 1 of its review of its proposed acquisition of Singapore Cruise Centre, said it “is unable to conclude that the proposed acquisition would not raise competition concerns, based on information furnished during the phase 1 review.” The merger will proceed to phase 2 of the review after it receives necessary documentation from SATS. Phase 2 can take up to 24 weeks, said the Competition Commission of Singapore. (Closing price: S$3.09, +0.32%)

STX Pan Ocean Company Limited announced that the size of investment amount have been reduced from approximately US$0.8 billion to US$0.5 billion in respect of the shipbuilding of Open Hatch General Cargo Carriers and Kamsarmax bulkers because some portion of investment in shipbuilding has been changed to improve the financial structure as the Company has been under rehabilitation proceedings since 17 June 2013. (Closing price: S$1.52, -5.0%)

Sound Global Limited announced the incorporation of Xintai Sound Biqing Water Co Ltd in Xintai City, Shandong Province, the People’s Republic of China. The subsidiary is 75 per cent owned by Beijing Sound Environmental Engineering Co Ltd (Beijing Sound) and 25 per cent owned by Sound Global (Hong Kong) Limited (Sound Global HK). Beijing Sound and Sound Global HK are wholly owned subsidiaries of the Company. Separately, the company incorporated another subsidiary, Xintai Sound Zhengyuan Water Co Ltd in Xintai City, Shandong Province, the People’s Republic of China. (Closing price: S$0.715, -%)

ISDN Holdings Limited’s, through its wholly owned subsidiary, Aenergy Holdings Company Limited, plans to acquire a larger equity stake in the Datara mini hydropower project in South Sulawesi, Indonesia through a proposed joint venture agreement between Indonesia-based PT SDM and the Gowa Regency Government in Sulawesi. ISDN recently entered into a sales and purchase agreement to acquire 95% of PT SDM’s shares. ISDN through PT SDM, will when the joint venture company is established, own 76% of its share equity while the Gowa Regency Government will retain 20% ownership. The Datara mini hydropower project is targeted to have an installed base capacity of 10 megawatt (Closing Price: $0.540, 9.091%)

C&G Environmental Protection Holdings Limited announced that the potential purchaser in respect of a proposed sale of the Group’s PRC WTE Business and Assets is Nanhai Development Co. Ltd. The Purchaser is a public company listed on the Shanghai Stock Exchange, the PRC. The Purchaser is proposing to acquire the Group’s PRC WTE Business and Assets through the acquisition of 100% of the shareholding of C&G Environmental Protection (China) Company Limited, a wholly-owned subsidiary of C&G Environmental Protection (Hong Kong) Company Limited which is in turn a wholly-owned subsidiary of the Company. (Closing Price: $0.285, 3.636%)