STI: +0.25%% to 3180.65                          KLCI: +0.19% to 1797.97
JCI: +0.39%% to 4334.81                          SET: -0.46%% to 1352.86
HSI: -0.05%% to 23684                              HSCEI: -0.54% to 11387.21
Nifty: +2.00% to 6115.35                            ASX200: +0.32% to 5352.84
Nikkei: +1.54% to 15619                            S&P500: -0.13% to 1802.48

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

Singapore
Annual inflation gained momentum in October as consumer price index (CPI) rose to 2.0 percent compared to 1.6 percent in the preceding month. The higher CPI was mainly due to the increase in private road transport cost, which climbed 2.7 percent as a result of the pickup in COE premiums. Commenting on the COE premiums, the Trade and Industry Ministry and the central bank expect COE premiums to continue to be volatile in the near term as market adjusts to the pending re-categorisation of COEs.
 

Regional Market Focus

Singapore

• The benchmark STI closed 7.80 points higher at 3.180.65 (+0.25%). The 1.3bn shares traded were worth S$0.7bn in value.
• The FTSE ST Mid Cap Index declined -0.10% while the FTSE ST Small Cap Index declined -0.36%. The top active stocks were SingTel (-0.54%), DBS (-0.23%), Global Logistic Properties (-1.01%), Keppel Corporation (+0.18%) and Noble Group (+1.40%).
• 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 extended a losing streak for a fifth day on Mon amid persistent domestic political worries after anti-government protesters laid seize to the Ministry of Finance and Public Relations Department.
• Domestic political tensions heightened after some anti-government protesters seized two state ministries, prompting PM Yingluck Shinawatra last night to impose the Internal Security Act (ISA) in Bangkok, Bang Phli district of Samut Prakan Province and Lat Lum Kaeo district of Pathum Thani Province. Growing political jitters sent the Thai baht further lower to a new low of 32.04 to the US dollar in today’s early trade. In our view, political anxiety would continue to weigh on sentiment in the Thai stock market.
• Political heat looks set to rise further both inside and outside parliament as the censure debate against PM Yingluck Shinawatra and Interior Minister Charupong Ruangsuwan starts today. A close watch will also be kept on the National Anti-Corruption Commission (NACC)’s decision on petitions seeking to remove PM and 312 MPs and senators from office.
• Today we expect a trading range of between 1330-1365 points for the SET index. We also advise investors to limit equity holdings to around 25% of the short-term trading portfolio and take advantage of any market dips towards 1320 +/- to accumulate positions. 
• Resistance for the main index is expected at 1370-1390 points and support at 1340-1320 points today.

• Indonesian stocks ticked higher Monday (25/11), taking lead from upbeat session on Wall Street on Friday, and as investors expected deal between Iran and six major countries to ease prices of oil. But strength in US dollar put cap on stock gains Monday, with the Rupiah remained above 11,700 against the greenback. The Jakarta Composite Index (JCI) climbed 16.843 points, or 0.39%, to close at 4,334.803. Gains on Monday included four of the 9 main sectors, led by mining sector that advanced 1.77%, followed by finance sector with 1.34%-gain, and trade, services and investment sector with 0.95%-rise. The LQ45 index added 2.708 points, or 0.38%, at 723.595.
• Oil imports have been the major contributing part to Indonesia’s current account deficit. With oil prices declining amid speculations that easing tension in the Middle East would drive world oil supplies higher, investors saw an unexpected remedy to Indonesia’s widening current account deficit. Gainers outpaced decliners 152 to 94 Monday on the Indonesia Stock Exchange, where 2.57 billion shares worth IDR 3.08 trillion traded on the regular board. Foreign investors posted net sale of IDR 2.34 billion.
• The Jakarta Composite Index (JCI) will likely trade in sideways channel today, as limited movements on Wall Street overnight provide little cues. We expect the JCI to edge modestly higher, with support and resistance at 4,294 and 4,350, respectively.

• The trading day concluded on an adverse sentiment again, leading the indices to drown further and extended its losses. The market exhibited a downward trend mainly on the latter part of the day to close at 5,775.67, experiencing a loss of 17.05 points or 0.29% while falling to a lowest level after 18 September 2013. The S&P SL20 index dropped by 14.94 points or 0.47% to settle the day at 3,182.94. Furthermore, the lazy participation of the investors and the prevailed selling pressure resulted in the second lowest turnover being logged for the year; the daily turnover amounted to LKR 193.49Mn (drop of 36.89% compared to the previous trading day), indicating its lowest post to 17th July. As at the daily closure the total market capitalization stood at LKR 2.40Tn, reducing the YTD gain to 10.86%. The market PER and PBV were 14.98x and 1.96x respectively. The total number of shares traded amounted to 27.36Mn, resulting in a drop of 24.81% as against its previously recorded. Under the sectorial round-up, TLE & BFI collectively accounted to more than half of the day’s total turnover. Telecommunications sector (TLE) stood on top providing LKR 53.21Mn (28.00% of the turnover) and Bank Finance & Insurance sector (BFI) made a contribution of LKR 47.53Mn. With regard to the movement in share prices, 54 companied gained whereas 117 companies witnessed drops in shares prices. Foreign participants commenced the week on a bearish note recording a net foreign outflow of LKR 11.98Mn, resulting in the year to date net foreign inflow to fall to LKR 22.65Bn.  Foreign selling for the day amounted to LKR 45.12Mn and buying was recorded as LKR 33.14Mn. The local FOREX markets for the day closed with the USD selling at LKR 132.76/- and buying at LKR 129.50/-.

• The Australian share market on Monday gained thanks to continued positive momentum on Wall Street. The benchmark S&P/ASX200 index rose 15.8 points, or 0.3 per cent, to 5,346.1.
• Today (26/11/13), the Australian market looks set to open flat despite gains on international markets after Iran struck a landmark deal on its nuclear program that will see sanctions eased on the key oil exporter. The accord reached over the weekend in Geneva sent crude futures lower in Monday trading, weighing on share prices in energy groups but considered a boost to business, especially fuel-hungry airlines, on anticipation of lower costs.
• In economic news on Tuesday, Reserve Bank of Australia deputy governor Philip Lowe is scheduled to deliver the  keynote address at an International Association for Research on Income and Wealth (IARIW) and University of New South Wales (UNSW) Conference.
• In equities news, Aristocrat Leisure is expected to post full year results while Woolworths, Harvey Norman, Brickworks, IOOF, Ridley Corporation, Challenger and Kingsgate Consolidated have annual general meetings scheduled.

• HSI dropped 11 points to 23,684. CEI slipped 61 points or 0.54% to 11,387. Trading volume decreased to HKD57.561 billion.
• HK market swung between gain and loss yesterday. Tencent (700.HK) gained 3.2% but Sinopec (386.HK) led declines after a deadly pipeline explosion.
• The rumor that mainland property developers accumulated unpaid land value-added tax of RMB3.8 trillion sent R&F Properties (2777.HK), Hopson Dev Hold (754.HK) and Agile Property (3383.HK) down 1.4%, 1.6% and 2.6% respectively.
• China Airline sector under-performed with Air China (753.HK), China East Air (670.HK) and China South Air (1055.HK) slipped 2.3-4.7%.
• Bauhaus Int’t (483.HK) slumped 14.4% after interim results with net profit climbed 55.3% YoY but still missed analysts’ estimate.
• Technically, we remain biased HSI will be bounded between 23,500 and 24,000 in short term. The next resistance and support for HSI are 23,945 and 23,500 respectively.

Morning Note
Company Highlights

Keppel Corporation Limited announced that it has in conjunction with the National University of Singapore (NUS) set up the Keppel-NUS Corporate Laboratory, in collaboration with the National Research Foundation (NRF), Prime Minister’s Office, Singapore. The laboratory, which will be based at the NUS Faculty of Engineering, will be established with an investment amount of S$75million. (Closing price: S$11.18, +0.179%)

AIMS AMP Capital Industrial Reit has signed a conditional agreement with a Stockland managed fund, Stockland Direct Office Trust No. 2, to acquire a 49 per cent stake in Optus Centre for A$184.4 million (S$215 million). Optus Centre is a premium business park at Macquarie Park in Sydney's north. It is 100 per cent leased to Optus Administration Pty Ltd - a unit of SingTel Optus, the second largest telecommunications company in Australia - for a weighted average lease term of 8.6 years with fixed annual escalation of three per cent. This is the Reit's first investment in Australia. According to its website, all the properties in its portfolio so far are located in Singapore. CBRE, in its October 10, 2013 report had valued the property at A$377 million in the open market. The value of a 49 per cent stake would therefore work out to A$184.7 million - on par with the Reit's purchase price. (Closing price: $1.50, -1.639%)

COSCO (Qidong) Offshore, a subsidiary of Cosco Corporation's 51 per cent owned subsidiary Cosco Shipyard Group, was awarded contracts each in excess of US$200 million, for the engineering, procurement and construction of two semi-submersible accommodation vessels. The vessels Safe Notos and Safe Eurus are scheduled for delivery in 2016. They will be of Gusto MSC Ocean 500 design and will be equipped with 500 beds, DP3 station keeping systems, 10-point chain mooring and 300 ton cranes. The company said that this will allow for operations in both DP and anchored mode, providing maximum cost efficiency and flexibility. (Closing price: S$0.72, +0.699%)

Yongnam Holdings said that it had secured a record $168 million subcontract through its wholly owned subsidiary, Yongnam Engineering & Construction Pte Ltd. Yongnam will fabricate and construct a record of almost 30,000 tonnes of structural steelwork for Marina One, a mixed-use development located at Marina South, Singapore's new Central Business District. (Closing price: S$0.24, -%)

Freight Links Express Holdings Limited announced that the company name, Freight Links Express Holdings Limited, has been changed to Vibrant Group Limited following shareholders’ approval at the Extraordinary General Meeting held this morning. (Closing price: S$0.105, -%)

Source: PhillipCapital Research - 26 Nov 2013