STI: --0.22 to 3173.51                                KLCI: +0.01% to 1798.13
JCI: -2.30% to 4235.26                             SET: +0.43% to 1358.69
HSI: -0.01% to 23681                                HSCEI: -0.75% to 11302.03
Nifty: -0.92% to 6059.1                             ASX200: +0.08% to 5357.01
Nikkei: -0.67% to 15515.24                     S&P500: +0.01% to 1802.75

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA
Building permits increased 6.2 percent in October to a 1.03 million annualized rate, the most since June 2008, after a September pace of 974,000, figures from the Commerce Department showed today in Washington. The median estimate of 47 economists surveyed by Bloomberg was for a 930,000 rate.

Confidence among U.S. consumers unexpectedly declined in November to aseven-month low as Americans grew more pessimistic about the labor-market outlook. The Conference Board’s index fell to 70.4 from a revised 72.4 a month earlier that was stronger than initially estimated, the New York-based private research group said today. The median forecast in a Bloomberg survey of 78 economists called for a November reading of 72.6.

Singapore
Industrial production increased at a slower rate in October at 8.0 percent y-o-y after a revised 9.2 percent y-o-y gain in the preceding month, according to Economic Development Board of Singapore (EDB). The slower growth pace is mainly due to a contraction in the biomedical manufacturing cluster, which fell 2.3 percent during the month.Excluding biomedical industry, output rose 10.4 percent with a robust 22.8 percent growth in electronics industry, an 8.9 percent growth in transport engineering industry and a 5 percent growth in the precision engineering industry.

On a seasonally-adjusted month-on-month basis, industrial production was unchanged in October.

Hong Kong
Hong Kong registered a visible trade deficit of HKD31.8 billion in October following a HKD42.0 billion short in September, despite a pickup in export growth, said the Census and Statistics Department. The value of exports of goods climbed 8.8 percent on-year driven by higher re-exports, while value of imports of goods increased 6.3 percent on-year. Annual growth for exports and imports in September are 1.5 percent and 0.4 percent respectively.
 

Regional Market Focus

Singapore

• The benchmark STI closed 7.14 points lower at 3.173.51 (-0.22%). The 1.7bn shares traded were worth S$1.0bn in value.
• The FTSE ST Mid Cap Index gained +0.20% while the FTSE ST Small Cap Index gained +0.96%. The top active stocks were Noble Group (+2.75%), SingTel (unchanged), Hutchison Port Holdings Trust (-1.45%), DBS (+0.29%) and Golden Agri-Resources (+1.74%).
• 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 staged a technical rebound after five straight sessions of losses. The composite SET index finished the session up 5.83 points to 1,358.69 points on Tue boosted by buying in ICT counters.  
• Domestic political situation remained tense after the Criminal Court yesterday approved an arrest warrant for anti-government protest leader Suthep Thaugsuban for illegal assembly and invasion of government offices and no end to anti-government protests seemed to be in sight. Today anti-government protesters will further extend their rally to other government offices to seek cooperation from civil servants to go on strike.
• Under this circumstance, Thai stocks look poised for a pullback today amid rising political pressure. Net foreign selling of Thai shares swelled to the tune of Bt9,297mn yesterday, taking MTD net foreign sales to Bt40bn. Not only did political jitters take a toll on the stock market, business sector also felt the direct impact from political uncertainty after UK, US and China issued travel warnings to their citizens to avoid traveling to Thailand, a move that might deal a blow to tourism and fourth-quarter GDP. As it stands, we advise investors to wait and see how the political situation will unfold. For short-term trading, the strategy is to sell the rallies and buy the dips within a trading range of 1335-1375 points today.
• We peg resistance for the SET index at 1370-1390 points and support at 1340-1320 points today.

• The Jakarta Composite Index (JCI) dropped on Tuesday (26/11), as the Rupiah sank after the government missed its dollar denominated bond sale target. The JCI plunged 99.542 points, or 2.30%, to 4,235.261. The significant drop on Tuesday included all nine major stock sectors, with infrastructure shares fared worst as the sector’s index plummeted 3.12%, followed by miscellaneous industry sector that fell 2.98%, and finance sector declined 2.85%. LQ45, the index measuring Indonesia’s blue-chip shares, slipped 23.382 points, or 3.23%, to end at 700.213.
• Stocks sank in Jakarta after Monday’s bond-sale raised less than half of its original USD 450 million target, signaling lack of investors’ confidence in the economy. The ministry of finance could only raise USD 190 million from the sale of debts that mature in May 2017. Investors submitted USD 293.55 million of bids in the auction, with desired yields between 3.15% - 5.75%. The Rupiah briefly touched a record low of 11,800, before rebounding back to 11,765. Decliners outran gainers 209 to 58 Tuesday on the Indonesia Stock Exchange, where 5.21 billion shares worth IDR 7.69 trillion changed hands on the regular board. Foreign investors posted net sale of IDR 54.54 billion.
• The Jakarta Composite Index (JCI) may continue to move with negative bias today, following little leads from US markets overnight. On the upside, US dollar drop may provide grounds for the Rupiah and the JCI. We expect the JCI to consolidate today, with near-term support and resistance at 4,170 and 4,365, respectively.

• Witnessing yet another losing day, the Colombo bourse stretched further into the red terrain resulting the indices to close on a negative note. The benchmark ASPI closed at 5,748.01, losing 27.66 points or 0.48%. The S&P SL20 ended the day at 3,168.69, dropping by 14.25 points or 0.45%. As at the daily closure the total market capitalization reduced to LKR 2.39Tn, indicating a year to date gain of 10.33%. The market PER & PBV were 14.91x & 1.95x respectively. The aggregate turnover for the day amounted to LKR 464.69Mn, indicating a momentous rise of 140.17% against the previous trading day. The daily traded volume amounted to 143.30Mn shares, indicating a noteworthy gain of 423.72% against the previous trading day. Price losers outpaced the price gainers by 135:38. Foreign Investors appeared to be bearish for the second consecutive trading day, resulting in a net foreign outflow of LKR 49.38Mn being logged, whilst reducing the year to date net foreign inflow to LKR 22.60Bn. Foreign selling for the day amounted to LKR 156.63Mn, and buying amounted to LKR 107.25Mn. Looking at the local FOREX markets, the USD is currently selling at LKR 132.77/- and buying at LKR 129.51/-.

• Australian shares inched up 0.1 per cent on Tuesday in subdued trade, capped by a lacklustre session on Wall Street, the absence of catalysts and policymakers' discomfort over the current level of the Australia dollar.
• The S&P/ASX 200 index rose 4.2 points to finish at 5,357.0. The benchmark advanced 0.3 per cent on Monday.
• New Zealand's benchmark NZX 50 index fell 0.5 per cent or 23.1 points to finish the session at 4,790.8. (Source: Reuters)

• HSI lost 3 points to 23,681. CEI declined 85 points or 0.75% to 11,302. Trading volume increased to HKD67.4 billion.
• Hong Kong market had little changed yesterday in narrow trade. We remain the view that the benchmark index is consolidating recent gains since 18 Nov.
• Sinopec (386.HK) led HSI down and dropped 2.6% on the pipeline blast accident.
• China dairy sector under-performed with CH Modern D (1117.HK) and Huishan Dairy (6863.HK) lost 3.4% and 2.6% respectively. YST Dairy (1431.HK), a raw milk manufacturer in China, was 4.4% lower than its issue price on first listing day.
• China pharmaceutical stocks under-performed on rumor that cheap drug list will be announced. Sihuan Pharm (460.HK) and Trad Chi Med (570.HK) slipped 2.8% and 3% respectively.
• L’OCCITANE (973.HK) declined 2.5% after interim results with net profit declined 57.9% yoy.
• Cinda Intl HLDG (0111.HK) climbed 4.2% after surge of 37.9% in previous day as it provides corporate finance advisory and underwriting services for the coming IPO, Cinda Asset Management.
• 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

Singapore Technologies Engineering Limited announced its unit, VT Halter Marine clinched a shipbuilding contract from Florida’s Crowley Maritime Corporation to build two ConRo vessels worth about US$350 million. The ConRo vessel, short for container roll-on/roll-off vessel, measures 219.5m in length and 32.3m in width with 10m depth. Both vessels will be built at the Pascagoula facility in the US, with construction starting in the first half of 2014 and deliveries expected in mid and late 2017. (Closing price: S$3.98, -1.241%)

Global Logistic Properties Limited announced it has signed a lease agreement for 13,000 square meters (sqm) with Geodis Group (Geodis), one of the world’s largest supply chain solutions providers, at GLP Park Suzhou, Eastern China. Including the lease agreement announced today, Geodis leases a total of 46,000 sqm (495,000 sq ft) with GLP across three cities in China and Brazil. (Closing price: S$2.93, -0.678%)

International Healthway Corporation Limited announced it has been selected to be a constituent stock of the Morgan Stanley Capital International (MSCI) Global Small Cap Indices, effective as of November 27, 2013 in Singapore. (Closing price: S$0.37, +8.824%)

China Print Power Group Limited announced that its indirect wholly-owned subsidiary Goldlink Capital entered into a conditional sale and purchase agreement to acquire 60 per cent equity interest in British Virgin Island-based gas company Focus On Group for about HK$55 million. This is an investment opportunity for China Print Power Group, and will allow it to tap on the growing natural gas industry in China, it said in an announcement. (Closing price: S$0.31, -%)

Vallianz Holdings Limited announced that it has been awarded US$150 million worth of chartering contracts by a leading company in the Middle East. Platform Supply Vessels (PSVs) will be chartered out from the first quarter of 2014 for 5 years, including option of extension. (Closing pirce: S$0.091, +9.639%)

Cedar Strategic Holdings Limited announced its newly-acquired subsidiary Guiyang Shunhe has in November gained around RMB36 million (S$7.4 million) from the sale of over 7,416 sqm of commercial units in its development project ‘Xiao Cheng Gu Shi’ in China’s Guiyang City. In October, the group acquired Hong Kong-based Trechance Holdings, and 100 per cent equity interest in four companies under the Trechance Group in China – Guiyang Shunhe, Guizhou Sino-Excel Investment Management, Guizhou Shengxiang Investment Management and Guizhou Huamao Asset Operation Management – which are focused on property development and property investment in China’s Guizhou Province. (Closing price: S$0.005, +25%)

Source: PhillipCapital Research - 27 Nov 2013