STI:       -0.05%    to    3,172.06            KLCI:        +0.02%    to    1,798.46
JCI:      +0.38%    to    4,251.49           SET:           +1.06%    to    1,373.11
HSI:      +0.53%    to    23,806.35         HSCEI:      +0.88%    to    11,401.96
Nifty:     -0.03%    to    6,057.10           ASX200:     -0.45%    to    5,332.88
Nikkei:  -0.42%    to    15,449.63         S&P500:     -0.42%    to    15,449.60

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA
Bookings for goods meant to last at least three years decreased 2 percent, matching the median forecast of economists surveyed by Bloomberg, after a 4.1 percent gain in September that was larger than initially reported, the Commerce Department reported today in Washington. Orders for aircraft and capital goods, such as machinery and computers slumped.

The Thomson Reuters/University of Michigan final index of consumer sentiment in November unexpectedly rose to 75.1 from 73.2 a month earlier. The median forecast of 65 economists surveyed by Bloomberg called for 73.1 after a preliminary reading of 72. Forecasts ranged from 71 to 75.2. The index averaged 89 in the five years before December 2007, and 64.2 in the 18-month recession that ensued.

The Conference Board’s gauge of the economic outlook for the next three to six months increased 0.2 percent last month after a 0.9 percent jump in September that was more the previously reported, the New York-based group said today. The median forecast of economists surveyed by Bloomberg called for no change.

Jobless claims in the week ended Nov. 23 declined 10,000 to 316,000, the fewest in two months, the Labor Department said today in Washington. The median forecast of 44 economists surveyed by Bloomberg called for an increase to 330,000.

Thailand
Trade balance turned red in October as Thailand recorded a trade deficit of $1.77 billion following a surplus of $473.3 million, said the Ministry of Commerce. Both exports and imports decreased annually over the month, marking -0.7 percent and -5.37 percent respectively. For the January to October period, the country logged a trade deficit of $19.44 billion as exports contracted 0.02% on-year to $191.53 billion while import expanded 1.40% on-year to $210.97 billion.

Bank of Thailand lowered its policy interest rate by 25 basis points to 2.25 percent, citing a poor economic outlook and escalating political tension which hurt investor confidence and local demand.
 

Regional Market Focus

Singapore

• The benchmark STI closed 1.45 points lower at 3.172.06 (-0.05%). The 1.6bn shares traded were worth S$0.8bn in value.
• The FTSE ST Mid Cap Index declined -0.41% while the FTSE ST Small Cap Index declined -0.26%. The top active stocks were SingTel (+1.90%), Noble Group (-0.89%), Global Logistic Properties (-0.68%), DBS (-0.59%) and Keppel Corporation (+0.36%).
• 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 regained ground in the afternoon trade on Wed after the Bank of Thailand’s Monetary Policy Committee cut its policy interest rate by 25 bps to 2.25%, helping PROP counters to outperform other sectors. The composite SET index finished the session up 1.06% on Wed. 
• Economic data painted an upbeat picture for the US economy after the number of Americans filing new claims for unemployment aid last week fell to a two-month low and US consumer sentiment rose in Nov. Encouraging data also lifted sentiment in Asia. Thai stocks may follow overseas markets higher today but the room for further upside seems limited after anti-government protest leader Suthep Thaugsuban changed game plan to a prolonged street protest from its earlier plan to end the protest by the end of this month. As a result, we think the protracted protest would continue to put sporadic pressure on the market.
• Foreign selling spree continued unabated in the Thai stock market. Yesterday net foreign sell-off of Thai shares remained heavy to the tune of over Bt4bn. For short-term strategy, selective trading is advised with a ‘sell the rallies and buy the dips’ approach in a trading range of 1360-1390 points. In our view, PROP counters look attractive today, benefiting from the Bank of Thailand’s interest rate cut. 
• Resistance for the SET index is pegged at 1380-1400 points and support at 1360-1340 points today.

• The Jakarta Composite Index (JCI) ended with moderate gain Wednesday (27/11), as hopes on China’s economic reform buoyed sentiment in Asia. But gains were capped in Indonesia as the Rupiah depreciated further against the US dollar. The benchmark index of Indonesian stocks rose 16.228 points, or 0.38%, rebounding from sharp decline a day earlier, to close at 4,251.489. Shares in infrastructure sector fared best on Wednesday, with the sector’s index up 2.58%, followed by construction sector with 1.11%-gain, and consumer goods sector with 0.83%-advance. Blue-chip shares mostly climbed, producing 4.284 points, or 0.61% for the LQ45 index that closed at 704.497.
• President Susilo Bambang Yudhoyono on Wednesday said the economy is expected to grow 5% in the fourth quarter if the US Federal Reserve starts scaling back its stimulus program. Indonesia’s GDP in the third quarter expanded 5.62%. Five percent growth would be the lowest in four years. Advancers slightly outran decliners 117 to 115 Wednesday on the Indonesia Stock Exchange, where 2.79 billion shares worth IDR 3.75 trillion traded on the regular market. Foreign investors’ transactions accumulated to a net purchase of IDR 145.15 billion.
• The Jakarta Composite Index (JCI) will likely trade higher today, taking leads from upbeat finish on US markets overnight, and positive starts in Asia this morning. We expect the JCI to trade higher today, and peg its near-term support and resistance at 4,196 and 4,300, respectively.

• The trading day concluded on an adverse sentiment, leading the indices to fall further and extended its losses for the fourth consecutive trading day. The benchmark ASPI closed the day at 5,744.67 (losing minute 3.34 points or 0.06%), just 5 points above its intraday low (5,740.29).The S&P SL20 closed the day at 3,162.52, losing 6.17 points or 0.19%. With regard to the movement in share prices, price gainers surpassed the price losers by 86:74.  The turnover for the day amounted to LKR 836.51Mn, charting a gain of 80.02% compared to the previous trading day; But, nearly 3/4 of this was accounted by the three prime contributors for the day. During the day a total of 110.79Mn shares changed hands resulting in a drop of 22.69% against the previous day. Under the sectorial round-up, Bank Finance & Insurance (BFI) sector stood on top providing LKR 461.40Mn and Land & Property (L&P) sector emerged second contributing LKR 153.40Mn. Notably, the two sectors DIV & BFI collectively accounted to 73.49% of the daily aggregated turnover. Foreign participants maintained their bearish stance for the 3rd consecutive trading day, resulting in net foreign outflow of LKR 46.37Mn, being a result of foreign sales worth LKR 133.69Mn and buying which amounted to LKR 87.32Mn. The year to date foreign inflow currently stands at 22.55Bn. With regard to the local FOREX, the rupee continued to depreciate against the USD recording a highest selling rate post to 7 Oct 2013.  Currently the USD is selling at LKR 132.87/- selling.

• The Australian share market on Wednesday lost ground as commodity price weakness led to losses among the big miners. The benchmark S&P/ASX200 index shed 25.7 points, or 0.48 per cent, to 5,324.9.
• Today (28/11/13), the Australian market looks set to open higher following Wall Street's rise after on the back of mixed economic data on the eve of the Thanksgiving holiday. Wall Street's gains came despite a disappointing report on durable goods, which dipped two per cent in October due to a big drop in transportation orders and a decline of 0.1 per cent outside of transportation. Meanwhile, first-time claims for US unemployment benefits fell 10,000 last week to 316,000.
• In local economic news on Thursday, the Australian Bureau of Statistics releases Private New Capital Expenditure and Expected Expenditure data for the September quarter.
• In equities news, Seek and Linc Energy have annual general meetings scheduled.

• HSI was up 125 points or 0.53% to 23,806. CEI gained 99 points or 0.88% to 11,401. Trading volume was HKD69.031 billion.
• Hong Kong market was firmer, led by strong China markets. CSI300 and SSE Composite gained 1.1% and 0.8% respectively.
• China Mobile (941.HK), market heavyweight, climbed 1.6% on rumor that 4G license will be delivered this week.
• TCC Int’l Hold (1136.HK) surged 23.9% as its parent made a buyout offer. Other cement stocks also out-performed on rising cement prices. Westchinacement (2233.HK), Chinares Cement (1313.HK) and BBMG (2009.HK) rose 6.8%, 4.4% and 3.9% respectively.
• China auto sector out-performed on new energy car promotion. GAC Group (2238.HK) and BYD Company (1211.HK) climbed 4.8% and 2.5% respectively.
• CIMC ENRIC (3899.HK) dropped 4.4% after a major shareholder reduced shares with 7.1% discount.
• 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 that its electronics arm, Singapore Technologies Electronics Limited (ST Electronics) has set up a wholly owned subsidiary, ST Electronics (Thailand) Limited, in Thailand with a paid up capital of Thai Baht 120,000,000 (aboutS$4.8m). It will offer ST Electronics’ transportation and advance electronics solutions in Thailand. (Closing price: S$4.00, 0.5%)

OXLEY Holdings has sold S$100 million three-year bonds, its sixth debt issuance this year. The bonds were priced at 5.10 per cent, and orders were in excess of S$120 million, DBS Bank said on Wednesday. Private bank clients made up 98 per cent of investors while 99 per cent of the issue was sold in Singapore. Including the latest issue, the property company has this year raised S$600 million from the local debt market. (Closing price: S$0.455, -%)

China Yuanbang Property Holdings Limited announced that its wholly-owned subsidiary,  Rich Luck Group Limited has incorporated a wholly-owned subsidiary known as Rushan Fuyunlai Industry Co Limited (RSFYL) in the People’s Republic of China. The principal activity of RSFYL is that of tourism development and property management. The registered capital of RSFYL is US$10 million. The proposed paid-up capital of USD10 million will be made in two tranches of US$2million in three months’ time and US$8 million by November 2015 respectively. (Closing price: S$0.245, -2%)

Source: PhillipCapital Research - 28 Nov 2013