STI:     -0.31%    to 3,176.35    KLCI:    +0.28%    to 1,812.72
JCI:    +0.53%    to 4,256.44    SET:    +0.86%    to 1,371.13
HSI:    +0.39%    to 23,881.29    HSCEI:    +0.49%    to 11,441.27
Nifty:    +1.38%    to 6,176.10    ASX200: -0.27%    to 5,320.05
Nikkei:    -0.41%    to 15,661.87    S&P500: -0.08%    to 1,805.81

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

Eurozone
Euro-area inflation stayed below 1 percent for a second month, less than half the European Central Bank’s ceiling. The annual rate rose to 0.9 percent from 0.7 percent in October, the European Union’s statistics office in Luxembourg said in a preliminary estimate today. The median forecast in a Bloomberg News survey of 44 economists was for 0.8 percent. Separately, unemployment unexpectedly dropped to 12.1 percent.

South Korea
South Korea’s exports slowed last month as demand from Southeast Asian nations fell and the won’s advance weighed on exporters’ price competitiveness. Overseas shipments rose 0.2 percent in November from a year earlier, down from a revised 7.2 percent gain the previous month, the Ministry of Trade, Industry and Energy said in an e-mailed statement today. The median estimate in a Bloomberg News survey of 12 economists was for a 3 percent increase.

Thailand
Thailand’s current account reversed and posted a surplus of $376 million in October after a deficit of $534 million in September, despite exports fell 0.5 percent in October from a year earlier. Imports fell 4.6 percent. Exports are yet to recover in line with improving global demand, commented Bank of Thailand.

India
India's economy growth accelerated slightly in the three months through September, logging a 4.8 per cent y-o-y growth, buoyed by an uptick in agriculture, according to government’s data. Agriculture output expanded 4.6 percent from a year ago while manufacturing output remained anemic with only 1 percent higher.

China
China’s November purchasing managers' index (PMI) steadies at 51.4, the same as October’s and maintained its 19-month high, according to the National Bureau of Statistics. The encouraging PMI was mainly due to a stronger production which its sub-index was up 0.1 point from October to 54.5. However, the sub-index for new orders fell 0.2 points to 52.3 and business outlook was down by 2.6 points from a month earlier to 54.9 in November, with both still above 50 despite contraction.
 

Regional Market Focus

Singapore

• The Straits Times Index (STI) ended 10.02 points lower or -0.31% to 3,176.35, taking the year-to-date performance to +0.29%.
• The FTSE ST Mid Cap Index gained +0.12% while the FTSE ST Small Cap Index declined -0.10%. The top active stocks were SingTel (-0.54%), DBS (+0.23%), UOB (-1.27%), OCBC Bank (-0.57%) and Keppel Corporation (+0.27%).
• We peg key near term support at 3,150 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 advanced in the afternoon session last Fri before the SET index ended the day up 11.68 points at 1,371.13 points while heavy foreign selling of Thai shares continued unabated amid lack of political clarity. 
• Today the SET index may succumb to selling pressure at the open after violence erupted last weekend after clashes between anti-government protesters and pro-government red-shirt supporters killed Ramkhamhaeng University students and police hurled tear gas canisters at a crowd of anti-government protesters. Last night Suthep Thaugsuban, secretary general of the People’s Democratic Reform Committee (PDRC) told a press conference after the meeting with PM Yingluck Shinawatra and all armed forces leaders that the resignation of the PM and a House dissolution was not enough to satisfy the protesters and he gave PM Yingluck Shinawatra an ultimatum of two days to return power to people.
• This week PMI data is due out from many key countries, a key factor to be watched closely by investors especially in the US to look for clues on QE tapering.
• Foreign selling spree continued in the Thai stock market. Domestic political situation remained tense amid heightened protests. Initial support for the SET index is seen at 1340 points.
• Today we peg resistance for the SET index at 1380-1400 points and support at 1360-1340 points.

• The Jakarta Composite Index (JCI) advanced Friday (29/11), in a volume-muted session after the US markets closed for Thanksgiving, but with support from stronger Rupiah after Bank Indonesia intervened on the country’s currency. The JCI rose 22.511 points, or 0.53%, to 4,256.436. Seven of its nine major industry groups finished in green, led by agriculture sector with 2.18%-gain, followed by construction sector with 1.27%-advance, and mining sector with 0.99%-rise. The LQ45 index added 2.506 points, or 0.36%, to end at 704.885.
• On Friday, the Rupiah traded below 12,000 after Bank Indonesia intervened to keep the weakening currency below the important psychological level. Volume was muted, as little lead was provided after Wall Street’s close for Thanksgiving on Thursday. Investors also stayed on the sideline ahead of a row of economic data slated for release on Monday (02/12), which includes Indonesia’s inflation, trade balance, and consumer confidence index.
• Consumer prices that include volatile food and energy climbed 8.32% year-on-year in October, from 8.4% a month earlier. In the same month, consumer confidence index released by Bank Indonesia stood at 109.5, slightly up from 107.1 in September. Trade balance in September amounted to a deficit of USD 657 million. Gainers outpaced decliners 160 to 87 Friday on the Indonesia Stock Exchange, where 2.73 billion shares worth IDR 2.79 trillion changed hands on the regular board. Foreign investors’ transactions accumulated to a net purchase of IDR 121.83 billion.
• Indonesian stocks will likely trade with moderate moves today, as investors may step aside ahead of a row of economic data scheduled for release later in the day, with lack of leads from global markets. We expect the Jakarta Composite Index (JCI) to consolidate today, and move within 4,206 – 4,282 range.

• The Colombo bourse ended the trading day on a positive note, adding further to the gain recorded on the crossing abundant previous trading day.  The ASPI extended gains for the second consecutive trading day and settled at 5,775.09 with a gain of 22.89 points. The S&P SL20 gained 11.04 points or 0.35% to settle at 3,174.63. The total market capitalization as at the day’s closure moved up to LKR 2.40Tn, extending the year to date gain to 10.85%. The market PER and PBV were 14.98x & 1.96x respectively. The daily aggregated turnover amounted to record LKR 254.12Mn, indicating a drop of 64.65% as against previous day. Under the sectorial round-up, Bank Finance & Insurance (BFI) sector topped the list providing LKR 75.24Mn and Diversified Holdings (DIV) sector stood next in line providing LKR 40.75Mn. The two sectors BFI & DIV collectively accounted to nearly half of the daily turnover. A total of 37.76Mn shares changed hands during the day resulting in a dip of 45.17% compared to the previous trading day. Foreign participants appeared to be bullish for the first time during the week recording a net foreign inflow of LKR 36.31Mn. Foreign buying for the day amounted to LKR 68.61Mn and foreign sales for the day were LKR 32.30Mn. The year to date net foreign inflow currently stands at LKR 22.58Bn.

• The Australian share market on Friday closed slightly lower on a day marked by a sharp fall in GrainCorp shares after the federal government blocked a foreign takeover. The benchmark S&P/ASX200 index dropped 14.3 points, or 0.27 per cent, to 5,320 points.
• Today (02/12/13), the Australian market looks set to open lower after Wall Street closed mostly lower in a Thanksgiving public holiday shortened session.
• In economic news on Monday, the Reserve Bank of Australia (RBA) releases the index of commodity prices for November. The Australian Bureau of Statistics is due to release building approvals figures for October and the business indicators for the September quarter. Meanwhile, the Dun and Bradstreet business expectations survey and the Australian Industry Group performance of manufacturing (PMI) index for month just ended are due out, as are the TD Securities-Melbourne Institute inflation gauge for November and the RP Data-Rismark Home Value Index for October. NAB is due to release its online retail sales index.
• In equities news, Metcash is expected to post first half results.

• HSI climbed 92 points or 0.39% to 23,881. CEI rose 55 points or 0.49% to 11,441. Trading volume decreased to HKD48.122 billion.
• HK market was firmer on Friday, but in narrow trade and with low trading volume after US market closed for Thanksgiving holiday.
• Shipping stocks out-performed as BDI surged more than 9%. China Ship Dev (1138.HK), CSCL (2866.HK) and China Cosco (1919.HK) gained 8.2%, 5% and 4.5% respectively.
• Netdragon (777.HK) lost 6.7% after posting the third quarter results with net profit dropped 22% qoq. Tencent (700.HK) gained 1.4%.
• Phoenixhealth (1515.HK) was 35.5% higher than its issue price on first listing day.
• CEC Int’l Hold (759.HK) gained 13.8%. The share price surged 187.2% for November on its expansion to cosmeceutical business
• 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 24,000 and 23,500 respectively.

Morning Note
Company Highlights

TEE Land Limited wishes to announce that Teematic Private Limited, a 75.1% owned subsidiary of the Group, has incorporated a wholly-owned subsidiary, Workotel Limited. Workotel is incorporated in New Zealand and has an initial paid up capital of NZD1,000. The principal activity of Workotel will be to manage mid-term workers accommodation in Christchurch. (Closing price: S$0.335, +1.515%)

Wing Tai Holdings Limited wish to announce that Winmine Investment Pte. Ltd. (a subsidiary of the Company) has been awarded the tender for a leasehold land parcel Plot 17/2, Huai Hai Middle Road Precinct No. 45 in Shanghai Huangpu District having an approximate site area of 8,593.9 square metres (the “Land”) at the price of RMB1,104,000,000. Following the award of the tender, Winmine will incorporate a new company in Huangpu District to develop the Land as an office cum retail development. (Closing price: S$2, 0%)

Singapore Technologies Engineering Ltd announced on 29 Nov 2013 that its electronics arm, Singapore Technologies Electronics Limited (ST Electronics) has set up a wholly owned subsidiary, ST Electronics Tianjin Co., Ltd in Tianjin Eco-City, China with a paid up capital of RMB 10m (about S$1.97m). ST Electronics Tianjin is wholly owned by ST Electronics (Shanghai) Co., Ltd, a wholly owned subsidiary of ST Electronics. ST Electronics Tianjin will provide eco-enabling ICT solutions that will contribute towards better management of resources and the sustainability of Tianjin Eco-City and the surrounding regions. These include advanced rail electronics systems, intelligent traffic, fleet management and telematics solutions, emergency response systems, smart metering and smart grid solutions and energy-efficient management systems for large installations. It will capitalise on opportunities presented by the fast urbanising cities in Northern China, such as Tianjin Binhai New Area, Qingdao, and Shi Jia Zhuang in Hebei, that have plans for extensive infrastructure development. (Closing price: S$4.04, +0.498%)

Singapore Exchange (SGX) today welcomed the first Chinese Bank’s renminbi (RMB) bond to be listed and cleared in Singapore. The RMB bond is issued by Industrial and Commercial Bank of China’s (ICBC) Singapore branch. The bond issue is settled and cleared in RMB via SGX’s Central Depository (CDP). The bond issue is for 2 billion RMB (S$408 million) at 3.2% on a 2-year tenor, maturing on 28 November 2015. According to the book runners, Singapore investors took up 55% of the bond issue and the bonds are well distributed to more than 120 accounts. (Closing price: S$7.23, -0.55%)

Asia Power Corporation intends to make the Offer for the Offer Shares to acquire all the issued and paid-up ordinary shares in the capital other than those Shares held by the Company as treasury shares and those Shares held, directly or indirectly, by the Offeror as at the date of the Offer 26 Dec 2013. The Offer Price is S$0.16 in cash per Offer Share. The Offer will be subject to the Offeror having received, by the close of the Offer, valid acceptances  which, when taken together with the Shares acquired by the Offeror during the Offer, will result in the Offeror acquiring at least 90% of the total voting rights attributable to the Offer Shares as at the date of the Offer (the “Minimum Acceptance Condition). (Closing price: S$0.153, +0.658%)

Vard Holdings Limited is pleased to announce that it has secured a new contract with Island Offshore for the construction of one advanced offshore support vessel. The value of the contract amounts to approximately NOK 400 million. The vessel is scheduled for delivery from Vard Brevik in Norway in 1Q 2015. The hull of the vessel will be delivered from Vard Braila in Romania. The vessel is designed by Rolls-Royce. Currently, VARD has five vessels under construction for Island Offshore. (Closing price: S$0.8, 0%)

Tiong Seng Holdings Limited announce that approval-in-principle (the “AIP”) has been obtained from the SGX-ST on 29 November 2013 in respect of the Company’s application for the dealing in, listing of and quotation for up to 153,207,950 Rights Shares at the Issue Price of $0.18 for each Rights Share, on the basis of 1 right share for every 5 existing ordinary shares in the capital of the company held by the shareholders of the company as at 6 Dec 2013, on the Official List of the SGX-ST pursuant to the Rights Issue. (Closing price: S$0.225, 0%)

Source: PhillipCapital Research - 2 Dec 2013