STI:       -0.85%   to 3,160.70              KLCI:        -0.13%  to 1,821.90
JCI:       -1.11%   to 4,241.30              SET:          -0.52%  to 1,376.63
HSI:       -0.76%   to 23,728.70           HSCEI:      -0.70%  to 11,368.78
Nifty:     -0.66%   to 6,160.95             ASX200:     +0.34% to 5,273.75
Nikkei:   -2.17%   to 15,407.94          S&P500:    -0.13%  to 1,792.81

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA
Purchase of new home sales jumped 25.4 percent to a 444,000 annualized pace, following a 354,000 rate in the prior month that was the weakest since April 2012, figures from the Commerce Department showed today in Washington. The median forecast of 62 economists surveyed by Bloomberg called for 429,000.

Companies boosted payrolls in November by the most in a year, a sign that U.S. employers were optimistic about demand after the end of a government shutdown a month earlier, a private report based on payrolls showed today. The 215,000 increase in employment exceeded the most optimistic forecast in a Bloomberg survey and followed a revised 184,000 gain in October that was larger than initially estimated. The median forecast of economists called for a 170,000 advance.

Service industries in the U.S. expanded at a slower pace than forecast in November, showing uneven progress in the biggest part of the economy. The Institute for Supply Management’s non-manufacturing index dropped to 53.9, the lowest in five months, from 55.4 in the prior month. A gauge above 50 shows expansion. The median estimate in a Bloomberg survey of economists was 55.

The trade deficit in the U.S. narrowed in October for the first time in four months as exports climbed to a record. The gap decreased 5.4 percent to $40.6 billion from a $43 billion shortfall in September that was larger than previously estimated, the Commerce Department reported today in Washington. The median forecast in a Bloomberg survey of 63 economists called for a $40 billion deficit.

Australia
Australia’s economy expanded slower than economists forecast last quarter after households boosted savings, suggesting the central bank may need to do more to spur spending as a mining investment boom wanes. Third-quarter gross domestic product advanced 0.6 percent from the prior three months, when it rose a revised 0.7 percent, government data showed, versus economists’ forecast for a 0.7 percent gain. Growth was 2.3 percent from a year earlier -- the third-straight quarter below 2.5 percent and less than economists’ estimates for a 2.6 percent expansion.
 

Regional Market Focus

Singapore

• The Straits Times Index (STI) ended 1.09 points lower or -0.03% to 3,187.67, taking the year-to-date performance to +0.65%.
• The FTSE ST Mid Cap Index declined -0.50% while the FTSE ST Small Cap Index gained +0.20%. The top active stocks were SingTel (-0.80%), DBS (unchanged), Noble Group (-0.93%), UOB (+0.19%) and Ezra (+8.99%).
• STI has been drifting sideways over the past 2 months due to a lack of catalysts.
• We peg near term support at the 3150 level.
• Top Picks are DBS (Accumulate, TP: $17.50), Singtel (Accumulate, TP:$4.06) and Keppel Corp (Accumulate, TP:$12.07). Deep Value Plays are Amara (Buy, TP $0.74), and Boustead (Buy, TP: $2.05)

Thailand

• King’s Birthday holiday

• The Jakarta Composite Index (JCI) declined Wednesday (04/12), in line with negative notes in Asia ahead of November jobs data from the US. The JCI slipped 47.462 points, or 1.11%, to end at 4,241.302. Commodity sectors outpaced other major industry groups on Wednesday, as investors bought into agriculture and mining shares on improved outlook of commodity prices next year. Index of agriculture sector rose 0.54%, and mining sector gained 1.43%. Pulling the JCI down, finance sector dropped 1.67%, miscellaneous industry sector lost 1.53%, and basic industry sector fell 1.46%.
• The Rupiah continued to depreciate Wednesday, hovering around IDR 11,975 against the greenback, as fears about rolled-back Fed stimulus resurfaced. The November labor report from the US due out on Friday (06/12) is a broadly anticipated indicator to gauge whether the Fed will start scaling back its bond purchase program.
• 139 shares declined, and 86 shares advanced Wednesday on the Indonesia Stock Exchange, where 3.19 billion shares worth IDR 3.24 trillion traded on the regular board. Foreign investors posted net stock purchase of IDR 78.16 billion.
• The Jakarta Composite Index (JCI) will likely trade lower today, as markets anticipate US jobs data scheduled for Friday (06/12) that will provide clue to whether the US Federal Reserve will start scaling back its stimulus program. We expect the JCI to move to negative territory today, and trade within 4,223 – 4,277 range.

• The Bourse witnessed its first positive closure for the week, resulting in both indices to re-enter the positive terrain. The benchmark ASPI closed at 5,782.92 gaining 9.80 points or 0.17%, and the S&P SL20 gained 4.11 points (0.13%) to settle at 3,165.05. As at the day’s closure, the total market capitalization was recorded at LKR 2.41Tn, recording a year to date gain of 11.00%. The market PER & PBV stood at 14.93x and 1.95x respectively. The aggregated turnover for the day amounted to LKR 794.49Mn, indicating a dip of 17.31% against the previous trading day. Under the sectorial summary, Bank Finance & Insurance (BFI) sector stood out as the prime contributor providing LKR 490.47Mn, accounting to 61.73% of the total turnover. Diversified Holdings (DIV) sector added LKR 189.81 to the daily turnover. The two sectors collectively accounted to nearly 86.00% of the aggregated turnover for the day. With regard to the movements in share prices, price gainers surpassed by the losers by 75:72. Foreign participants appeared to be bullish during the day, recording a net foreign inflow of LKR 54.98Mn, resulted by foreign buying worth LKR 178.82Mn and selling of LKR 123.84Mn. The year to date net foreign inflow currently stands at LKR 22.50Bn. With regard to the local FOREX, the USD is selling at LKR 132.52/- and the buying rate stands at LKR 129.36/-.

• HSI dropped 181 points or 0.76% to 23,728. CEI lost 79 points or 0.7% to 11,368. Trading volume increased to HKD67.274 billion.
• HK market was weak yesterday, tracking overnight weakness in US markets. HSI lost 10-MA at 23,779.
• International finance sector led HSI down. HSBC (5.HK) and AIA (1299.HK) slipped 1.2% and 1.4% respectively.
• Macau gambling sector out-performed on strong November data, MGM China (2282.HK) and Macau Legend (1680.HK) climbed 4.8% and 5.2% respectively.
• Shipping stocks out-performed on rising BDI, China Ship Dev (1138.HK), China Cosco (1919.HK) and CSCL (2866.HK) were up 4.2%, 2.7% and 2.9% respectively.
• 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

Yoma Strategic Holdings Ltd. wishes to update shareholders that it has, through its 100% owned subsidiary, Yoma Strategic Investment Ltd., entered into a new joint venture with LCT Investment Holdings Pte. Ltd. and First Myanmar Investment Co., Ltd to establish a Myanmar-incorporated joint venture company to build and operate a steel mesh products manufacturing plant in Yangon. Mesh products are steel reinforcements mainly used to reinforce concrete and associated products for the construction industry. LCT is an investment holding company which was set up by a group of unrelated third party investors to explore investment opportunities in Myanmar. The major shareholder of LCT is in the business of manufacture and distribution of steel mesh products in the South East Asia region and he has more than 20 years' experience in this industry. Parties will invest in the Joint Venture by way of equity and shareholders’ loans amounting to an aggregate of US$6,500,000. LCT’s pro rata contribution amounts to US$3,900,000 and each of Yoma’s and FMI’s pro rata contribution amounts to US$1,300,000. (Closing price: S$0.755, -1.307%)

Keppel Corporation Limited is pleased to announce that CEO-designate, Mr Loh Chin Hua will be appointed as an executive director to the Board with effect from 1 January 2014, when the current CEO, Mr Choo Chiau Beng retires. With effect from the same date, Mr Loh will also succeed Mr Choo as Chairman on the Boards of the Group’s key listed and non-listed subsidiaries, namely Keppel Land Limited, Keppel Offshore & Marine Ltd and Keppel Infrastructure Holdings Pte Ltd. Mr Loh, 52, has been with the Keppel Group for 11 years and possesses over 25 years of experience in real estate investing and fund management spanning the US, Europe and Asia. Prior to this, Mr Loh was MD of Keppel Land's real estate fund management arm, Alpha Investment Partners (Alpha), which he had founded in 2003. Under his leadership, Alpha has grown its assets under management to about S$10.5 billion today. Prior to Alpha, Mr Loh was MD at Prudential Investment Management Inc, and held several senior appointments in the Government of Singapore Investment Corporation. (Closing price: S$11.13, -1.504%)

COSCO Corporation (Singapore) Limited is pleased to announce that COSCO (Zhoushan) Shipyard Co. Ltd, a subsidiary of the Company’s 51% owned subsidiary, COSCO Shipyard Group Co. Ltd, has secured a contract valued over USD54 million from an Asian buyer to build two (2) 64,000 DWT bulk carriers. The two bulk carriers are scheduled for delivery in the fourth quarter of 2014. (Closing price: S$0.72, 0%)

CDL Hospitality Real Estate Investment Trust (“H-REIT”) is pleased to announce that Sanctuary Sands Maldives Private Limited, a subsidiary of DBS Trustee Limited, as trustee of H-REIT, has today entered into a conditional land sale agreement and a conditional business sale agreement with Xanadu Holdings Pvt Ltd for the acquisition of Jumeirah Dhevanafushi in the Maldives at a purchase price of US$59.6 million (or approximately S$74.8 million). On a pro forma annualised basis for the nine months ended 30 September 2013, this translates to net property income yield of 6.2% and a DPS accretion of 2.2%, with potential for improvement as the Property opened only on 1 November 2011, and is currently still undergoing gestation. The new high quality resort is well-positioned in the luxury segment to benefit from the growing affluence of Asian travellers and attendant demand for top-tier resort experiences, providing the opportunity for CDL Hospitality Trusts to further participate in the buoyant hospitality sector of the premium Maldives market, one of the highest RevPAR markets in the world. (Closing price: S$1.58, -1.25%)

Singapore Windsor Holdings Limited wishes to announce that the Company’s wholly-owned subsidiary, Windsor Holding Investment Limited. has on 4 December 2013 entered into a sale and purchase agreement with Bright Legend Investment Limited for the proposed disposal of WHIL’s entire shareholding interests being 70% of the total issued and paid up share capital of Windsor Manganese Limited. The aggregate sale consideration for the sale of the Sale Shares is HK$45,000,000 (approximately S$7,287,921) which will be paid in cash by the Purchaser. Windsor Manganese is the investment holding company of the Group that holds the entire registered capital of WMY which operates a silicon manganese factory The rationale of proposed disposal is reduce future losses to be incurred in the loss-making silicon manganese segment and focus on its remaining profitable business in the manufacture and sale of moulds and printed circuit boards. (Closing price: S$0.25, -1.961%)
 
SBI Offshore Limited wishes to announce the proposed issue of 22,000,000 new ordinary shares in the capital of the Company at placement price S$0.125 for each Placement Share by way of a private placement with Pheim Asset Management Sdn Bhd. The Placement Price represents a premium of approximately 12% to the volume weighted average price of S$0.1116 per Share for trades in the Shares done on Catalist on 28 November 2013. The 22,000,000 Placement Shares represent approximately 14.13% of the Issued Share Capital as at the date of this announcement and the date of the AGM. (Closing price: S$0.125, +9.649%)

Interra Resources Limited announces that its jointly controlled entity, Goldpetrol Joint Operating Company Inc. has completed development well CHK 1176 in the Chauk oil field in Myanmar as an oil producer. Interra has a 60% interest in the Improved Petroleum Recovery Contract of the Chauk field and also owns 60% of Goldpetrol which is the operator of the field. Interra’s share of the cost of drilling was funded from existing funds on hand. CHK 1176 has been completed through casing perforation over 55 feet covering five reservoirs at 185 barrels of oil per day with (of significance) no water production. This indicates the presence of possible untapped reservoirs which, following technical analysis of CHK 1176, may potentially lead to future directional drilling opportunities in prospective areas in the Chauk and Yenangyaung oil fields. (Closing price: S$0.41, -1.205%)

Source: PhillipCapital Research - 5 Dec 2013