STI: -0.33% to 3114.2                            KLCI: +0.11% to 1826.9
JCI: -0.86% to 4180.8                            SET: -1.09% to 1361.6
HSI: +0.13% to 23743                            HSCEI: -0.17% to 11376
Nifty: +0.30% to 6259.9                         ASX200: -0.23% to 5186
Nikkei: +0.81% to 15299                        S&P500: +1.12% to 1805.1

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA:
The jobless rate dropped to a five-year low of 7 percent in November as American employers added more workers than forecast, boosting speculation the Federal Reserve may start scaling back stimulus as soon as this month. The 203,000 increase in payrolls followed a revised 200,000 advance in October, Labor Department figures showed today in Washington. Joblessness fell from 7.3 percent.

Household purchases, which account for about 70 percent of the economy, climbed 0.3 percent after a 0.2 percent increase the prior month, the Commerce Department reported today in Washington.

Eurozone:
German factory orders fell more than economists forecast in October, signaling an uneven recovery in Europe’s largest economy. Orders, adjusted for seasonal swings and inflation, slid 2.2 percent from September, when they rose a revised 3.1 percent. Economists forecast a decline of 1 percent, according to the median of 40 estimates in a Bloomberg survey. Orders advanced 1.9 percent from a year ago when adjusted for the number of working days.

China:
China’s exports rose more than estimated in November, pushing the trade surplus to the highest in more than four years in a sign global demand is helping sustain a recovery in the world’s second-biggest economy. Overseas shipments rose 12.7 percent from a year earlier, the General Administration of Customs said today in Beijing. That exceeded estimates from 41 of 42 analysts surveyed by Bloomberg News. The trade surplus of $33.8 billion was the biggest since Jan.
 

Regional Market Focus

Singapore

• The Straits Times Index (STI) ended 10.21 points lower or -0.33% to 3,114.17, taking the year-to-date performance to -1.67%.
• The FTSE ST Mid Cap Index declined -0.06% while the FTSE ST Small Cap Index declined -0.32%. The top active stocks were SingTel (-1.10%), DBS (-0.53%), OCBC (-0.69%), UOB (-0.10%) and Keppel Corporation (-0.09%).
• STI has been drifting sideways over the past 2 months due to a lack of catalysts with recent weakness.
• We peg near term support at the 3050 level.
• Top Picks are DBS (Accumulate, TP: $17.50), M1 (Accumulate, TP:$3.55), Boustead (Buy, TP: $2.05) and Keppel Corp (Accumulate, TP:$12.07). Deep Value Plays are Amara (Buy, TP $0.74).

Thailand

• Thai stocks fell 1.09% to 1,361.57 points last Fri on fears of an earlier-than-expected US Federal Reserve’s QE tapering after a batch of upbeat economic data and amid lingering political worries.
• The better-than-expected US non-farm payrolls and unemployment rate data sent the Dow industrials and stock markets in Asia higher, snapping a five-day losing streak on optimism that the US economic recovery was gaining strength. After jobs report, 34% of economists in a Bloomberg poll saw tapering at the US Federal Reserve’s Dec 17-18 policy meeting, up from 17% in the previous survey.
• The room for upside in the Thai stock market would continue to be limited amid domestic political pressure after MPs from the opposition Democrat Party resigned en masse on Sun to join today’s mass anti-government rally led by the People’s Democratic Reform Committee (PDRC). Today more than 50 groups of anti-government protesters will move from various starting points on nine different routes to Government House for the so-called ‘final battle’ to topple the Yingluck government and wipe out the Thaksin regime.  
• In our view, protests are unlikely to turn violent but political developments still bear close watching. In a worst-case scenario, the downside for the SET index is seen at 1260 points if things turn violent. 
• Today we peg resistance for the SET index at 1375-1395 points and support at 1345-1320 points. 

• The Jakarta Composite Index (JCI) fell Friday (06/12), as investors took cautious stance ahead of US jobs data scheduled for release later in the day.
• The JCI declined 36.106 points, or 0.86%, to finish at 4,180.788. The decline on Friday included eight of the nine major industry groups, with finance sector dropped 1.71%, infrastructure sector lost 1.43%, and construction sector trimmed 0.82%. The LQ45 index shed 7.922 points, or 1.13%, to close at 691.025.
• Worries that the US Federal Reserve could start scaling back its bond purchase size as soon as December this year weighed on Indonesian stocks Friday. The Rupiah, pressured by anticipation of US employment report due out later in the day, traded around 12,000 on Friday. 155 shares declined, and 97 shares advanced on the Indonesia Stock Exchange, where 2.96 billion shares worth IDR 3.82 trillion changed hands on the regular market. Foreign investors posted stock net sale of IDR 718.8 billion.
• The Jakarta Composite Index (JCI) may decline further today, as investors respond to better-than-expected employment data in the US. Worries that the US Federal Reserve would roll back its stimulus as early as December or in the first quarter next year will pressure the JCI and the Rupiah. We peg near-term support and resistance for the JCI at 4,139 and 4,225, respectively.

• The market reached its intraday peak at 5,838.73 gaining 58 points (1.01%) during the early hours, however settled the week slightly lower at 5,810.24. The S&P SL20 settled the day at 3,183.09, gaining 21.47 points or 0.68%. The turnover for the day amounted to LKR 779.82Mn, charting a drop of 41.00% compared to the previous trading day. With regard to the movement in share prices, 72 companies gained whereas 136 companies recorded dips in share price.   A total of 74.33Mn shares changed hands resulting in a dip of 36.12% against the previous day. Under the sectorial wrap-up, Bank Finance & Insurance (BFI) sector stood on top providing LKR 286.71Mn and Diversified Holdings (DIV) sector emerged second contributing LKR 216.13Mn. The two sectors BFI & DIV collectively accounted to nearly 40.00% of the daily aggregated turnover. The total market capitalization as at the day’s end moved up to LKR 2.42Tn, extending the year to date gain of 11.52%. The market PER & PBV were 15.00x and 1.96x respectively.  Foreign participants appeared to be bearish for the 3rd consecutive trading day, resulting in net foreign inflow of LKR 126.46Mn, adding further to date net foreign inflow of LKR 22.92Bn. Foreign buying for the day amounted to LKR 272.64Mn and sales were recorded as LKR 146.18Mn. With regard to the local FOREX, the USD is selling at LKR 132.43/- and bought at LKR 129.47/-.

• The Australian share market on Friday closed lower as financial stocks dragged down the bourse ahead of the release of important jobs numbers in the US. The benchmark S&P/ASX200 index was 12.0 points, or 0.23 per cent, lower at 5,186.0.
• Today (09/12/13), the Australian market looks set to open higher following strong gains on Wall Street after a strong jobs report fuelled expectations that the Federal Reserve will begin to reduce its huge stimulus soon.
• In economic news on Monday, the ANZ job advertisements series for month just ended is due out.
• In equities news, the Australian Competition Tribunal has a case management conference in Melbourne on Murray Goulburn Co-operative Co's application regarding the proposed acquisition of Warrnambool Cheese and Butter Factory. Amcor has a scheme meeting for vote on demerger of Orora scheduled and Brambles has investment briefing and QBE a trading update.

• HSI gained 30 points or 0.13% to 23,743. CEI lost 19 points or 0.17% to 11,376. Trading volume was HKD63.648 billion.
• HSI recorded first weekly decline in 4 weeks on sooner-than-expected Fed’s tapering. HSI lost 138 points or 0.58% while CEI slipped 0.57% for last week.
• Macau gambling sector under-performed, particularly the 2nd tier stocks. Macau Lend (1680.HK) slumped 17.3% after reaching record high. Melcolot (8198.HK) and Successuniverse (487.HK) slipped 15.7% and 7.1% respectively.
• Tencent (700.HK), the best performed blue chip, climbed 2.3% to record high.
• China coal sector under-performed before new coal contract negotiation, China Shenhua (1088.HK), China Coal (1898.HK) and Yanzhou Coal (1171.HK) dropped 2.3%, 1.7% and 1.8% respectively.
• Beijing Dev (154.HK) slumped 23.3% after resumption of trading as it terminated acquisition of waste-to-energy project from China Green Energy.
• Technically, HSI failed to sustain at 10-MA level of 23,798, sending a negative signal. We expect it to be range bounded between 23,500 and 24,000. The next resistance and support for HSI are 24,000 and 23,519 respectively.

Morning Note
Company Highlights

Hiap Seng Engineering awarded turnaround maintenance contract worth approximately US$10 million in Vietnam.
(Closing Price: $0.235, 0%)

Metro Holdings announced that Crown Investments Ltd, an indirect subsidiary of the Company, has agreed to acquire 13.66% of Top Spring International  Holdings shares for an aggregate consideration of HKS528,773,214 (approximately S$85.7 million).
(Closing Price: $0.835, 0.602%)

IPCO International has signed a Framework Agreement with Haiyang City Housing and Construction Planning Authority for a 30-year natural gas distribution concession in Haiyang City, Shandong, Peoples Republic of China. Construction is expected to commence in the second half of 2014. Total Investment Cots is estimated at RMB 120 million. 
(Closing Price: $0.017, 6.250%)

Source: PhillipCapital Research - 9 Dec 2013