STI: -0.68% to 3060.7                            KLCI: -0.06% to 1842.8
JCI: -0.09% to 4271.7                            SET: +0.14% to 1369.4
HSI: -1.71% to 23338                             HSCEI: -2.71% to 11073
Nifty: -0.39% to 6307.9                          ASX200: -0.76% to 5104.3
Nikkei: -0.62% to 15515                         S&P500: -1.13% to 1782.2

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data
China:
China’s new yuan loans and broadest measure of credit exceeded estimates last month in a sign authorities are trying to support growth amid a mixed picture from other economic data. New local-currency loans were 624.6 billion yuan ($103 billion), the People’s Bank of China said today in Beijing, compared with the 580 billion yuan median estimate of 41 analysts surveyed by Bloomberg News. Aggregate financing was 1.23 trillion yuan, topping all economists’ estimates, while M2 money supply increased 14.2 percent from a year earlier.
 

Regional Market Focus

Singapore

• The Straits Times Index (STI) ended 20.98 points lower or -0.68% to 3,060.74, taking the year-to-date performance to -3.36%.
• The FTSE ST Mid Cap Index declined -0.87% while the FTSE ST Small Cap Index declined -0.83%. The top active stocks were SingTel (-0.28%), OCBC Bank (-0.91%), DBS (-1.08%), UOB (-1.56%) and Keppel Corp (-0.18%).
• STI has been selling over the past week due to a lack of catalysts with recent weakness.
• We peg near term support at the key technical 3050 level and probability of a short term bounce is likely at that level.
• Violation of this level may signal a shift in investor psychology in the longer term.  
• 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

• SETI movement was capped yesterday but managed to gain 0.14% at the close under thin trading turnover of only Bt26,002mn.  The bulk of investors were still sidelined while closely monitoring local politics.
• The US stock market dropped after the bipartisan budget agreement was reached late Tuesday. The relief, however, had renewed concerns that the Fed’s tapering would begin at the FOMC meeting scheduled next week.
• In an effort to receive supports from the armies, the leader of the anti-government rally Suthep Thuagsuban attempted to set an appointment with the army’s chief but it’s still lack of progress. Although the political situation remains non-violent, any moves from the rallies still bear a close watch.
• Foreign investors continued to dump equities and there’s no sign of a slowdown. Selling pressure appears to weigh the sentiment but buying interest from funds would somehow underpin the market. For short-term plays, the ‘buy the dip’ is advised with support noted at 1355 and 1345 points.
• Resistance for the main index is pegged at 1378-1393 points and support at 1355-1345 points today.  

• Indonesian stocks treaded water Wednesday (11/12), as investors grew cautious ahead of Bank Indonesia key rate announcement scheduled for Thursday. Negative notes in Asia also weighed on the Jakarta Composite Index (JCI) on Wednesday.
• The Jakarta Composite Index (JCI) slipped 3.935 points, or 0.09%, to close at 4,271.743, with seven of the nine major stock sectors ended in red. Stocks in infrastructure sector led gains on Wednesday, as the sector index climbed 0.96%, followed by finance sector with 0.32%.
• Bank Indonesia is expected to maintain its key rate at 7.5% at its meeting announcement slated for Thursday (12/12), but is seen to raise its benchmark rate later next year. High interest rates would dampen Indonesia’s economic growth, but cut household spending and hence imports of goods into the country. Indonesia’s current account deficit, a negative macroeconomic trait that has drawn foreign capital outflows since May this year, is estimated to narrow over early quarters next year.
• The Jakarta Composite Index (JCI) will likely decline today, as investors look ahead to today’s announcement of BI rate, and US budget deal increases the chance that the Federal Reserve would scale back its stimulus early. We expect the JCI to decline today, and peg its near-term support and resistance at 4,216 and 4,310, respectively.

• The market ended on a positive note, regardless of the sluggish participation of the investors and the selling pressure which prevailed on most parts of the trading day. This resulted in the weak turnovers & volumes being logged. The benchmark ASPI managed to gain 9.29 points (0.16%) and settled within the positive side at 5,787.81. The S&P SL20 index gathered 5.65 points or 0.18% to close the day at 3,182.27. The total market capitalization as at the daily closure stood at LKR 2.41Tn, charting a year to date gain of 11.09%. The market PER and PBV were 14.81x & 1.95x respectively. The turnover for the day amounted to record 180.07Mn indicating a drop of 57.72% against the previous trading day, and was also the lowest turnover charted for the year. Under the sectorial summary, Bank Finance & Insurance (BFI) sector provided LKR 81.53Mn, dominating the list while accounting to 45.28% of the total turnover. Diversified Holdings (DIV) sector added LKR 32.57Mn. Further on, the two sectors BFI & DIV collectively accounted to nearly 65.00% of the total turnover. The traded volume for the day amounted to 9.93Mn shares, indicating a drop of 34.18% as against its previously recorded. Looking at the movements in share prices, 96 companies lost while 63 companies gained. With regard to the foreign figures, a net foreign inflow of LKR 23.48Mn was recorded during the day, being a result of foreign purchases of LKR 54.63Mn and sales which amounted to LKR 31.14Mn. Currently the year to date net foreign inflow stands at LKR 23.18Bn. The local FOREX market closed with, the USD selling at LKR 132.38/- and buying at LKR 129.22/-.

• The Australian, share market on Wednesday weakened for the fifth consecutive session after a key consumer sentiment reading fell to a five-month low. Consumer sentiment fell by 4.8 per cent to 105.0 points in December, from 110.3 in November, according to the Westpac Melbourne Institute Index of Consumer Sentiment. It was the lowest level of the index since July. The benchmark S&P/ASX200 index was down 39.4 points, or 0.77 per cent, at 5,104.2 points.
• Today (12/12/13), the Australian market looks set to open lower following falls on international bourses after US politicians reached a budget deal. US Democratic senator Patty Murray and House of Representatives Republican Paul Ryan late on Tuesday announced a federal budget deal for the next two years that would avert another government shutdown when US spending authority expires on January 15.
• Locally, in economic news on Thursday, the Australian Bureau of Statistics (ABS) releases November labour force data.
• No major equities news is expected.

• HSI lost 405 points or 1.7% to 23,338. CEI dropped 308 points or 2.71% to 11,073. Trading volume climbed to HKD73.794 billion.
• HK market was weak, HSI and CEI dropped to the lowest point of this month but HSI gained support at 50-MA
• China financial sector led the index down, Ping An (2318.HK), China Life (2628.HK) and ICBC (1398.HK) lost 4%, 3.3% and 2.7% respectively.
• China Coal sector under-performed with China Shenhua (1088.HK) and China Coal (1898.HK) both down 3.9% respectively.
• Environmental stocks out-performed in the second day, CTEG (1363.HK) and BJ Ent Water (371.HK) were up 6.3% and 5.1% respectively. China EB Int’l (257.HK) still rose 3.5%, after placement with 6.2% discount.
• China Mobile (941.HK) kept under-performed after 4G licenses and dropped 3.2% yesterday.
• Technically, HSI failed to retain at 10-MA and 20-MA level, but we expect it to gain support at 50-MA of 23,291. The next resistance and support for HSI are 23,770 and 23,000 respectively.

Morning Note
Company Highlights

SPH invests in Magzter Inc. a global digital magazine store and newsstand. (Closing Price: $3.980, -0.5%)

Armarda, China Mobile Satellite Communication Group (CSMCG) and Thuraya have joined hands in developing next generation mobile satellite communication products for China and global customers. (Closing Price: $0.011, -8.33%)

Keppel FELS, a wholly-owned subsidiary of Keppel Offshore and Marine (Keppel O&M) to build new differential drillship to its propriety design. When completed in 2016, the drillship is expected to be a state- of-the-art deepwater exploration, development and completion drilling vessel. (Closing Price: $10.880, -0.183%)

Source: PhillipCapital Research - 12 Dec 2013