STI: -0.06% to 3059.0                            KLCI: -0.49% to 1833.9
JCI: -1.39% to 4212.2                            SET: -0.96% to 1356.2
HSI: -0.51% to 23218                             HSCEI: -1.01% to 10962
Nifty: -1.12% to 15341                           ASX200: -0.82% to 5062.5
Nikkei: -1.12% to 15341                         S&P500: -0.38% to 1775.5

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA:
Foreclosure filings in the U.S. plunged last month to the lowest level in almost eight years as investor purchases and an improving economy brought the end of the housing crisis within sight. Default, auction and repossession notices in November were sent to 113,454 properties, a 15 percent drop from October and the biggest monthly decline in almost three years.

The Bloomberg Consumer Comfort Index advanced to minus 30.9 in the period ended Dec. 8, the best reading since the first week of October, from minus 31.3. The gauge is making progress after sinking to a one-year low in early November in the aftermath if the partial federal shutdown the prior month.

Applications for U.S. unemployment benefits jumped last week from an almost three-month low, reflecting volatility that typically occurs around the year-end holidays. Jobless claims surged by 68,000 to a two-month high of 368,000 in the period ended Dec. 7, exceeding the highest forecast in a Bloomberg survey of economists. The 300,000 applications filed in the prior week, which included Thanksgiving, were the fewest since Sept. 7.

India:
Consumer prices rose a more-than-estimated 11.24 percent in November from a year earlier, official data today showed. Most economists in a Bloomberg News survey predict Rajan will hold the benchmark interest rate at 7.75 percent in a policy decision due Dec. 18, after increasing it 50 basis points since becoming head of the Reserve Bank of India in September.

Indonesia:
Bank Indonesia held the reference rate at 7.5 percent, it said in Jakarta today, as predicted by 16 out of 19 economists surveyed by Bloomberg News. It also kept the deposit facility rate at 5.75 percent and unveiled plans to deepen the rupiah and foreign-exchange market.

South Korea:
The Bank of Korea kept its benchmark interest rate unchanged, with near 14-year-low inflation giving it room to support a rebound in Asia’s fourth-biggest economy as a declining yen threatens exports. Governor Kim Choong Soo and his board held the seven-day repurchase rate at 2.5 percent, the same level since a cut in May, the central bank said in a statement in Seoul today. All 15 economists surveyed by Bloomberg News predicted the outcome.

Australia:
Australia’s unemployment rate climbed to 5.8 percent last month from 5.7 percent in October, the statistics bureau said in Sydney today. The nation’s employers added 21,000 jobs in November, beating the median forecast of 10,000 in a Bloomberg News survey.
 

Regional Market Focus

Singapore

• The Straits Times Index (STI) ended 1.70 points lower or -1.70% to 3,059.04, taking the year-to-date performance to -3.41%.
• The FTSE ST Mid Cap Index declined -0.09% while the FTSE ST Small Cap Index gained +0.00%. The top active stocks were DBS (+0.24%), SingTel (+0.28%), OCBC (-0.31%), UOB (+0.99%) and Hutchison Port Trust Holdings (+4.07%).
• STI has been selling over the past week due to a lack of catalysts with recent weakness.
• We had pegged near term support at the key technical 3050 level and said the probability of a short term bounce is likely at that level. This was accomplished yesterday.
• We expect a possible short term cycle up. However, if price breaks below this level, it may signal a shift in investor psychology in the longer term.  
• Next support is at 3000.
• 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 13.14 points to 1,356.21 points on Tue amid a lack of political clarity and fears of an earlier-than-expected QE tapering by the US Federal Reserve at its policy meeting next week.
• The Dow industrials extended its slide on Thu as better-than-expected US retail sales in Nov and easing concerns of US government shutdown after the House of Representatives’ passage of a two-year, bipartisan budget accord fanned fears that the Federal Reserve would start unwinding its massive stimulus program this month.
• Internal uncertainty persisted after street protests continued while Supreme Commander Tanasak Patimapragorn agreed to meet with Suthep Thaugsuban, secretary general of the People’s Democratic Reform Committee (PDRC) to hear the proposal for national reform and establishment of the unelected ‘People’s Council’ tomorrow. 
• Heavy foreign selling of Thai shares continued. Our initial forecast shows there remain around Bt104bn worth of Thai shares held by foreign investors since 2009, which is close to the lowest level that foreign holdings of Thai shares hit in Sep 2011. On this basis, we think foreign selling of Thai shares is about to run its course. Buying interest from funds should also lend support to the market. For today’s strategy, any dips could present an opportunity to accumulate stocks. Today we expect a trading range of 1340-1370 points for the SET index.
• Resistance for the SET index is seen at 1365-1378 points and support at 1345-1335 points today.    

• Most Indonesian stocks fell Thursday (12/12), as Bank Indonesia decided to keep its key rate at the record high 7.50% at its board of governors’ meeting, as estimated by most economists. Shares in mining sector dropped on Thursday, as deadline for the ore exports ban drew nearer. The Jakarta Composite Index (JCI) dropped 59.525 points, or 1.39%, to 4,212.218. All major industry groups ended in red Thursday, with miscellaneous industry sector fell 1.97%, finance sector lost 1.71%, and basic industry sector slid 1.56%. The LQ45 index shed 13.785 points, or 1.93%, to close at 700.241.
• Bank Indonesia on Thursday (12/12) maintained its benchmark rate at 7.5%, as expected by most economists and analysts. The central bank is expected to keep tight monetary policy next year to reduce Indonesia’s current account deficit and restore investor confidence. On separate account, law no. 4 / 2009, or the “Mining Law”, which will be effective on Jan 12 next year, is widely seen to deepen Indonesia’s current account deficit in near future, as exports of raw minerals will be banned unless miners process their raw products in-country. The ban is expected to hurt Indonesia’s export value.
• 153 shares declined as opposed to 83 that advanced Thursday on the Indonesia Stock Exchange, where 3.24 billion shares worth IDR 3.54 trillion changed hands on the regular board. Foreign investors posted net sale of stocks worth IDR 390.54 billion.
• The Jakarta Composite Index (JCI) will likely to take a pause after recent declines, as global markets provided mixed leads and amid mixed signal from US economic data. We expect the JCI to consolidate today, and trade within 4,188 – 4,260 range.

• The Colombo bourse managed to close with a modest gain, resulting in the indices to close within the green terrain. The ASPI settled the day at 5,793.19 with a tiny gain of 5.38 points or 0.09% and the S&P SL20 gained 7.17 points or 0.23% to settle at 3,189.44. With regard to movements in share price, a total of 77 companies gained during the day whereas 70 companies posted drops in share prices. As at the daily closure the total market capitalization stood at LKR 2.41Tn extending the year to date gain to 11.19%. The market PER and PBV were 14.82x & 1.95x respectively. The turnover for the day amounted to record LKR 247.71Mn, indicating a gain of 37.56% from its previously recorded. Under the sectorial round-up, Health Care (HLT) sector topped the list providing LKR 67.17Mn and Bank Finance & Insurance (BFI) sector stood next in line providing LKR 62.31Mn to the daily aggregate turnover. A total of 15.59Mn shares changed hands during the day resulting in a gain of 57.03% compared to the previous trading day. Foreign participants appeared to be bullish for the 3rd consecutive day resulting in a net foreign inflow of LKR 12.86Mn, resulted by foreign buying of LKR 65.04Mn and selling of LKR 52.18Mn. This assisted the year to date net foreign inflow to reach LKR 23.19Bn. Looking at the local FOREX markets, the USD is selling at 132.40/-.

• The Australian share market on Thursday fell for a sixth straight day with investors appearing to book profits after a good year and recent negative economic news. The benchmark S&P/ASX200 index was down 41.7 points, or 0.82 per cent, at 5,062.5 points.
• Today (13/12/13), the Australian market looks set to open lower after falls on international bourses amid growing speculation the Federal Reserve may start cutting its stimulus program this month.
• In economic news on Friday, the Australian Bureau of Statistics releases October lending finance data.
• In equities news, Westpac has its annual general meeting scheduled.

• HSI dropped 120 points or 0.51% to 23,218. CEI lost 111 points or 1.01% to 10,962. Trading volume was HKD71.504 billion.
• HK market was weaker, tracking overnight weakness in US market. HSI opened at 23,265 (-73), and further dropped, led by China financial stocks.
• China financial sector led the index down, Ping An (2318.HK) and China Life (2628.HK) lost 4%, 3.3% respectively.
• Macau gambling stocks out-performed. Galaxy Ent (27.HK) gained 2.8% to record high. Wynn Macau (1128.HK) and MGM China (2282.HK) climbed 6.5% and 3.3% respectivelly.
• China banking sector led the indexes down, even new loans exceeded estimates last month. CCB (939.HK), ICBC (1398.HK) and Bankcomm (3328.HK) dropped 1.5%, 1.3% and 1.3% respectively.
• China property sector under-performed on rumor that Banks in Shenzhen cancel the first mortgage preferential. China Res Land (1109.HK), KWG Property (1813.HK) and Shimao Property (813) slipped 3.3%, 3.4% and 3.2% respecctively.
• Technically, HSI further dropped below 50-MA of 23,296, sending a negative signal. HSI is vulnerable to further consolidation. The next resistance and support for HSI are 23,671 and 23,000 respectively.

Source: PhillipCapital Research - 13 Dec 2013