STI:       +0.23%     to     3,134.4             KLCI:       +0.47%     to     1,844.1
JCI:       +0.32%     to     4,202.8            SET:          -1.80%      to     1,308.5
HSI:       +1.13%     to     23,179.6          HSCEI:     +1.76%     to     10,834.4
Nifty:     +0.17%     to     6,278.9            ASX200:   +0.67%     to     5,327.2
Nikkei:  +1.03%     to     16,174.4          S&P500:   +0.47%     to     1,842.0

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

Singapore
Industrial production rose 4.0 percent on-year in November, a slower pace compared to the upwardly revised 8.3 percent gain in the preceding month as pharmaceutical production continued to slip, according to Singapore's Economic Development Board (EDB).

Output in the biomedical engineering sector declined 2.1 percent on-year, primarily due to a 3.2 percent contraction in pharmaceutical production. Excluding biomedical manufacturing, manufacturing output rose 5.5 percent annually in November.

Meanwhile, electronic cluster’s output expanded 11 percent on-year in November, slowing from 23.4 percent in October. The transport engineering cluster’s output increased 6.3 percent on-year in November, slowing from 10.2 percent in October.

On a seasonally adjusted month-on-month basis, manufacturing output contracted 2.8 percent in November rising an upwardly revised 0.2 percent in October.

Thailand
Thailand recorded a trade deficit of $557 million in November, as exports skidded 4.08 percent on-year to $18.75 billion while imports fell 8.60 percent to $19.31 billion, based on the data from Ministry of Commerce.

The trade deficit was $21.9 billion in the first 11 months of this year, a 0.49 percent contraction compared to the same period last year, according to the Commerce Ministry Permanent Secretary Srirat Rastapana.
 

Regional Market Focus

Singapore

• The Straits Times Index (STI) ended 7.07 points higher or +0.23% to 3,134.36.
• 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. Since then, price has cycled up cycled up to resistance at 3126.
• Next resistance is at 3170.
• Immediate supports at 3000 and 2930.

Thailand

• Thai stocks tumbled as much as 1.8% on Thu as clashes with anti-government protesters claimed the life of one riot police while uncertainty grew over the planned Feb 2 election after the Election Commission urged the government to postpone the poll.
• The DJIA notched another record closing high after strong data about the holiday shopping season after Christmas and a bigger-than-expected drop in US jobless claim numbers. Even though the major downtrend would remain intact in the Thai stock market, there remains scope for some short-term technical bounce. 
• Domestic political tensions escalated after clashes between riot police and anti-government protesters left one people dead and 96 injured, prompting the EC to propose the government to postpone the Feb 2 poll. Speculation also grows on whether EC members will resign. If more than three election commissioners resign, a political vacuum will emerge and increase uncertainty over the Feb 2 election. Political situation still bears close watching well into next year. If investors will hold stocks into next year, equity holdings should be limited at 25% of the portfolio. Today we expect a trading range of 1290-1330 points for the SET index.
• Resistance for the main index is pegged at 1335-1345 points and support at 1300-1280 points today.

• The Jakarta Composite Index (JCI) climbed Tuesday (24/12), amid positive tones in Asia that followed a strong performance on Wall Street a day earlier.
• The JCI rose 13.226 points, or 0.32%, to finish at 4,202.834, with seven of its nine main stock sectors ended in positive territory. Shares in automotive-dominated miscellaneous industry sector led gains on Tuesday with 2.16%-advance, followed by consumer goods sector with 0.84%-gain, and infrastructure sector with 0.64%-rise. LQ45, the index that trails Indonesia’s blue-chip stocks, closed 4.132 points, or 0.59% higher to 701.197.
• Gainers outpaced losers 123 to 102 Tuesday on the Indonesia Stock Exchange, where 1.89 billion shares worth IDR 1.89 trillion traded on the regular board. Foreign investors’ transactions netted in a total sale of IDR 12.24 billion.
• The Jakarta Composite Index (JCI) will likely continue to rise today, with positive leads from global markets amid a row of positive economic data from the US. But gains can be limited by thin trading volume this holiday season. We expect the JCI to climb today, within near-term range of 4,162 - 4,227.

• The market ended on a mixed note on Boxing Day, resulted by the sluggish participation of the investors and the selling pressure which prevailed on most parts of the trading day, while resulting in the lowest turnover & volume being logged for the year. The benchmark ASPI managed to gain minute 2.56 points putting an end to its 3 day losing streak and settled within the positive side at 5,848.49. The S&P SL20 index witnessed a marginal drop of 2.01 points to close the day at 3,223.12. The total market capitalization as at the daily closure stood at LKR 2.43Tn, charting a year to date gain of 12.25%. The market PER and PBV were 15.20x & 1.97x respectively. The turnover for the day amounted to record LKR 114.93Mn, indicating a drop of 53.35% from its previously recorded. Under the sectorial round-up, Bank Finance & Insurance (BFI) sector topped the list providing LKR 74.30Mn and Manufacturing (MFG) sector stood next in line providing LKR 8.67Mn to the daily turnover. A total of 6.15Mn shares changed hands during the day resulting in a dip of 77.66% 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 54.10Mn, resulted by foreign buying of LKR 66.63Mn and selling of LKR 12.53Mn. This assisted the year to date net foreign inflow to reach LKR 22.51Bn. Looking at the local FOREX markets, the Sri Lankan rupee continued to appreciate further against the USD, currently the USD is selling at 132.32/- and is bought at LKR 129.16/-.

• HSI gained 257 points or 1.13%. CEI climbed 187 points or 1.76% to 10,834. Trading volume was HKD28.726 billion due to half-day trading.
• HK market was firmer as the central bank acted to ease a year-end cash crunch. HSI rose the most in 5 weeks and regained 10-MA.
• Hang Lung Properties (101.HK), the largest blue-chip gainer rebounded 2.7% after reaching year-low in previous day.
• China Unicom (762.HK) and China Telecom (728.HK) gained 1.7% and 1.8% respectively as MIIT lowered the interconnection fee. China Mobile (941.HK) edged up 0.5%.
• China financial sector led the indexes up. Bank of China (3988.HK), Ping An (2318.HK) and China Life (2628.HK) were up 2.3%, 2.5% and 2.3% respectively.
• China Shenhua (1088.HK) climbed 2.1% after announced plan to buy assets from its parent.
• Technically, the next resistance and support for HSI are 23,286 and 22,941 respectively.

Morning Note
Company Highlights

HLH Group Limited announced that it has entered into a joint operations agreement with Zhong Fu International Investment (Cambodia) Ltd in respect of cultivation, processing and production of cassava at HLH Cambodia’s 9,985 hectares of farmland plantation situated in the Aoral District, Kampong Speu Province. The agreement is 5 years with an option to renew a further 5 years and Zhong Fu will pay HLH Cambodia the agreed amounts per agreement from the cassava planting projects. (Closing Price: $0.023, +15.000%)

Source: Phillip Securities Research - 27 Dec 2013