STI:         +0.49%    to    3,149.8            KLCI:        +0.92%    to    1,861.1
JCI:         +0.24%    to    4,213.0           SET:           -0.75%    to    1,298.7
HSI:         +0.27%    to    23,243.2         HSCEI:      -0.04%    to    10,830.1
Nifty:       +0.56%    to    6,313.8           ASX200:    -0.06%    to    5,324.1
Nikkei:    +0.03%    to    16,178.9         S&P500:    -0.03%    to    1,841.4

MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

Thailand
Industrial production fell for an eight straight month in November, to a seasonally adjusted -10.6 percent from a year earlier, after logging a -4.0 percent in the preceding month, based on Office of Industrial Economics Thailand. On month-on-month basis, output rose 0.54 percent in November, ending a streak of four on-month declines.

However, Thailand recorded a current account surplus of nearly $2.3 billion in November following October’s $376 million surplus, despite that exports fell 4 percent that month from a year ago, said the Bank of Thailand (BOT).
 

Regional Market Focus

Singapore

• The Straits Times Index (STI) ended 15.40 points higher or +0.49% to 3,149.76, taking the year-to-date performance to -0.55%.
• The FTSE ST Mid Cap Index gained +0.22% while the FTSE ST Small Cap Index gained +0.07%. The top active stocks were Charisma Energy (-4.88%), DBS (+0.71%), Golden Agri-Resources (+0.94%), OEL (+5.09%) and UOB (+0.81%).
• However, 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.

Indonesia

• The Jakarta Composite Index (JCI) climbed 10.146 points, or 0.24%, to finish at 4,212.980 on Friday (27/12). Leading the gain on Friday was agriculture sector that surged 3.20%, followed by property, construction and real estate sector with 0.95%-gain, and basic industry sector with 0.67%-rise. The LQ45 index ticked up 0.285 points, or 0.04%, to close at 701.482.
• Agriculture stocks advanced Friday, on expectation that CPO production will increase next year. Shares of Astra Agro Lestari (AALI) gained 1.23% to IDR 24,650, Smart (SMAR) surged 15.83% to IDR 6,950, and Sampoerna Agro (SGRO) climbed 3.09% to IDR 2,000. From the corporate front, XL Axiata (EXCL), Indonesia’s second largest telecommunication company by subscriber numbers, acquired Axis Telekom Indonesia from Teleglobal Investment for USD 865 million. EXCL will seek shareholders’ approval on Jan. 22 while aiming to get the go-ahead from the Financial Service Authority (“OJK”) by Feb. 28.
• 145 shares advanced and 96 shares declined Friday on the Indonesia Stock Exchange, where 2.06 billion shares with a total value of IDR 2.37 trillion changed hands on the regular board. Foreign investors’ transactions on both regular and negotiated boards netted in a total sale of IDR 4.61 trillion.
• Indonesian stocks may rise in modest pace today, as last trading day this year could prompt for buying of undervalued stocks, despite the chance that trading volumes could be thin. We expect the JCI to gain moderately today and peg its near-term support and resistance at 4,162 and 4,227, respectively.

• The Bourse extends its gains. The market trended upwards from its early hours to reach its intra-day peak at 5,882.28 (gaining 34 points), however as at the daily closure the benchmark ASPI settled slightly lower at 5,876.66 gaining 28.17 points or 0.48%.  The S&P SL20 too closed positive gaining 17.51 points or 0.54% to settle the day at 3,240.63. As at the day’s close, the total market capitalization moved up to LKR 2.44Tn, charting a year to date gain of 12.79%. The market PER & PBV stood at 15.27x and 1.98x respectively. The aggregated turnover for the day amounted to LKR 1.33Bn, with nearly half of this flowing in by way of off-market deals. Under the sectorial summary, Beverage Food & Tobacco (BFT) sector stood out as the prime contributor providing LKR 997.72Mn and the Diversified Holdings (DIV) sector added LKR 150.49 to the daily turnover. Moreover, the two sectors BFT & DIV collectively made account to nearly 90.00% of the daily aggregated turnover. Price gainers outstripped the price losers by 122:51. During the day, shares totaling up to 14.45Mn shares changed hands, recording a momentous gain of 134.87% compared with the previous trading day. Foreign participants maintained their bullish stance for the fourth consecutive trading day, to record a net foreign inflow of LKR 13.91Mn; this was resulted by foreign buying worth LKR 122.90Mn and selling which amounted to LKR 108.98Mn.Further on this pushed the year to date net foreign inflow to LKR 23.53Bn.
• The Christmas week commenced on a gloomy note with the bourse exhibiting sluggish activity across the boards, further resulting in the lowest volume and turnover for the year being charted on Thursday, this was a result of Investors taking a breather during the festive season. However the trend reversed on Friday where the benchmark index re-entered the green terrain while extending its gain witnessed during the previous trading day as well. The benchmark ASPI and S&P SL20 gained 19.30 (0.33%) and 12.46 (0.39%) to close the week at 5,876.66 and 3,240.63 respectively. The turnover for the week was LKR 1.96Bn supported by 7 crossings, recorded a dip of 43.81% compared to the previous week’s turnover. During the week a total of 63.13Mn shares changed hands, indicating a drop of 28.62% compared to the previous week. Foreign purchases for the week which amounted to LKR 428.64Mn outpaced the foreign sales of LKR 177.56Mn resulting in a net foreign inflow of LKR 251.08Mn. Looking at the FOREX markets, the rupee continued to appreciate during the week reaching a highest level in two months, currently the USD is selling at LKR 132.23/- and buying at LKR 129.27/-.

• HSI gained 63.69 points or 0.27%. CEI lost 4.33 points or -0.04% to 10,830.
• Tencent Holdings Ltd (700.HK) was the top gainer, gaining 2.98% to 483.2.
• Hang Lung Properties Ltd (101.HK) was the top loser, losing -1.84% to 24.
• The HSI continues to respond positively to signs of a stabilizing Chinese economy as Premier Li Keqiang comments that conditions are in place for a stable Chinese economy and markets.

Morning Note
Company Highlights

Riverstone Holdings Limited refers to the acquisition of land located at Lot 23826, Kawasan Industri Kamunting Raya, Mukim Assam Kumbang, Taiping, Perak, Malaysia and construction of a new glove factory building at the said land to house production facilities by the Company’s wholly-owned subsidiary, Sinetimed Consumables Sdn Bhd (“Sinetimed”) which was announced on 5 August 2013. Sinetimed had awarded the following contracts to companies incorporated in Malaysia: I. Construction of 3 new double former and 3 new single former glove production dipping lines for a total contract sum of RM18,564,000.00. The said new glove production dipping lines are expected to be completed by third quarter of 2014. When completed, the Group’s production capacity is expected to be increased by 1 billion gloves to 4.1 billion gloves per annum. II. Provision of mechanical and engineering works and firefighting systems to the existing under-construction factory building for a total contract sum of RM3,243,000.00. It is expected to be completed by third quarter 2014. (Closing Price S$0.730, +0.6%)

Oriental Group Ltd refers to the earlier announcement dated 14 August 2013 in relation to (i) the lease of production facilities from Jiangyin Dingsheng Jinshu Yayan Co., Ltd (“Vendor”) and (ii) the cessation of the Vendor from being an interested party of the Group after the disposal of the equity interests in the Vendor by Jiangyin Jincheng Steel Co., Ltd. on 23 May 2013. The Board announced that its indirect wholly owned subsidiary, Jiangyin Chengsheng Machinery Manufacturing Co. Ltd. has on 27 December 2013, entered into an agreement with the Vendor to acquire the Production Facilities for a total price of RMB 21.5 million (approximately S$4.47 million). (Closing Price S$0.138, -0.7%)

Changjiang Fertilizer Holdings announced that the Company, through its wholly-owned subsidiary Changjiang Huafei (Hunan) Co., Ltd has entered into a memorandum of understanding dated 27 December 2013 with Yueyang City Xinsheng Fuhefei Co., Ltd (the “Vendor”), in relation to a potential acquisition of the Vendor’s business assets involving, inter alia, the production of compound fertilisers. The consideration payable for the Acquisition is approximately RMB136.73 million, and is arrived at based on a valuation as conducted by a valuer commissioned by the Vendor. The Consideration comprises (i) the value of the present assets of the business (equivalent to approximately RMB55.99 million), which includes construction-in-progress production facilities; and (ii) payment for the land asset (equivalent to approximately RMB 80.74 million). (Closing Price -, -)

OKP Holdings Limited announced that the tender for improvement to roadside drains at Chai Chee Road / New Upper Changi Road by the Company's wholly-owned subsidiary, Eng Lam Contractors Co (Pte) Ltd, had been accepted by PUB.
The amount of the Contract is S$3,997,000 and the term of the Contract is from 30 December 2013 to 29 September 2014. (Closing Price S$0.335, -4.3%)

Source: Phillip Securities Research - 30 Dec 2013