STI:         +0.62%     to     3,143.3           KLCI:         -0.60%     to     1,824.0
JCI:         +1.16%     to     4,441.6           SET:          -1.45%     to     1,277.0
HSI:         +0.49%     to     22,902.0         HSCEI:     +0.52%     to     10,201.8
Nifty:       +1.27%     to     6,320.9           ASX200:   +0.64%     to     5,245.4
Nikkei:    +2.50%     to     15,808.7         S&P500:   +0.52%     to     1,848.4

MARKET OUTLOOK:
By Joshua Tan, Head of Research

MACRO DATA:

China
China's new bank lending slowed while growth of broad money supply also eased in December, implying that the People's Bank of China (PBOC) has been trying to rein in shadow financing and to contain local government debt levels.

Chinese banks made 482.5 billion yuan worth of new yuan loans in December, below November’s 624.6 billion yuan. Meanwhile, the broad M2 money supply increased 13.6 percent y-o-y in December, lower than November’s 14.2 percent growth. For 2013, new bank loans rose 8 percent from the previous year to 8.89 trillion yuan, slowed modestly from 10 percent in 2012.

China's total social financing aggregate, a broad measure of liquidity in the economy, remains unchanged at 1.23 trillion yuan in December, the same stance as the preceding month. For 2013, total social financing rose 9 percent from the previous year to 17.29 trillion yuan, plunging from 23 percent in 2012.

Singapore
November’s retails sales fell 8.7 percent on-year, pulled back by lower motor vehicle sales, according to the Department of Statistics Singapore. Excluding motor vehicles, retail sales climbed 0.4 percent. On month-over-month basis, the seasonally adjusted retail sales figure rose marginally by 0.1 percent in November. Annual retails sales growth stood at a revised figure of 9.6 percent shortfall in October.

India
Wholesale annual inflation fell to a 5-month low of 6.16 percent in December, on lower vegetable prices, providing headroom to the Reserve Bank of India (RBI) to ease interest rates and prop up growth.

USA
Wholesale prices in the U.S. climbed in December for the first time in three months to cap the smallest annual increase in five years, showing companies face little pressure to charge more. The 0.4 percent increase in the producer-price index matched the median estimate of 79 economists surveyed by Bloomberg and followed a 0.1 percent drop in November. The so-called core measure, which excludes food and energy, climbed more than forecast, led by the biggest surge in tobacco costs since 2007.
 

Regional Market Focus

Singapore

• The Straits Times Index (STI) ended +19.5 points higher or +0.62% to 3143.25, taking the year-to-date performance to -0.68%.
• The FTSE ST Mid Cap Index gained +0.28% whiles the FTSE ST Small Cap Index gained +0.44%. The top active stocks were SingTel (+0.29%), DBS (+0.64%), Keppel Corp (-0.09%), JES (+11.11%) and OCBC (+0.31%).
• The outperforming sectors today were represented by the FTSE ST Basic Materials Index (+3.23%). The two biggest stocks of the FTSE ST Basic Materials Index are Midas Holdings (+1.01%) and Geo Energy Resources (unchanged). The underperforming sector was the FTSE ST Oil & Gas Index, which declined -0.03% with Keppel Corp’s share price declining -0.09% and Sembcorp Industries’ share price remaining unchanged. The FTSE ST Financials Index gained +0.39%.
• The short term consolidation is continuing after an unsuccessful breakout at resistance at 3170 as we mentioned 2 weeks ago.
• We have a longer term bullish bias due to macro fundamentals.
• Immediate supports at 3075, 3050 and 3000.

Thailand

• Thai stocks fell on Wed, bucking regional trend. The market succumbed to heavy selling pressure in late trading as anti-government protests dragged on and the Feb 2 election would go ahead as scheduled.
• Domestic political developments would continue to be a key factor that would set the tone for the Thai stock market amid the anti-government People’s Democratic Reform Committee (PDRC)’s ‘Bangkok Shutdown’ rally which has continued for a fourth day. Today the market’s focus would also turn to the National Anti-Corruption Commission (NACC)’s decision on whether to press charges with those in connection with alleged irregularities in the rice-pledging scheme as it could cause Yingluck Shinawatra to stop working as caretaker PM.
• In a worst-case scenario, we assume the current political situation would eventually lead to a deadlock or a violent riot. The downside target for the SET index could be seen at 1200 and 1150 points. However, we believe any market weakness may be tempered by buying orders from more new trigger funds which are slated to be launched for the time being and expectations that the Bank of Thailand’s Monetary Policy Committee would cut policy interest rate at its Jan 22 meeting. 
• The short-term strategy is to ‘sell the rallies, buy the dips’ in a trading range of 1260-1300 points. Equity exposure should also be maintained at 25% of the short-term portfolio.
• Resistance for the SET index is seen at 1300-1310 points and support at 1260-1240 points today

• The Jakarta Composite Index (JCI) climbed Wednesday (15/11), as most of Asian equity markets advanced on positive leads from Wall Street a day earlier. The JCI rose 50.823 points, or 1.16%, to close at 4,441.594. The LQ45 index gained 10.719 points, or 1.45%, to 752.461. Seven of the nine main stock sectors finished in green on Wednesday, led by miscellaneous industry sector that surged 3.56%, trailed by consumer goods sector with 2.28%-gain, and finance sector with 1.06%-rise.
• Strong performance on the US markets on Tuesday (14/11) fuelled equities in Asia the following day, with most of the major stock indexes ended higher on Wednesday. In the US, better-than-expected retail sales data for December buoyed stocks, and painted hopes that the world’s largest economy will improve this year. US retail sales rose 0.2% in December and 0.7% if automotive sales were not included.
• 162 shares gained as compared to 107 shares that declined Wednesday on the Indonesia Stock Exchange, where 4.75 billion shares worth IDR 6.76 trillion changed hands on the regular market. Foreign investors’ fund returned quite significantly in the last two days, netted in a total purchase of IDR 1.08 trillion on Wednesday.
• Indonesian stocks will likely to extend gains today, as signs of improvement in the US economy lifted sentiments across markets. We expect the JCI to advance today, and peg its near-term range at between 4,372 and 4,494.

• HSI gained 110 points or 0.5% to 22,902. CEI rose 52 points or 0.5% to 10,201. Trading volume was HKD59.601 billion.
• HK market was firmer, tracking overnight rebounding U.S. markets. Lenovo (992.HK), the largest PC maker in the world, was the best-performed blue chip with 5.5% gain. Tencent (700.HK) gained 3.1% and led the benchmark index up.
• Smartphone related stocks outperformed. Tongda Group (698.HK), Coolpad Group (2369.HK) and SIM Tech (2000.HK) surged 11.3%, 14.2% and 5.1% respectively.
• Lottery stocks out-performed with Rexlot Holdings (555.HK) and China Lotsyn (1371.HK) up 20.2% and 7.6% respectively. But technically over-bought signal showed.
• China cement sector out-performed on positive profit alert. CNBM (3323.HK) and Anhui Conch (914.HK) gained 7.5% and 5.9% respectively.
• Technically, HSI remained in a downward trend but we expect a key support at 250-MA. The next resistance and support will be at 23,000 and 22,601 respectively.

Morning Note
Company Highlights

UOL Group Limited announced that URA awarded the tender submitted by UOL’s wholly-owned subsidiary, UOL Overseas Investments Pte Ltd for the land parcel at Upper Paya Lebar Road at a tender price of S$392,300,000. (Closing price: S$5.98, -0.993%)

Global Logistic Properties Limited announced it will commence development of GLP Yachiyo, a 72,000 square metre (sqm) (775,000 feet (sq ft)), multi-tenant logistics facility in Greater Tokyo. The project is expected to be completed in October 2015, with a total estimated development cost of JPY11.1 billion (US$106 million). GLP Yachiyo project is the ninth development under GLP Japan Development Venture, a 50/50 joint venture between GLP and the Canada Pension Plan Investment Board that was formed in August 2011. The Venture has an investment capacity of US$2.2 billion and has committed a total investment of JPY 112.9 billion (US$1.1 billion) to-date. (Closing price: S$2.94, -0.339%)

Tritech Group Limited announced that its wholly -owned subsidiary, SysEng (S) Pte Ltd (SysEng), had on 14 January 2014, been awarded a S$3.751 million contract for the Supply of Services for Real-Time Monitoring of Waterways by the Public Utilities Board (PUB). SysEng has been appointed by the PUB to provide services including supply, installation and maintenance of water resistance / weatherproof CCTVs, cabling works, solar panels, power supply and all ancillary and real-time online continuous monitoring system on a subscription basis to monitor storm water flow and facilitate maintenance. (Closing price: S$0.46, -%)

Source: Phillip Securities Research - 16 Jan 2014