STI:         +0.00%     to     3,133.7           KLCI:        -0.07%     to     1,814.1
JCI:         +0.56%     to     4,477.5           SET:          -0.20%     to     1,290.5
HSI:         +0.21%     to     23,082.3         HSCEI:     +1.06%    to     10,326.7
Nifty:       +0.40%     to     6,339.0           ASX200:   -0.22%     to     5,319.8
Nikkei:    +0.16%     to     15,821.0         S&P500:   +0.06%    to     1,844.9

MARKET OUTLOOK:
By Joshua Tan, Head of Research

MACRO DATA:

Thailand
Bank of Thailand unexpectedly held its key interest rate unchanged at 2.25 percent amid political crisis. The central bank lowered its growth forecast for 2013 to below 3 percent and the estimate for this year to about 3 percent (from its earlier projection of around 4 percent). Citing “the strong economic fundamentals”, the money authority is positive that the economy will ride through the short-term risks and is ready to employ monetary tools when time comes.

Malaysia                                                                 
Malaysia's inflation rate jumped to 3.2 percent in December as compared to the same period last year, after a 2.9 percent increase in November, according to the data released by the Department of Statistics. The higher cost of food and transportation, which advanced 4.5 percent and 5 percent respectively, were the main contributors to the December’s inflationary pressures, driving Malaysia’s inflation rate to its highest since November 2011.

On a month-on-month basis, the inflation rate rose 0.3 percent, the same rate recorded in the previous period. Meanwhile, consumer prices climbed 2.1 percent for the whole 2013.

Japan
The Bank of Japan refrained from boosting unprecedented easing as accelerating inflation marks progress in its bid to stamp out 15 years of falling prices in Asia’s second-biggest economy. Governor Haruhiko Kuroda’s board stuck to its pledge to expand the monetary base by an annual 60 trillion to 70 trillion yen ($671 billion) today after a two-day meeting in Tokyo, in line with the forecasts of all 36 economists surveyed by Bloomberg News.

Australia
Australian inflation unexpectedly accelerated above the mid-point of the central bank’s target range last quarter, reducing scope for policy makers to lower interest rates further. The trimmed mean gauge of core prices rose 2.6 percent in the three months through December from 12 months earlier, the Bureau of Statistics said in Sydney today, compared with the median forecast of 23 economists for a 2.3 percent gain. The consumer price index advanced 2.7 percent, compared with economists’ forecast for a 2.4 percent increase.
 

Regional Market Focus

Singapore

• The Straits Times Index (STI) ended -0.02 points lower or -0.00% to 3133.74, taking the year-to-date performance to -0.98%.
• The FTSE ST Mid Cap Index gained +0.55% while the FTSE ST Small Cap Index gained +0.04%. The top active stocks were DBS (-1.27%), CapitaLand (+0.35%), KLW (-6.52%), GLP (+1.38%) and SingTel (+0.57%).
• The outperforming sectors today were represented by the FTSE ST Utilities Index (+1.91%). The two biggest stocks of the FTSE ST Utilities Index are Hyflux (-0.85%) and HanKore (-3.42%). The underperforming sector was the FTSE ST Technology Index, which declined -0.53% with Silverlake Axis’s share price remaining unchanged and STATS ChipPAC’s share price declining -1.49%. The FTSE ST Basic Materials Index declined -0.43%.  The FTSE ST Financials Index declined -0.04%.
• 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 pulled back to test support level of 1280 points before losses were later pared with the SET index finishing the session down a mere 2.61points at 1290.49 points on Wed though the Bank of Thailand’s Monetary Policy Committee voted 4-3 to leave its policy interest rate on hold at 2.25%.
• US equities ended lower on Wed as a mixed bag of corporate earnings failed to give investors the confidence to push equities higher while traders awaited key economic data especially jobless claim numbers.  
• Today more choppy downside action could be in store for Thai stocks due to the absence of fresh strong positive triggers though the SET index lost little ground yesterday after the emergency decree took effect for the first day and the Bank of Thailand stayed pat on rates. We believe if the SET index could rise towards 1300 points, it would be followed by another round of profit taking. Foreign selling spree continued after sentiment remained weighed down by political worries. The People’s Democratic Reform Committee (PDRC) plans to sue the government after it placed the capital under a state of emergency yesterday while Constitutional Court judges will meet to consider whether to accept or reject the petition to rule who has the authority to postpone the election. However, institutional buying would help limit the market’s downside after return of buying orders from the launch of new trigger funds. 
• Resistance for the SET index is expected at 1300-1310 points and support at 1285-1280 points today.

• The Market moved higher ending the day on an upbeat sentiment, closing above the 6,200 boarder for the first time after 19 August 2013. The market trended upwards from its early hours to reach an intra-day peak of 6,220.21 gaining 66.67 points (over 1.0%), despite closing slightly lower at 6,212.67 nevertheless posting a gain of 59.13 points or 0.96%. The S&P SL20 gained 0.88% (or 30.10 points) to close green at 3,458.26. Three off-market deals totaling up to LKR 206.38Mn amounted to 14.76% of the daily aggregated turnover (LKR 1.40Bn), which indicated a substantial rise of 237.58% as against its previously recorded. More importantly, nearly LKR 1.20Bn flowed in by way of transactions which were dealt on-board.   Under the sectorial summary, Diversified Holdings (DIV) sector stood out as the prime contributor providing LKR 480.86Mn, accounting to 34.39% of the total turnover. Bank Finance & Insurance (BFI) sector added LKR 363.51Mn to the daily turnover. During the day, shares totaling up to 108.65Mn changed hands, recording a momentous gain of 241.49% compared with the previous trading day. With regard to the movements in share prices, a total of 141 companies posted gains while 60 posted drops. As at the day’s closure, the total market capitalization soared to LKR 2.58Tn while extending the year to date gain to over 5.0%. The market PER & PBV stood at 16.73x and 2.06x respectively. Foreign investors maintained their bullish stance once again, resulting in a net foreign inflow of LKR 290.66Mn, resulted by foreign buying worth LKR 597.96Mn and selling of LKR 307.30Mn. Looking at the local FOREX, the rupee depreciated further against the USD, currently the USD is selling at LKR 132.24/- and the buying rate stands at LKR 129.36/-.

• The Hang Seng Index gained 49 points at 23,082, a gain of 0.21%, while the Hang Seng China Enterprises Index rallied 108 points at 10,327, up 1.06%. Market turnover increased. Shares worth HK$71.4B exchanged hands.
• The A-share market rallied. The Shanghai Composite Index closed at 2,052 points, up 43 points.
• Technically, HSI re-gained 23,000 levels. But we see it as technically rebound before breaking the resistance at 23,433. HSI is vulnerable to further correction. The next resistance and support will be at 23,272 and 22,600 respectively.

Morning Note
Company Highlights

Ntegrator International Ltd, a leading regional communications network specialist and systems integrator, has started 2014 with four major contracts, worth S$4.02 million, from repeat customers in the region. These contracts are for the supply of equipment and services to Vietnam, Myanmar and Singapore. All the four contracts are slated for delivery in the current financial year and are expected to bring positive contributions to the Group’s financial performance for the financial year ending December 31, 2014. (Closing price: S$0.063, 0%)

Stratech Systems Limited is pleased to announce that its iFerret™ intelligent Airfield/Runway Surveillance and Foreign Object & Debris (FOD) Detection System has won in a Tender for the Runway Debris Management System (RDMS) at Dubai International Airport in the United Arab Emirates (UAE). The contract, awarded by Dubai Aviation Engineering Projects (DAEP), is for the installation of the iFerret™ intelligent Airfield/Runway Surveillance and Foreign Object & Debris (FOD) Detection System. Winning the Dubai Tender is significant because of the three systems approved by the FAA, the Stratech iFerret™ has beaten one and will be replacing the other. The Company estimates that this project may contribute between $5.9 million to $10.6 million to its revenue in the current financial year and would have a material impact on its financial results. (Closing price: S$0.02, +17.647%)

Rex International Holding Limited is pleased to announce that its jointly-controlled entity, Lime Petroleum Norway AS has been awarded five new offshore licences in the 2013 Awards in Predefined Areas (APA 2013), according to a Norwegian Ministry of Petroleum and Energy press release dated 21 January 2014. REX has further grown our portfolio to 12 in Norway, and 21 internationally. REX has already within the six-month mark of its listing in July 2013, surpassed its 12-month goal of growing its portfolio to 20 licences, from the initial 10 licences. (Closing price: 0.60, +2.564%)

CapitaLand has climbed 19 spots to 58th from its 77th position in 2013 to be ranked in the Global 100 Most Sustainable Corporations in the World (Global 100) by Corporate Knights. CapitaLand is also listed in the Sustainability Yearbook, one of the world’s most comprehensive publications on corporate sustainability. CapitaLand remains the first and largest real estate company in Asia to achieve ISO 14001 and OHSAS 18001 certifications for its Environmental, Health and Safety Management System across 15 countries with its investment properties across Asia and Europe. (Closing price: S$2.90, +0.346%)

Global Logistic Properties Limited has signed nine new lease agreements totaling approximately 180,000 square meters (1.9 million square feet) in multiple locations across Japan. This is the highest level of leasing recorded by GLP Japan in a single month. All of these new leases were signed by third-party logistics providers or wholesale distributors to cater to domestic consumption. Six of the leases were signed with first-time GLP customers in Japan. (Closing price: S$2.94, +1.379%)
Keppel Land Limited was listed in the prestigious Global 100 Most Sustainable Corporations in the World 2014. It takes 17th position globally, placing it tops among Asian as well as real estate companies worldwide. At the same time, Keppel Land has also retained its position in The Sustainability Yearbook 2014 for the fourth consecutive year as one of the top 15% companies worldwide in sustainability leadership. (Closing price: S$3.26, -0.912%)

Aspial Corporation Limited is pleased to announce that the Company through its subsidiary WCL-Southbank (Vic) Pty Ltd has entered into a Sale and Purchase Agreement to acquire a property located at 70 Southbank Boulevard & 115-131 City Road, Melbourne, Victoria from 70 Southbank Boulevard Pty Ltd. The total purchase consideration for the Property is A$42,300,000. The Property is a freehold low-rise commercial building with a total land area of approximately 2,625 square metres. The Property is strategically located at the corner of Southbank Boulevard and City Road, in the central of Southbank. At present, the Property has two active planning permits; one for redevelopment into a 388- metre tower subject to aviation clearance. The Company intends to build a 312-metre tall residential and commercial tower. When completed, it will be the tallest building in Melbourne with more than one million square feet of gross floor area. (Closing price: S$0.425, -1.163%)

Source: Phillip Securities Research - 23 Jan 2014