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ASEAN STOCK WATCH Asean Affairs   14  April  2011

Asean markets to open lower

Shayne Heffernan

Asean Stocks to Consolidate

The Asean Market will open higher today and seek to consolidate recent gains, strong economic signals from Singapore and Thailand will help support the Asean Stars today.

In Overnight trading in the USA, The DJIA .DJI closed up 7.41 pts, or 0.06 percent, at 12,270.99.

The Standard & Poor's 500 .SPX closed up .26 pts, or 0.02 percent at 1,314.42.

The NAS Composite Index .IXIC closed up 16.73 pts, or 0.61 percent, at 2,761.52.

On the Commodities Front: Commodities finished the session mixed, with Energy (+1.1 percent) leading advancing sectors and industrials (-2.4 percent) leading the decliners.

May Crude Oil finished higher by 0.8 percent to 107.11 bbl, ending its 2 session sell off that saw prices drop by over 6.5 percent.

Heading into afternoon trade, Crude Oil did sell off into Red territory where it marked a low at 105.31, then rallied over 2 percent off those lows heading into the close to finish with a modest gainer on the session.

May Nat Gas finished higher by 0.9 percent to 4.14 per MMBtu.

It was a quiet session in precious metals (+0.7 percent), they spent most of the session pulling back from their morning highs.

Jun Gold finished + 0.1 percent to 1455.60 oz, and May Silver closed up 0.4 percent to 40.24 oz.

Jakarta will see more gains today based on the strong economic outlook over the next few years.

Shayne Heffernan best buys are

Clipan Finance Indonesia Tbk PT

PT Clipan Finance Indonesia Tbk is an Indonesia-based company engaged in the provision of financial services. The Company offers consumer financing, leasing and factoring.

It focuses its business activities on the consumer financing segment, particularly financing for second-hand cars. In addition, it also provides leasing financing for heavy equipment purchases, as well as factoring financing.

These financing facilities are provided through the Company’s branch network throughout Indonesia.

Adhi Karya (Persero) Tbk PT

PT Adhi Karya (Persero) Tbk has set its income target at IDR 9.1 trillion in fiscal year 2011 with net profit to rise to IDR 208 billion. According to Reuters Estimates, analysts were expecting the Company to report revenue of IDR 8.2 trillion and profit after tax of IDR 192 billion for fiscal year 2011.

PT Adhi Karya (Persero) Tbk is an Indonesia-based construction company. Its business segments are construction, which includes construction of roads and bridges, irrigation, ports, hotels, hospitals, schools and commercial buildings; engineering, procurement and construction (EPC), which is an extended business of the Company as a support to its core business, and investment, which covers the Company’s investment in the infrastructure business and related industries.

The Company's subsidiaries include PT Adhi Realty, Adhi Oman LLC, PT Duri Indah Raya, PT Adhicon Persada and Adhi Multipower, Pte., Ltd.


Valuation Ratios

P/E Ratio (TTM)   7.98                     


P/E High - Last 5 Yrs.
83.86 91.06 66.60   
P/E Low - Last 5 Yrs.
12.31 14.24   
Price to Sales (TTM)       
4.32    1.41   2.21
Price to Book (MRQ)   
0.55   1.09 3.07
Price to Tangible Book (MRQ)
0.62    1.46  
Price to Cash Flow (TTM)
31.45     10.36 
Price to Free Cash Flow (TTM)   --      
33.65    60.36
% Owned Institutions  -- -- -- --
Industry   Sector       S&P500
Dividend Yield    
Dividend Yield - 5 Year Avg. 
0.79   1.18
Dividend 5 Year Growth Rate 7.64         
9.23 -4.90
Payout Ratio(TTM)   26.21     
17.82  44.03
Growth Rates
 Industry  Sector S&P500
Sales (MRQ) vs Qtr. 1 Yr. Ago
12.13  10.02
Sales (TTM) vs TTM 1 Yr. Ago
5.76 7.38    10.43
Sales - 5 Yr. Growth Rate
7.98    7.48
EPS (MRQ) vs Qtr. 1 Yr. Ago
EPS (TTM) vs TTM 1 Yr. Ago
 --  --  --
EPS - 5 Yr. Growth Rate  
4.66 12.47  
Capital Spending - 5 Yr. Growth Rate -33.03           
27.99 15.86 3.48

 In Jakarta yesterday JCI gained 15.18 points, or 0.4 percent, to 3,734.41. About 3.8 billion shares worth Rp 4.8 trillion ($557 million) changed hands, with gainers beating decliners 120 to 80.

The rupiah gained one point to trade at 8,654 to the US dollar as the market closed on Wednesday, with slowing confidence in Japan’s economic recovery pushing investors to consider emerging markets.

Harum Energy, an Indonesian coal producer, rose 0.5 percent to Rp 9,150.

Shayne Heffernan strong buy International Nickel Indonesia gained 0.5 percent to Rp 4,900. President director Tony Wenas said on Wednesday that the company planned to boost output of the metal to 90,000 tons by 2013 from its estimated output of 73,000 tons this year. It also plans to spend $232 million on capital expenditure this year.

Another Shayne Heffernan strong buy Timah, rose 0.9 percent to Rp 2,850. Djunaedi, head of mining exports at the Trade Ministry, said refined tin shipments from Indonesia, the world’s largest exporter, rose to 9,051.46 tons in March from 6,181 tons in February as improved weather allowed increased output.

Shares of Bumi Resources, Indonesia’s biggest coal producer, advanced to the highest level in more than two and a half years following news it would pay down debt to China ahead of schedule.

Analysts said expectations of further earnings increases this year, thanks to the debt reduction plan and expectations of improved production, would boost investors’ appetite for the miner’s stock.

“People’s expectations on Bumi’s earnings have improved,” said Norico Gaman, head of research at BNI Securities. “A debt reduction at the same time as production capacity increases could mean that profit growth in 2011 will exceed that of 2010.”

Bumi’s shares rose 7.1 percent to Rp 3,400 (39 cents) on Wednesday, their highest level since Sept. 19, 2008, when they hit Rp 3,950.

Philippines has shown some strong growth over the 2010-2011, today the index should continue to consolidate and add to gains.

Shayne Heffernan best buys today are

Semirara Mining and PNB the 2 that led the day's decliners and now look oversold.

Semirara Mining

Semirara Mining Corporation is engaged in exploring, developing, and mining coal resources in Semirara Island. The Company is a subsidiary of DMCI Holdings, Inc. The Company generates 98% of its revenues through sales of coal and 2 percent coal handling services. The Corporation has a long term supply contract with National Power Corporation (NPC) for its power plants in Calaca, Batangas.

PNB fell 3.7 percent to P65 per share (after rising by 10 percent on Tuesday) as the bank explained that apart from the robust earnings posted for 2010, it was not aware of any reason for the previous day's price surge. Today we expect to see this one recover.

In Manila yesterday the Philippine Stock Exchange added 4.2 points, or 0.1 percent, to close at 4,203.68.

PLDT, AGI and Metrobank led the rally higher. Other stocks that gained on heavy volume for the day were Vista Land, DMCI, Aboitiz Power, SM Investments, Leisure & Resorts, Filinvest Land, Belle Corp. and Ayala Corp.

The index traded in negative territory but closed positively due to a surge in late-session buying. Modest gains eked out by the financial, holding firm, property and services counters compensated for the decline by the industrial and mining/oil counters, which fell by 1 percent and 2 percent, respectively.

Value turnover, however, remained thin at P4.29 billion. Despite the overall slight gain, there were only 46 advancers versus 75 decliners. There was modest net foreign selling of P137 million for the day.

The losers were EDC, Metro Pacific Investments, First Gen and Meralco.

In 1959, Malayan Sugar Manufacturing Co. Bhd was incorporated with the mission to set up a sugar refinery in Malaysia. Then, Malaysia was still dependent on imported sugar refined in Britain and Hong Kong. Three companies - one Malaysian and two Japanese - participated as joint venture partners to form Malayan Sugar Manufacturing Co. Bhd. (MSM). A triangle logo, as shown above, was chosen to represent the tripartite partnership of the three companies that formed MSM.

The Federal Land Development Authority’s (Felda) commercial arm, Felda Global Ventures Holdings Sdn Bhd (Felda Global Ventures) will list its sugar business – Malayan Sugar Manufacturing Co Bhd on the Main Board of Bursa Malaysia in July, Prime Minister Datuk Seri Najib Tun Razak confirmed.

In his keynote address at Invest Malaysia 2011 Conference here yesterday, the premier said the listing would boost Felda’s leading position in the sugar industry, providing the group with an opportunity to gain recognition in the capital markets and allowing it to realise its investment while retaining control of its asset.

“This means investors will be able to participate in a key industry, and it is a very positive development for the government’s objective of promoting Malaysia’s capital markets,” disclosedd Najib, who is also Finance Minister.

In an earlier report, Felda Global Ventures would also be planning to divest a number of other businesses. However, no further initial public offerings (IPOs) would be expected other than its sugar business this year.

Investment banking arms of CIMB Group Holdings Bhd and Maybank Bhd would be undertaking the US$200 million-US$300 million ((RM604.3 million-RM906.4 million) IPO of Malayan Sugar Manufacturing, according to a report by Reuters.

Felda Holdings is 49 percent controlled by the Felda Board and 51 per cent by Felda Investment Co-operative – the vehicle of Felda settlers and employees. Felda controls 850,000 hectares of plantation land and some RM1.5 billion in funds. Arguably the world’s largest oil palm plantation company, Felda owns 70 mills and seven refineries.

According to news reports, Malaysia’s current sugar imports largely from Australia  amount to about 1 million tonnes, which is about 90 percent of the raw sugar needs of the country’s four sugar refineries. While the present economies of scale would not seem to favour Felda – whose specialisation had been more towards in oil palm and rubber – the prospective listing of Malayan sugar should positively expand its forte in sugar business.

Bursa Malaysia looks set to open higher today and Shayne Heffernan best buys are Sime Darby and PBBank.

Sime Darby Berhad is a Malaysia-based investment holding company. Its six business segments are plantation, property, industrial, motors, energy and utilities, and others.

The company’s plantation segment is engaged in the production and marketing of fresh fruit bunches, crude palm oil, palm kernel, rubber and refining and marketing of palm oil related products.

Its property segment is engaged in developing and marketing residential, commercial and industrial properties and development land and management and provision of golf and other recreational facilities and services.

The company’s industrial segment is engaged in sales, rental and servicing of heavy equipment and its motors segment is engaged in the assembly and distribution of vehicles and the provision of after-sale services. Its energy and utilities segment is engaged in engineering design and fabrication, system integration, power generation, and treatment and supply of treated water.


Public Bank Berhad is engaged in banking, investment banking, financing, Islamic banking, stock-broking, sale and management of unit trusts, Leasing & Factoring underwriting of general insurance and investment holding. It operates in six segments.

Hire purchase operations are focused on the provision of passenger vehicle financing to all levels of customers. Retail operations focus on providing products and services to individual customers and small- and medium-sized enterprises.

Corporate lending operations cater to the funding needs of corporate customers. Treasury and capital market operations is involved in trading in treasury related products and services.

Investment banking operations caters to the business needs of corporate customers by providing financial solutions and direct lending. Fund management operations consist of sale and management of trust units funds. Others refer mainly to non-core operations such as property holding.

In Kuala Lumpur yesterday the market fell in the morning session, the KLCI rallied in the afternoon and the index gained 9.67 points or 0.63 percent to 1535.


The Winners were PETCHEM (+31 sen to RM7.36), AXIATA (+8 sen to RM4.80), CIMB (+9 sen to RM8.28), TENAGA (+10 sen to RM6.17) and MAYBANK (+6 sen to RM8.80).

The Losers were SIME (-6 sen to RM9.11), PBBANK (-6 sen to RM13.00), PETDAG (-12 sen to RM16.20), PPB (-2 sen to RM16.84) and UMW (-1 sen to RM7.33).

Market breadth was positive with 610 gainers as compared to 204 losers.

The Finance Index increased 0.53% to 14017.79 points, the Properties Index up 1.25% to 1107.89 points and the Plantation Index rose 0.42 percent to 7704.74 points.

Trading volume increased to 1173.74 mil shares worth RM1672.49 mil as compared to Tuesday’s 1088.19 mil shares worth RM1527.99 mil.

The market traded within a range of 21.86 points between an intra-day high of 1539.70 and a low of 1517.84 during the session.

Singapore will add to gains today, the local market looks strong and local news on Mapletree Commercial will help. Mapletree Commercial was 5 times oversubscribed they reported today.

Mapletree Commercial plans to sell 1.02 billion units, excluding an over-allotment option, it said in a prospectus last week.

The IPO of the real estate investment trust, managed by Singapore state investor Temasek's property arm, came back last week after it was delayed for two weeks, following a massive earthquake and tsunami that struck Japan and caused widespread panic-selling in equity markets

Sembcorp Industries , a rig-building and engineering conglomerate, said on Wednesday it is considering building water treatment plants as well as a large commercial, residential and industrial zone in eastern China.

One of its units, Sembcorp Utilities, has signed a letter of intent with China's Jinan Quancheng Water to explore the formation of a joint venture to build, own and operate water treatment plants in the east of Jinan City, the capital of China's Shandong province.

Another unit, Sembcorp Industrial Parks, signed a memorandum of understanding to consider building a 638-hectare international marine city in Shandong that will have commercial and residential developments as well as industrial and logistic zones focused on marine-related industries

In Singapore yesterday the Straits Times Index up 34.08 points, or 1.09 per cent at 3,172.08.

About 1.5 billion shares exchanged hands.

Gainers beat losers 332 to 144.

Shayne Heffernan brings more than 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over US$500m and 1 that reach a peak market cap of US$15billion. He has managed and overseen start-ups in Mining, Shipping, Technology and Financial Services.


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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

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