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ASEAN STOCK WATCH Asean Affairs   15  April  2011

Asean Markets to Hit Highs in April

Shayne Heffernan

Asean Markets look set to head towards new highs over the rest of the month of April. US earnings have been good and investor sentiment has overcome Japan and Europe debt worries.

Overnight in the USA,
The DJIA .DJI closed a 14.16 pts, or 0.12 percent, to 12,285.15.
The Standard & Poor's 500 .SPX closed up .11 ts, or 0.01 percent, to 1,314.52.
The NAS Composite .IXIC closed minus 1.30 pt, or 0.05 percent, to 2,760.22.
The DJIA's Top percentage gainers were Coca-Cola Co (NYSE:KO), up 1.5%, Kraft Foods Inc (NYSE:KFT), up 1.7 percent and Merck & Co (NYSE:MRK), up 1.5 percent.

Jakarta will see consolidation today, the market should resist a continued fall and may well rally.

Shayne Heffernan Best Buys are Bumi, Aneka Tambang

Bumi has reached our price target for this year however we have revised our expected price of Bumi for 2012 to 5200.

Bumi Resources Minerals, a unit of Indonesia’s top coal producer, has earmarked $515 million for capital expenditure in the next two years to develop its assets.

“We are planning to spend $515 million to expand our various units in the mineral mining sector,” Yuanita Rohali, chief financial officer and finance director at BRM, said on Thursday.

BRM is a holding company Bumi Resources’ non-coal assets. It does not do carry out any exploitation of its own, though it is developing a number of mining sites in Africa and Indonesia and is exploring other potential projects.

It also holds a 24 percent stake in miner Newmont Nusa Tenggara, an Indonesian unit of the US mining giant that controls the lucrative Batu Hijau gold mine. Bumi Resources spun off BRM in early 2010, and the new company went public in December.

Herwin Wahyu Hidayat, head of investor relations at BRM, said the company planned to spend $100 million to fund exploration at one of its units, zinc miner Dairi Prima Mineral in South Sumatra. In total, he said, BRM aimed to spend $240 million on exploration.

State gold and nickel miner Aneka Tambang has started construction of a $450 million chemical-grade alumina plant in Tayan, West Kalimantan, corporate secretary Bimo Budi Satriyo said.

The plant, which will have a capacity of 300,000 tons of aluminum oxide per year, is a joint venture between Antam and Japanese chemical firm Showa Denko.
“The factory will process our bauxite reserves to produce 300,000 tons of CGA. It will add up to $200 million in annual revenue to our unit,” Bimo said.
Antam, which controls 80 percent of the joint venture, held a ground-breaking ceremony for the plant on Monday. Operations are expected to begin in 2014.

“The commodities will be exported to Japan and also to the domestic market. They can be used to produce abrasives, integrated circuits and LCD screen panels,” Bimo said.

Capital will come from internal funds from the two partners, he continued, as well as loans from the Japan Bank for International Cooperation and debt guarantees by the Japan Oil, Gas and Metals National Corporation.

In Jakarta yesterday the JCI lost 26.43 points, or 0.7 percent, to close at 3,707.98. About 3.5 billion shares worth Rp 4.1 trillion ($475.6 million) changed hands, with decliners beating gainers 119 to 76.

The rupiah weakened 0.1 percent to trade at 8,661 to the US dollar on Thursday, from 8,664 the previous day. The currency has appreciated 3.6 percent this year.

Profit-taking dragged down the Jakarta Composite Index on Thursday, with concerns about emerging-market stocks and possible monetary tightening also hurting sentiment.

Philippines is shaping up to take a run at a new all time record high in the weeks to come, the 30 Asean Stars are great buying now, and the continued inflow of hot money makes the Philippines worth another look.

Shayne Heffernan best Buys today are First Philippine, Ayala

First Philippine Holdings Corporation (FPHC) is a holding company.
The Company, along with its subsidiaries, is engaged in investments in real and personal properties including, but not limited to, shares of stocks, notes, securities and entities in the power generation, manufacturing and construction, and other service industries.

FPHC is 42.79 percent owned by Benpres Holdings Corporation of the Lopez family. Its subsidiaries include First Gen Corporation, First Gas Holdings Corporation, First Gen Renewables, Inc., FG Bukidnon Power Corporation, First Philippine Realty Development Corporation and First Philec Solar Corporation, among others.

Valuation Ratios
 Sector    S&P 500
P/E Ratio (TTM)
P/E High – Last 5 Yrs.
90.07 78.13   88.95
P/E Low – Last 5 Yrs.
16.48     15.62
0.49    0.51    1.32
Price to Sales (TTM)
Price to Book (MRQ)
0.41 0.50
Price to Tangible Book (MRQ)
Price to Cash Flow (TTM) 
6.19 71.05
Price to Free Cash Flow (TTM)
9.38    9.21    56.55
% Owned Institutions   – 
–  –  – 
Industry      Sector 
S&P 500
Dividend Yield
Dividend Yield – 5 Year Avg.
1.61 2.51
Dividend 5 Year Growth Rate 
6.70 -5.52
Payout Ratio(TTM)   4.60          
35.05 42.58
Growth Rates
S&P 500
Sales (MRQ) vs Qtr. 1 Yr. Ago   24.13       
Sales (TTM) vs TTM 1 Yr. Ago 
10.10   10.68 
Sales – 5 Yr. Growth Rate
10.09    10.14    7.33
EPS (MRQ) vs Qtr. 1 Yr. Ago 
101.91      138.11 
EPS (TTM) vs TTM 1 Yr. Ago
EPS – 5 Yr. Growth Rate 8.17      
Capital Spending – 5 Yr. Growth Rate 
24.39   26.68 3.42

Ayala Corp. is into property (Ayala Land, Inc.), banking (Bank of the Philippine Islands), telecommunications (Globe Telecom, Inc.), utilities (Manila Water Co., Inc.), power generation exploration (Michigan Power, Inc. under a joint venture with Diamond Generating Asia Ltd. of Mitsubishi Corp.), electronics (Integrated Microelectronics, Inc.), car dealership (Ayala Automotive Holdings Corp.), business process outsourcing (LiveIt Solutions, Inc.) and international investments (AG Holdings, Ltd.).

In Manila Ayala Corp.,the Philippines oldest conglomerate, has approved a 20% stock dividend and an increase in authorized capital by more than half to P56.2 billion to ensure flexibility in fund raising.

Ayala’s new funding will allow expansion into power and infrastructure, the listed company said in a disclosure yesterday.

Following a special meeting of Ayala Corp, the board of directors approved the declaration of a 20 percent stock dividend to holders of its common shares.

It also approved an increase of the authorized capital stock from P37 billion to P56.2 billion.

The Ayala board approved the increase in the number of its common shares to 900 million from 596 million at a par value of P50 per share.

The firm plans to create “40 million Series C preferred shares, with a par value of P100 per share and the same basic features as our Series A and B preferred shares.”

Ayala Corp., in an e-mail, said Series A and B preferred shares are redeemable, cumulative and non-participating, non-convertible, non-voting, and do not have pre-emptive rights.

Meanwhile, the Securities and Exchange Commission will finalize the record date for the stock dividend.

The stock dividend will increase the company’s outstanding common shares to 583 million from 485 million, or an additional P33.418 billion based on the closing price of P341.00 per share yesterday.

The company last declared a 20 percent stock dividend in 2008 and has consistently paid regular cash dividends of P4.00 per share.

Valuation Ratios
Industry    Sector    S&P 500
P/E Ratio (TTM)       
39.07   29.46
24.20    18.46
P/E High - Last 5 Yrs.   
P/E Low - Last 5 Yrs.  
17.58   14.35    104.01    12.38
1.23   1.38   1.20    1.33
Price to Sales (TTM)     
5.61    2.27
Price to Book (MRQ)        
3.50 1.22 
1.21   2.84
Price to Tangible Book (MRQ)     
1.37    1.44 
Price to Cash Flow (TTM)  
25.78      12.44 
6.23    8.13
Price to Free Cash Flow (TTM)     
9.05   4.61    35.89
% Owned Institutions    
 --  --  --
Sector    S&P 500
Dividend Yield      
1.72    1.53
Dividend Yield - 5 Year Avg.         
1.08   0.78 
Dividend 5 Year Growth Rate    
10.63    7.94   -5.73
Payout Ratio(TTM)      
15.31    32.94
Growth Rates
  Industry    Sector    S&P 500
Sales (MRQ) vs Qtr. 1 Yr. Ago   
15.51      24.52   
Sales (TTM) vs TTM 1 Yr. Ago  
10.73     20.75  
13.70    13.80
Sales - 5 Yr. Growth Rate   
11.84   22.89    18.36    7.49
EPS (MRQ) vs Qtr. 1 Yr. Ago  
35.25      266.19 
64.89   59.95
EPS (TTM) vs TTM 1 Yr. Ago       
 --  --  --
EPS - 5 Yr. Growth Rate     
5.82     24.16    
Capital Spending - 5 Yr. Growth Rate      
10.46    4.16

Thirty blue-chip stocks listed on the Philippine Stock Exchange are included in the 210 ASEAN Stars stocks in the Asean Exchange, the newly launched common website of seven bourses in Southeast Asia.

They include Lepanto Consolidated Mining Co.; Philex Mining Corp.; DMCI Holdings Inc.; Aboitiz Equity Ventures Inc.; Ayala Corp.; International Container Terminal Services Inc.; ABS-CBN Broadcasting Corp.; Jollibee Foods Corp.; SM Investment Corp.; JG Summit Holdings Inc.; Universal Robina Corp.; Banco de Oro Unibank Inc.; Bank of the Philippine Islands; China Banking Corp.; Metropolitan Bank & Trust Co.;

Alliance Global Group Inc.; Ayala Land Inc.; Filinvest Land Inc.; Megaworld Corp.; Robinsons Land Corp.; SM Prime Holdings Inc.; Globe Telecom Inc.; Philippine Long Distance Telephone Co.; Aboitiz Power Corp.; First Gen Corp.; First Philippine Holdings Corp.; Energy Development Corp.; Manila Water Co. Inc.; Manila Electric Co.; and Metro Pacific Investments Corp.

The Asean Exchange, a team-up of seven bourses from six members of the Association of Southeast Asian Nations was launched April 8 and represents 3,613 listed firms with total capitalization of some $1.98 trillion.

Hot Money
The Bangko Sentral ng Pilipinas said the inflows in the first quarter might be sustained throughout the year. This should help keep a comfortable level of reserves of dollars and other foreign currencies for the Philippines in 2011, thereby improve the country’s ability to service its loans denominated in foreign currencies and pay for more imports.

Net inflow (gross inflows less outflows) of foreign portfolio investments amounted to $245 million in the first three months of the year, up by more than three times the $76 million registered in the same period in 2010.

Gross inflows reached $1.55 billion, while the outflows amounted to $.131 billion, the central bank said.

Most of these inflows were placed in government securities and shares of companies listed in the Philippine Stock Exchange.

“Jitters about the continuing protests and violence in the Middle East and North Africa redirected funds to peso GS [government securities] which offered comparatively higher yields on a regional basis,” the BSP said.

The Top 5 sources of foreign portfolio investments were Singapore, the United Kingdom, the United States, Luxembourg and Hong Kong.

Bursa Malaysia has a bold plan to dramatically increase turnover, that makes today’s best buys in Kuala Lumpur the banks according to Shayne Heffernan.

Shayne Heffernan best Buys are CIMB and Maybank

In Kuala Lumpur yesterday the KLCI index lost 9.79 points or 0.64% to close at 1525.


The Winners were PBBANK (+4 sen to RM13.04), AMMB (+1 sen to RM6.40), YTL (+1 sen to RM7.46) and RHBCAP (+2 sen to RM8.62).

The Losers were CIMB (-8 sen to RM8.20), TENAGA (-11 sen to RM6.06), AXIATA (-6 sen to RM4.74), MAYBANK (-5 sen to RM8.75) and MISC (-15 sen to RM7.61).

Trading volume decreased to 965.84 mil shares worth RM1532.23 mil as compared to Wednesday’s 1173.74 mil shares worth RM1672.49 mil.

The Finance Index fell 0.57% to 13938.27 points, the Properties Index dropped 0.78% to 1099.22 points and the Plantation Index down 0.34% to 7678.91 points. The market traded within a range of 14.75 points between an intra-day high of 1540.55 and a low of 1525.80 during the session.

Market breadth was negative with 174 gainers as compared to 651 losers.

Bursa Malaysia Bhd will lift the market turnover velocity close to 50 per cent within two years from 33 per cent last year, said its chief executive officer, Datuk Tajuddin Atan.

“The velocity for the last two years, seems to be stagnating at that point in time. Changing velocity in a market like this involves many issues like participants, market intermediaries, products and services and it takes a while to roll out,” Tajuddin told reporters after Bursa Malaysia’s annual general meeting (AGM) and extraordinary general meeting (EGM) here Thursday.

He said strategies had been worked out to achieve stock market’s target.

“The direction set by the board remains intact. We’ll focus in strengthening the market and the key areas of the market … equity, derivatives and being the leader in sukuk listing, that is the area that we need to capitalise,” he said.

He said Bursa Malaysia was committed to ensuring that the market remained sustainable and vibrant, in order to remain competitive in the region.

Singapore is rapidly becoming an economic powerhouse, and everyone should have exposure to the Singapore Dollar and core assets of the Country.

Shayne Heffernan Best Buys are Keppel Land and Capitaland.

Keppel Land Limited is a holding, management and investment company. The principal activities of its subsidiary companies consist of property investment and development, fund management and property related services. As an office developer in Singapore, Keppel Land contributes to defining and refining the city’s skyline with landmark developments, such as Ocean Financial Centre and Marina Bay Financial Centre in the Central Business District.

Keppel Land is also Asia’s premier home developer with waterfront homes at Keppel Bay and Marina Bay. In September 2009, it acquired Keppel Tianjin Eco-City Investments Pte. Ltd. (55% interest), which wholly owns Success View Enterprises Limited and Keppel Tianjin Eco-City Holdings Pte. Ltd. In December 2009, it acquired its second township site in Shenyang, China.

CapitaLand Limited is a real estate company. The Company is engaged in investment holding, real estate development, investment in real estate financial products and real estate assets, investment advisory and management services, as well as management of serviced residences. The Company’s real estate and hospitality portfolio, which includes homes, offices, shopping malls, serviced residences and mixed developments, spans more than 110 cities in more than 20 countries. The subsidiaries and associates of CapitaLand include Australand, CapitaMall Trust, CapitaCommercial Trust, Ascott Residence Trust and CapitaRetail China Trust
K-Reit Asia said on Thursday first quarter distribution per unit (DPU) rose 35 per cent from a year ago, helped by contributions from recently acquired properties.

The DPU for the three months ended March 31 was 1.79 Singapore cents, up from 1.33 Singapore cents in the year-earlier period.

K-Reit said its net property income for the quarter rose 7.6 percent to $14.9 million, as contributions from recently acquired properties offset the loss of income from two divested Singapore office buildings.

At the end of the first quarter, K-Reit had an asset size of about $3.5 billion, comprising four commercial properties in Singapore and two in Australia.
K-Reit is managed by Keppel Land, Singapore’s third largest developer.

Perennial China Retail Trust is relaunching its Singapore IPO and is looking to raise up to S$840 million ($669 million) through the sale of 1.1 billion units
In Singapore yesterday the Straits Times Index at 158.92, down 0.41 percent, or 13.16 points .

About 1.2 billion shares exchanged hands.

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.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


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