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ASEAN STOCK WATCH Asean Affairs   26  April  2011

Asean Markets will post a mixed day

Shayne Heffernan

Asean Markets will post a mixed day after a very slow Easter Monday around the world.

Mining companies in Asean will see gains as Commodities benefited from Strong buying interest this morning, but sentiment faded as the session progressed.

Gold prices rose to a new record of 1519.20 oz. this morning, and faded later in pit trade, closing with a fractional gain at 1510.60 oz.

Silver settled with a 3.3 percent gainer at 47.56 oz after it rose to as high as 49.82 oz, its best mark in more than 30 years and a tap at the 50 psych level.

Crude oil prices finished with a fractional loss at 112.17 bbl after trading above 113 bbl in early pit trade. Although Crude Oil prices finished off of their highs, they also finished above session lows, which were set just above 111 bbl.

Nat Gas prices were unable to rebound. Instead, turned lower just before the start of pit trade and did not recovered. Contract prices finished the session with a 0.2 percent loss at 4.38 per MMBtu.

Jakarta is heading toward 4000 as local fundamentals improve.

In a note to traders Bakrie Sumatera Plantations was described as being extremely undervalued. Shayne Heffernan noted that with a current PE under 4 and strong regional growth Bakrie Sumatera Plantations could rally over 200 percent in the coming year. Shayne Heffernan raised his 2012 price target for the group is 1000 IDR. Shayne Heffernan has lifted his outlook from strong buy to a Must Own on Bakrie Sumatera Plantations and confirmed a price target of 1000 Rupiah.

The company has approximately 100,000ha of plantations under its management (including plasma estates and Agri Resources BV). Approximately 20,000 ha of the planted area is devoted to rubber plantations whilst the remaining land is planted with oil palms.

All of the group’s plantations operations are ISO14001 certified, which ensures stringent controls on environmental management in its estate, mills and factories. The company was also admitted as a member of the Roundtable on Sustainable Palm Oil (RSPO) since May 2007 and the RSPO principles will further guide the group’s environmental management policies.

Jakarta Composite index slipped 10.58 points, or 0.3 percent, to 3,790.50, falling for the first time in four days.

Indonesia’s rupiah rose to a seven- year high on speculation the United States will keep interest rates near zero this week, boosting fund inflows into higher-yielding emerging markets. Benchmark bonds advanced.

The Federal Reserve will keep its target rate for overnight loans between banks between zero and 0.25 percent when it meets on April 27, according to all 80 economists in a Bloomberg News survey. The rupiah has gained 4.4 percent this year, the second- best performance among Asia’s 10 most-traded currencies as Indonesia’s benchmark interest rate of 6.75 percent attracted fund inflows.

The nation’s continued economic growth, improving credit rating and sustained capital inflows are expected to continue and push up the index. HCM say the 6,000 level was possible in 2014 as long as the country stayed clear of any financial crises in the future.

Continued bullish sentiment from investors about Indonesia’s growing economy and political stability will help take the local stock market to new heights, according to a pair of securities firms executives. Indonesia currently has about 400,000 domestic investors.

The Indonesia Stock Exchange (IDX) has 423 listed companies with a combined market capitalization of Rp 3,205 trillion ($371.8 billion). The JCI reached a record high on Thursday, closing at 3,801.08, before declining 0.3 percent to close at 3,788.54 on Monday.

The JCI climbed 46 percent last year to 3,703.51, the strongest performer among Asia-Pacific countries in 2010.

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Manila is trading at an all time high best buys are the stocks the rally has forgotten.

Shayne Heffernan Best Buys are Semirara, Aboitiz, Jollibee.

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.

Philippine Stock Exchange index gained 56.6 points or 1.32 percent to finish at 4,331.37.

Services led the day’s upswing, rising by 2.3 percent while financial, property and mining/oil counters all went up by over 1 percent.

Value turnover amounted to P4 billion. There were 96 advancers as against 46 decliners while 23 stocks were unchanged.

PLDT, AGI, First Gen, Megaworld, Lepanto A, Metrobank, AEV, URC, Philex, EDC, Metro Pacific Investments, FLI and FPH led the index higher. Non-index stocks Lopez Holdings and Digitel also gained on heavy volume.

On the other hand, DMCI, Semirara, Manila Water, Aboitiz Power and Jollibee traded lower.

Aboitiz Equity

Aboitiz Equity Ventures, Inc. (AEV) is a holding and management company of the Aboitiz Group, a conglomerate in the Philippines. AEV’s core businesses, conducted through its various subsidiaries and affiliates, are grouped into five main categories: power distribution and generation, financial services, food manufacturing, transport, and portfolio investments (parent company/others). AEV’s power segment is engaged in power generation and sale of electricity. The food manufacturing segment is engaged in the production of flour and feeds, and swine breeding.


Valuation Ratios

Company Industry Sector S&P 500
P/E Ratio (TTM) 12.02 4.79 4,631,374,703.50 18.34
P/E High - Last 5 Yrs. 9.24 37.96 66.73 90.53
P/E Low - Last 5 Yrs. 6.03 17.22 14.19 12.30
Beta 0.66 1.34 1.14 1.31
Price to Sales (TTM) 2.88 0.40 1.45 2.25
Price to Book (MRQ) 3.91 0.66 1.12 3.10
Price to Tangible Book (MRQ) 4.10 0.80 1.50 5.59
Price to Cash Flow (TTM) 8.12 3.86 10.48 65.17
Price to Free Cash Flow (TTM) 18.88 10.02 34.64 60.65
% Owned Institutions -- -- -- --



Company Industry Sector S&P 500
Dividend Yield 3.77 1.02 1.32 1.66
Dividend Yield - 5 Year Avg. 4.35 1.11 1.19 2.48
Dividend 5 Year Growth Rate 34.08 10.27 9.14 -4.83
Payout Ratio(TTM) 14.90 5.80 17.83 43.69


Growth Rates

Company Industry Sector S&P 500
Sales (MRQ) vs Qtr. 1 Yr. Ago 55.68 5.55 12.07 10.07
Sales (TTM) vs TTM 1 Yr. Ago 169.40 6.27 7.42 10.41
Sales - 5 Yr. Growth Rate 15.58 5.92 7.93 7.42
EPS (MRQ) vs Qtr. 1 Yr. Ago 130.42 79.42 134.28 77.22
EPS (TTM) vs TTM 1 Yr. Ago 194.20 -- -- --
EPS - 5 Yr. Growth Rate 23.14 23.77 12.14 4.62
Capital Spending - 5 Yr. Growth Rate 54.27 13.24 15.69 3.51


Jollibee Foods is a Philippines-based Corporation engaged in the development, operation and franchising of restaurants under the brand name Jollibee.

In the Philippines, the Company also has, as subsidiaries, Fresh N Famous Foods, Inc., which develops, operates and franchises restaurants under the trade names Chowking, Greenwich, Delifrance, Manong Pepe’s and Red Ribbon Bakeshop, Inc. (through Red Ribbon Holdings, Inc.), which develops, operates and franchises restaurants under the Red Ribbon trade name.

It also has subsidiaries and affiliates overseas, which develop and operate its international brands, Yonghe King, Chun Shui Tang, Hongzhuangyuan and Lao Dong.

At Dec. 31, 2009, there were 686 Jollibee stores in the Philippines, 355 franchised and 331 Company owned. There were also 57 Jollibee stores overseas, including the United States, Vietnam, Hong Kong, Brunei and Jeddah. They offer food products that are prepared on-site based on original Company recipes.

Thai Stocks Preview, PTT, Banpu, Sri-Trang

Thailand will not see much of a sell-off today, and the best buys, PTT, Banpu, Sri-Trang.

PTT Public Company Limited is a Thailand-based company engaged in the in upstream petroleum, downstream petroleum, coal business and other related businesses.

Its business activities include the exploration for, the development and production of, natural gas, condensate and crude oil through subsidiaries; the procurement, transmission, processing, marketing and distribution of natural gas and gas products; the marketing of refined products through various distribution channels including commercial, retail, reseller and international markets, and the import and export of crude oil, condensate, petroleum feedstock and petrochemical products.

Banpu Public Company Limited (Banpu) is a Thailand-based company engaged in coal mining and power businesses. The Company has operations in Thailand and overseas, including Indonesia and the People’s Republic of China.

Banpu supplies coal through its mines in the Lampang and Payao Provinces and via imported coal from Indonesia. The Company’s current operations in Indonesia are located in Jorong, Indominco, Kitadin, Trubaindo and Bharinto. In China, Banpu has mining projects in Daning, Hebi and Gaohe.

Sri Trang Agro-Industry Public Company Limited is a Thailand-based company engaged in the manufacture of rubber products.

The Company’s product includes rubber smoked sheet (RSS), which are used as a raw material in the production of other products, including automobile tires, pipes, shoes and parts of automobiles; block rubber, which is used in the automobile tire industry, and used as substitute to grade-3 rubber smoked sheet, and concentrated latex, which can be used as a raw material in the production of latex examination gloves, condoms, and elastic rubber thread.

Its customers are categorized in three groups: automobile tire manufactures, such as Bridgestone, Michelin, Yokohama, Hankook, Continental, Goodyear, Pirelli, and tire manufacturers in China; trading companies in Japan and other importers in Asia, China, Taiwan, Korea, America and Europe, and domestic customers, including automobile tire, motorcycle tire, and elastic rubber thread manufacturers.

In Bangkok the Stock Exchange of Thailand (SET) composite index on Monday gained 0.14 point, or 0.01 percent, to close at 1,105.43 points. The market value was 23.99 billion baht, with 3.29 billion shares traded.

BBL closed at 176.00 baht, down by 0.50 baht or 0.28 percent.

IRPC closed at 6.30 baht, down by 0.05 baht or 0.79 percent.

SCB closed at 118.50 baht, up by 2.00 baht or 1.72 percent.

CPF closed at 30.00 baht, up by 0.50 baht or 1.69 percent.

BANPU closed at 760.00 baht, down by 4.00 baht or 0.52 percent.

In Singapore today the Singapore dollar strengthened to a new record high of 1.2317 against the U.S. dollar. After some late profit taking the Singapore dollar was trading at 1.2355 against the USD.

The Singapore dollar hit new highs several times this year and is well on the way to reach parity by 2015, as more and more investors seek a safe haven from the ever falling US dollar many have turned to Asian investments giving most regional currencies a strong currencies a lift.

The U.S. dollar fell below the support level at S$1.2600, hitting a new low of S$1.2592 on the day.

Singapore equities have had a solid week and their outlook is one of the most positive in the world.

The Singapore Dollar will Reach Parity in 2015 according to Shayne Heffernan.

The Singapore dollar exchange rate with respect to the US dollar has mostly fluctuated between SGD$ 1.5 and SGD$ 1.8 per 1 US$ since 2003. The Growth:

1.7422 (2003)

1.6902 (2004)

1.6644 (2005)

1.5889 (2006)

1.507 (2007)

1.4377 (2008)

1.279 (2010)

Singapore dollar began weakening in early 2009 due to a decline in regional prices and reduced demand for market assets, and its value floated around the SGD1.5/USD mark for the initial months of 2009.

However the path is clear, as Singapore develops the Singapore Dollar will see parity.

Singapore shares closed a bit lower on light volume and limited price action Monday, as most of the markets in Europe and some in Asia were closed for the Easter Holiday. The benchmark Straits Times Index fell 7.01 pts or 0.22 percent to close at 3,187.72.

Trade volume was 1.06B/shrs worth 1.22B Singapore Dollars (US$0.98B). Decliners outnumbered advancers 267 to 163, while 841 stocks closed unchanged.

Among the top actives, Hutchison Port Holdings Trust inched up 1.1 percent to US$0.95. UBS Research started with “buy” rating and a target price of US$1.17/share for the trust on its commitment to a high dividend payout, and its nature as a pure and mature container port operator. The research house said, “We believe HPH Trust’s focus, strategy and long history provide it with a competitive advantage over peers.”

Rubber firm GMG Global closed flat at 28.5 Singapore Cents. It said its net profit Q-1 more than doubled to 15.5M Singapore Dollars from 6.3M Singapore Dollars a year ago, on the back of a strong surge in the average selling price of rubber.

STX OSV Holdings fell 4.1 percent to 1.17 Singapore Dollars. The Korean parent company STX Group said it may sell a 17.3 percent stake of STX OSV after mid-May. Shopping mall owner CapitaMalls Asia fell 2.7 percent to 1. 79 Singapore Dollars. It said its net profit in Q-1 fell 24 percent to 49.1M Singapore Dollars, weighed by a reduction in contributions from 3 malls that were divested to its real estate investment trusts (REITs).

Among the Top gainers, Jardine Strategic gained 0.6 percent to US$28.50, and Singapore Airlines was one of the Top losers declining 1.7 percent to close at 14.14 Singapore Dollars. (1 USD = 1.24 Singapore Dollars)

Malaysian Listed Kossan Rubber Industries has been upgraded to a strong buy with a 2012 price target of 6 MYR issued by Shayne Heffernan today.

Kossan Rubber reported another record performance in its final quarter (1 October to 31 December) of FY2010 with approximately 21 percent increase in Profit After Taxation (“PAT”) as compared to the similar quarter of its preceding financial year. This made its full year PAT increased significantly by 77 percent to RM118.2 million, as compared to RM66.7 million in 2009.

Sales revenue hit record high at RM1.05 billion, a 24 percent increase as compared to RM842.0 million of its previous year. The growth in sales revenue was mainly attributed to higher quantity of glove sold and improved orders for its technical rubber products.

Overall earnings performance for the past four quarters has been consistent despites of tougher operating environment arising from stiff increase in latex prices (well over 60 percent increase y-o-y) and strengthening RM against the US dollar. The EBITDA margin was resilient at 17.5 percent in 4Q2010 as compared to 17.6 percent in 3Q2010 despite the 8 percent decline in sales revenue q-o-q. This was largely attributed to better product-mix with higher sales in products that offered more resilient margin.

Kossan Rubber Industries Bhd was established in 1979. Back then, Kossan offered a range of cutless bearings that were often used in the marine industry.



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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