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ASEAN STOCK WATCH Asean Affairs   5  April  2011

Asean Market Outlook

Shayne Heffernan

Asean Shares will consolidate gains today after a flattish overnight session on Wall St.

Palm Oil, Coal and Manufacturing are among the sectors best to own today.

The S&P 500 traded around the flat line during the session, testing the resistance at 1,334 above which it has not closed since February. The level is twice the 12-yr low hit on March 9, 2009, and not far from 1,344, the S&P's highest since June 5, 2008 The DJIA .DJI closed + 23.31 pts, or 0.19 percent, at 12,400.03.

The Standard & Poor's 500 Index .SPX was up .46 pts, or 0.10 percent, at 1,332.87.

The NAS Composite Index .IXIC was off .46 pts, or 0.01 pt, at 2,789.19.

In Bangkok Yesterday the Stock Exchange of Thailand (SET) composite index on Monday gained 14.31 points, or 1.34 percent, to close at 1,078.66 points. The market value was 41.94 billion baht, with 6.18 billion shares traded.

Shayne Heffernan Best Buys today are:

Bangkok listed Lee Feedmill has been upgraded to a strong buy with a 2012 price target of 7 Baht.

Trading Statistics (as of 01 Apr 2011)

P/E 9.34 Dvd. Yield(%) 6.40

P/BV 1.18 Market Cap. (M. Baht) 2,435.82

Lee Feed Mill Public Co., Ltd., was established on 16 August 1983, with initial registered capital of 20 million baht. The Leelasithorn group is the company’s major shareholder. The company was listed on the Stock Exchange of Thailand on 26 January 1990 and became a limited public company on 7 March 1994. Current paid-up registered capital is 490 million baht.

Its first feed mill was located in Muang District, Nakhon Pathom. Subsequently in 1988 and 1990, a second feed mill and silo were built, both in Muang District, Saraburi, under Lee Pattana Feed Mill Co., Ltd., and Lee Pattana Silo Co., Ltd. Both of these are subsidiaries with shares of 95 and 99.5 percent, respectively, held by Lee Feed Mill Public Co., Ltd.; both were granted investment promotion, and in the next four years, the company expanded its parent stock-chicken farm and chick hatchery for the production of broiler chicks for the market. Investment promotion was also granted to the hatchery, located in Chon Dan District, Phetchabun.


Saha-Union Public Company Limited, an investment holding company, engages in the manufacture, import, and distribution of textile, electronic components, plastic, rubber, and metal products in Thailand and internationally.

Its manufacturing division involves in the production and distribution of textile and fabric related products, such as zippers, weaving and knitting yarns, embroidery thread, fabrics, garments, buttons, and ready-to-wear clothes; sports shoes; plastic products for various industries and a range of applications, including vacuum bottles, adhesive tape, cellulose tape, weaving and elastic braids, and elastic bands; rubber products; and stainless-non corrosive metal products.

The company’s Electronic and Computer division produces hard disk drives, as well as distributes computers and peripherals, banking automatic teller machines, ready-to-use computer programs, and Internet services. Its Energy division involves in generating energy through its thermal power and cogeneration plants. In addition, the company provides dormitory rental; and printing services, as well as offers elastics braids and webbing, stainless steel products, vacuum bottles, and adhesive tapes. Saha-Union Public Company Limited was founded in 1972 and is headquartered in Bangkok, Thailand.

Yesterdays most active were

BANPU closed at 786.00 baht, up by 14.00 or 1.81 per cent.

PTTEP closed at 193.50 baht, up by 9.00 or 4.88 per cent.

PTTCH closed at 162.50 baht, up by 5.50 or 3.50 per cent.

PTT closed at 368.00 baht, up by 11.00 or 3.08 per cent.

IRPC closed at 6.10 baht, up by 0.15 or 2.52 per cent.

Malaysia should see good growth in Plantation Stocks

Yee Lee has seen a strong run forward since 2009, based on the low P/E this stock should rally back toward $1.50 according to Shayne Heffernan.

Shayne Heffernan strong buy, Sime Darby, the world’s largest listed palm oil producer, will make its first investment in Africa, with the establishment of plantations in Liberia in April.

Sime Darby is Malaysia’s second-largest company by value, with a market capitalisation of 47 billion ringgit. It owns more than 5,000 square kilometres (1,930 square miles) of palm oil plantations in Malaysia and Indonesia.

Sime Darby was granted a 63-year concession in 2009 to develop 220,000 hectares (543,500 acres) of land in Liberia, will begin planting oil palm on 10,000 hectares in the first phase.

“This foray is most significant as it allows us to explore opportunities for further growth and development in other emerging markets and regions,” said Franki Anthony Dass, executive vice-president of Sime Darby Plantation.

Sime Darby, which already has palm oil plantations in Malaysia and Indonesia, will invest 70 million ringgit ($23 million) in the project, Dass added in a statement.

In Kuala Lumpur index gained 0.10 points or 0.01% to 1555 on Monday.

Most Active DBE, PERISAI, HWGB, KURASIA, ECM, DAYA, KENCANA, HWGB-WB, BENALEC and DIGISTA. Trading volume increased to 1694.15 mil shares worth RM2237.80 mil as compared to Friday's 1518.65 mil shares worth RM2152.12 mil.

The Winners were PETCHEM (+12 sen to RM7.49), MAYBANK (+5 sen to RM9.06), CIMB (+3 sen to RM8.37), YTL (+10 sen to RM7.60) and DIGI (+12 sen to RM28.76).

The Losers were GENTING (-8 sen to RM11.00), GENM (-4 sen to RM3.80), MISC (-6 sen to RM7.81), IOICORP (-2 sen to RM5.74) and SIME (-2 sen to RM9.30). Market breadth was positive with 486 gainers as compared to 370 losers.

The Finance Index increased 0.36 percent to 14199.31 points, the Properties Index up 0.81 percent to 1115.21 points and the Plantation Index down 0.07% to 7829.13 points.

In Manila yesterday the Philippine Stock Exchange index was up by 1.93 percent, or 79.89 points, to finish at 4,209.43 as a looming telecom consolidation provided a favorable backdrop to the entire market.

The index mirrored the 1.9-percent gain by Shayne Heffernan strong buy PLDT which finished at P2,400 per share and was the most actively traded stock. The leading telco has a 15-percent weight on the main index.

San Miguel is on the move, there was a block sale estimated at P21 billion involving San Miguel Corp. The company was to make an announcement later in the day about the transaction, a company spokesperson said.

Outside the P21-billion block sale, San Miguel shares were up by 1.4 percent to P162.50 on Wednesday.

A stock trader said 300 million San Miguel shares were crossed at P70 per share. Shayne Heffernan best buys today are San Miguel and Seminara

San Miguel Corporation (SMC) is a Philippines-based food, beverage and packaging Company. Its product portfolio includes beer, hard liquor, and non-carbonated non-alcoholic beverages, processed and packaged food products, meat, poultry, flour, dairy products and a number of packaging products.

The company food operations includes the production and marketing of fresh, ready-to cook and processed chicken, pork and beef, milk, butter, cheese, margarine, ice cream, flour products, snack foods, coffee, cooking oil and animal and aquatic feeds. It is also engaged in the development and management of real estate properties.

San Miguel Corporation has strategic partnerships with international companies, among them Nihon Yamamura Glass Company, Ltd., Hormel Foods International Corp. of the United States and Kirin Holdings Company Ltd. of Japan.

It has five breweries in the Philippines and operates one brewery each in Indonesia, Vietnam, Thailand, Hong Kong and two breweries in China.


Valuation Ratios

Company Industry Sector S&P 500
P/E Ratio (TTM) 19.77 31.30 16.73 17.34
P/E High – Last 5 Yrs. 68.07 72.34 1,400.81 89.10
P/E Low – Last 5 Yrs. 3.61 23.41 14.78 12.28
Beta 0.28 0.84 0.59 1.32
Price to Sales (TTM) 2.48 7.35 1.99 2.16
Price to Book (MRQ) 0.75 1.12 2.72 2.94
Price to Tangible Book (MRQ) 2.71 2.73 9.39 5.26
Price to Cash Flow (TTM) 16.33 5.14 11.06 70.38
Price to Free Cash Flow (TTM) 9.74 7.91 20.31
% Owned Institutions - - - -



Company Industry Sector S&P 500
Dividend Yield 1.67 2.00 1.62
Dividend Yield – 5 Year Avg. 1.97 0.97 1.26 2.50
Dividend 5 Year Growth Rate 0.00 6.03 9.17 -5.45
Payout Ratio(TTM) 51.39 73.45 15.90 42.46


Growth Rates

Company Industry Sector S&P 500
Sales (MRQ) vs Qtr. 1 Yr. Ago 67.79 2.55 7.25 10.10
Sales (TTM) vs TTM 1 Yr. Ago 21.53 0.85 7.23 10.17
Sales – 5 Yr. Growth Rate -0.06 11.06 11.69 7.35
EPS (MRQ) vs Qtr. 1 Yr. Ago 382.26 -63.27 17.41 78.43
EPS (TTM) vs TTM 1 Yr. Ago -80.77 - - -
EPS – 5 Yr. Growth Rate 43.73 -2.56 8.11 4.50
Capital Spending – 5 Yr. Growth Rate -20.98 15.18 8.89 3.42


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% coal handling services.

The corporation has a long term supply contract with National Power Corporation (NPC) for its power plants in Calaca, Batangas.

In Manila yesterday the Philippine Stock Exchange index closed 17.87 points lower or 0.46 percent at 3,878.44.

The day’s rally was supported by P936 million in net foreign buying, which supported the value turnover of P5.8 billion. Large cap stocks and selected second-liners led the 102 gainers against 36 decliners and 39 unchanged stocks.

The Winners were Megaworld, Metrobank, EDC, AGI, Aboitiz Power, Filinvest Land, First Gen, BPI, First Holdings, Metro Pacific Investments, Ayala Corp., Banco de Oro, Lepanto Mining, SM Investments, Nickel Asia and ICTSI. Doris C.Dumlao

Last week, PLDT cemented its leading position in the telecom sector with a deal to gobble up third largest telco Digitel.

PLDT, led by the First Pacific group of Hong Kong, agreed last week to pay P74.1 billion through a swap of PLDT shares at P2,500 each.

Value turnover amounted to P5.8 billion. There were 102 gainers versus 36 decliners and 39 unchanged stocks.

The market traded within a range of 11.22 points between an intra-day high of 1565.04 and a low of 1553.82 during the session.

Perusahaan Perkebunan London Sumatra Indonesia, listed plantation company, decreased 1.1 percent to Rp 2,325, despite a good rally in palm oil and other agricultural products during the day.

Plantations fell after UOB-Kay Hian Holdings cut Southeast Asia’s plantation industry to “underweight” from “market weight” due to a report that stated palm oil prices were expected to peak in the first half of 2011 and weaken in the second half.

HCM believe that peak will be caused by a rapid rise in Plantation companies output and we remain bullish on the sector for 2011-2012.

Bumi Resources, Asia’s biggest exporter of power-station coal, declined 2.3 percent to Rp 3,250, and Berau Coal Energy, Indonesia’s fifth-largest coal miner, fell 1.9 percent to Rp 530.

Power-station coal prices fell 2.2 percent to $121.13 per ton in the week ended April 1 at Australia’s Newcastle port, which serves as a benchmark for Asian coal prices.

This represents an oversold situation on Bumi and Berau and both rate as strong buys.

Yesterday in Jakarta the JCI began the week flat losing 7.44 points, or 0.2 percent, to close at 3,700.05. About 3.1 billion shares worth Rp 4.5 trillion ($517.5 million) changed hands, with gainers beating decliners 114 to 84.

The rupiah strengthened 0.4 percent to trade at 8,660 against the US dollar on Monday, from 8,697 at Friday’s close. It is the currency’s strongest level since May 2007 as overseas funds continue to pour into holdings of the nation’s assets to benefit from growth in Indonesia’s economy, after data from the Central Statistics Agency (BPS) showed slowing inflation for a second month.

International Nickel Indonesia, the nation’s largest nickel producer, lost 1.1 percent to Rp 4,725, while Aneka Tambang, the nation’s second-largest nickel producer, dropped 1.1 percent to Rp 2,300. Nickel lost 0.4 percent to $25,500 per ton during mid-day trading on the London Metals Exchange.


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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