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ASEAN STOCK WATCH Asean Affairs   12 April 2012

ASEAN Markets Oultook, Bumitama Agri IPO

 By Shayne Heffernan Ph.D.

All eyes will be on the Singapore Listing of Bumitama today, priced at $0.75SGD Heffernan Capital Management Economist Shayne Heffernan sees the stock rising to $2SGD in a short period of time.

On LTN there has been more searches for Bumitama than the usual leaders AAPL and GOOG, this indicates how closely this is being followed around the World.

Palm oil, used in food and fuel, climbed to the highest in more than a year in Malaysia as South American soyabean supplies declined. In China, palm and soyabean oil rose to the costliest in more than six months.

The June-delivery contract advanced 1.3% to end at 3,604 ringgit ($1,176) a tonne on the Malaysia Derivatives Exchange, the most expensive close for a most-active contract since March 7, 2011. Futures advanced 5% this week, the fifth straight gain and the longest run in more than 16 months.

Major Shareholder IOI Corp in Malaysia is up about 25% since announcing the IPO.Malaysia’s IOI Corporation, now a controlling shareholder of Bumitama, will own 30 percent of the Indonesian firm after the IPO.
Bumitama Agri have some big name cornerstone investors for their Singapore IPO including UOB and Wilmar.

When it lists on April 12, Bumitama will join other palm oil firms listed in Singapore, including Wilmar International and Golden Agri Resources. Bumitama has one of the youngest palm oil plantations in Asia and owns 190,000 hectares of land, of which only 100,000 have been planted with palm oil, leaving room for more growth.

HCM are expecting the stock to double in a short period of time after the IPO from retail buyers, “most of the IPO stock has gone to Long-Only Funds and High Net Worth families in Asia.” Shayne Heffernan said today.
There is no more IPO stock available, it was over subscribed 31 times.

Overnight in the USA

Almost $800 billion was erased from U.S. equity values in the five days leading up to the first-quarter earnings season. The S&P 500 yesterday capped the longest drop since November on concern about Europe’s debt crisis and the U.S. jobs market. The decline drove the gauge to about 14 times reported earnings yesterday, below the average since 1954 (SPX) of 16.4.

Today’s gain extended this year’s rally in the S&P 500 to 8.9 percent as investors bought stocks amid better-than- estimated economic and corporate data. While S&P 500 per-share profit growth slowed to 0.8 percent during the first three months of the year, it will accelerate to 8.3 percent during all of 2012.


ADB forecasts Cambodia’s GDP growth at 6.5% in Y 2012

The Asian Development Bank (ADB) predicted that Cambodia’s Gross Domestic Product (GDP) will grow 6.5% this year, 0.3 percentage point lower than that of 6.8% last year, due to the sluggish economic growth in Europe and the United States, according to the Bank’s Outlook 2012 Update released Wednesday.

The ADB forecast is the same as the predictions by the International Monetary Fund and the World Bank, but lower than the 7% forecast by Cambodian government.

The report said that the country’s export-led sectors, including garment and footwear will remain the main sources of growth this year, with some new manufacturing industries beginning to emerge, such as automotive parts and assembly of small electric motors.

“The subdued economic outlook for the EU and the United States, Cambodia’s main export markets, suggests that GDP growth will edge down to 6.5% in Y 2012,” it said, adding that in Y 2013, growth is seen picking up to 7%, tracking the expected upturn in the Global outlook.

“Despite the worst floods last year in more than a decade and high levels of uncertainty and recession in the global environment, Cambodia is expected to exhibit healthy economic growth over the next 2 yrs,” said ADB Deputy Country Director and Senior Country Economist for Cambodia Peter Brimble.

Cambodia’s economy is supported by four key pillars, including garment exports, tourism, agriculture and real estate.

The report forecast that the country’s inflation in Y’s 2012 and 2013 is forecast to ease to about 5% on a year-average basis, from 5.5% last year. However, rising global Crude Oil prices early in Y 2012 may put the inflation forecast at risk, said Mr. Brimble.


ADB forecasts Philippine GDP to grow 4.8% in Y 2012

The Asian Development Bank (ADB) forecast Philippine economy to expand 4.8% in Y 2012 on back of increased public spending, investment, and private consumption.

Philippine GDP is likewise seen to hit 5% in Y 2013, according to ADB’s flagship annual economic publication, Asian Development Outlook 2012 which was released on Wednesday.

Neeraj Jain, ADB’s Country Director for the Philippines, said remittances and lower inflation will boost the consumption-led local economy. He added increased business confidence, higher public investment and accommodative monetary policy will also support the Philippine economy.

The ADB expects inflation in Y 2012 to ease to 3.7% on back thanks to stable Global commodity prices. The Peso is seen little changes against the USD.

The ADB also expects the export sector to recover this year, despite softening demand from Europe and China. Imports will pick up in line with higher consumer demand and investments.
The outsourcing industry will continue to expand and support economic growth.

ADB Chief Economist Changyong Rhee said the government will need “a sizable increase in new revenue” if it wants to meet its goal of trimming the budget deficit to two% of GDP in Y 2013.

The ADB said slow progress on key Millennium Development Goals, rising income inequality, an over-reliance on electronics exports and remittances, and industrial stagnation remain as drags on the economy. Weak infrastructure and cumbersome business environment has limited the creation of higher paying jobs needed to slash poverty incidence.

The ADB said the government needs to improve the country’s infrastructure, as well as the governance and business environment to sustain growth in the next few years.


An Indonesian minister said that the country will not export raw natural resources after Y 2014, and that it will renegotiate contracts with private companies processing the Country’s commodities, local media reported Wednesday.
Coordinating Economic Minister Hatta Radjasa said that all natural resources in Indonesia should be processed domestically.

“This is our commitment toward our natural resource endowment and environment and we have to be consistent,” Hatta said Tuesday during the inauguration of technology-based economy Technopolitan in Pangkalan Kerinci, Pelalawan, Riau.

He said that the export of natural resources had disadvantaged Indonesia and had hampered the development of downstream domestic industry.

“We have lost a lot of jobs and work hours,” Hatta said, citing that the government had distributed the plan to investors and had asked them to submit their road maps regarding the establishment of downstream business units in their operational areas.

“For those who fail to submit their plans, we will stop their operations or we will reduce their capacity here,” he was quoted by the Jakarta Post as saying.

The government will provide incentives, including tax allowances and holidays for investors who establish downstream businesses, Hatta said.

“We respect investors and their contracts. We only want changes so that our people can create something more and produce valuable products made from our natural resources,” he said.

Shayne Heffernan Ph.D.  
Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
3 Raffles Place #07-01
Bharat Building Singapore 048617
Tel: +65 6329 6408 Fax: +65 6329 9699
Email :
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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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