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ASEAN STOCK WATCH Asean Affairs   17 April 2012

ASEAN is looking to lead world market

By Shayne Heffernan Ph.D.

ASEAN is looking to lead world markets today as the overnight trading session in the USA was fairly mixed.

Thailand will reopen after a long holiday and will most certainly open lower as may markets in Jakarta, Singapore, Kuala Lumpur and Manila.

There is some chance of a rally in the afternoon session but with Earnings Season in the USA just underway and the trouble in Europe it is best to stay on the sidelines.

Any positive news from China on growth will lift ASEAN, and perhaps the world.

Singapore Dollar set to strengthen in the months ahead

As the Monetary Authority of Singapore surprised financial market last Friday saying that it will tighten monetary policy slightly because of persistent inflationary pressures, analysts forecast the currency of the city- state will appreciate further going forward.

The decision of Singapore’s central bank to let the local Dollar rise at a slightly faster pace, albeit within a narrower policy band, pushed the Singapore Dollar higher against the “Greenback.”

It managed to break and hold below 1.250, which was the crucial support mark before the announcement of the decision, to its US counterpart Friday.

Singapore Stock Exchange will see a flurry of New IPO’s after the success of Bumitama Agri.

Bumitama Agri Resources was 31 times over subscribed and has held on to most of the 1st day gains.

M&L REIT is expected to be next, Ferrari and Manchester United will revive plans and Ex Carl Icahn Oil Expert Alan Gaines wants to bring State Oil to Singapore.

M&L REIT The owner of Ibis on Bencoolen, Ibis Novena, Four Points by Sheraton, Swissotel Sydney, Travelodge Docklands and Hilton Nagoya is set to IPO in Singapore on May 3 2012.

Singapore-based trust, which will manage a portfolio of hotels, has set an indicative price range of S$0.80 to S$0.87 per unit, and is likely to start road shows for the offering today, the sources said. Its market capitalisation could range from S$784 million and S$842 million, they said.

Singapore’s Kum family has revived plans to raise as much as S$463 million through an initial public offering of its M&L Real Estate Investment Trust (REIT) here, people with knowledge of the deal said.

Fiat is considering listing Ferrari in Hong Kong.

The IPO could help relieve Fiat’s five billion euro debt and boost valuation of the Italian giant.

Heffernan Capital Management have Estimated Ferrari could value over $7 billion if floated.

Italian fashion house Prada (HKG:1913) raised HK$21.3 billion from its IPO in June – marking the second- largest fundraising on the Hong Kong exchange this year.

Manchester United
Manchester United also has IPO plans for Singapore.

The owners of British football club Manchester United have reactivated an earlier plan to float its shares on the stock market in Singapore following improved market conditions, the UK’s Sunday Times reported.

The Florida-based Glazer family is looking to raise up to 600 million pounds (S$1.19 billion) by selling 25 to 30 per cent of the club via an initial public offering that would value it at up to 2 billion pounds, the newspaper said.

A spokesman for Manchester United said, ‘We don’t comment on this sort of speculation’. Manchester United had eyed a US$1 billion (S$1.25 billion) flotation in Singapore last year but shelved it due to market volatility, a source close to the IPO told Reuters in September.

State Oil
Alan D. Gaines’ State Oil is considering taking the company to market in Singapore.

A.D. Gaines, speaking on behalf of the management of State Oil, addressing our stockholders by outlining the Company’s strategy which, we believe will create significant value for our shareholders.

“I believe that the present landscape regarding the acquisition of oil and gas properties is quite compelling, and, at the same time, challenging. As stewards of this company, your management and Board of Directors will endeavor to identify the most attractive opportunities, while adhering to strict internal transaction and risk management parameters, while maintaining high regard for both engineering and capital structure. We will insure that incremental economics, with respect to the drillbit, generate high rates of return. In doing so, State Oil expects to benefit from your management and Board of Director’s excellent proprietary deal flow, extensive industry contacts, and relationships within the energy financial and investment banking community.

Overnight on Wall St
The S&P 500 decreased 0.1 percent to 1,369.57. The Dow Jones Industrial Average gained 71.82 points, or 0.6 percent, to 12,921.41. The Nasdaq Composite Index (CCMP), which has advanced 15 percent in 2012, retreated 0.8 percent to 2,988.40 today.

Citigroup Inc. (C) climbed 1.8 percent after fixed-income trading revenue more than doubled. Procter & Gamble Co. (PG) gained 1.5 percent as the world’s largest consumer-products company lifted its quarterly dividend. Apple Inc. (AAPL) slumped 4.2 percent, the most since October, on concern mobile-phone carriers may cut subsidies for the iPhone. Mattel Inc. (MAT), the largest toymaker, dropped 9.1 percent as sales trailed analysts’ estimates.

In Asia Yesterday
As we predicted Asian markets fell Monday as Spain’s debt troubles added to already downbeat sentiment caused by weak Chinese growth data and fading optimism over the US economy.
The euro slipped further as investors became more risk-averse, while the yuan sank against the dollar on the first trading day since Beijing widened the trading band for the Chinese currency.

Tokyo fell 1.74 percent, or 167.35 points, to 9,470.64 and Seoul shed 0.81 percent, or 16.28 points, to 1,992.63 while Sydney ended 0.49 percent, or 21.0 points, off at 4,302.3.

Hong Kong closed 0.44 percent, or 90.40 points, lower at 20,610.64 while Shanghai ended flat, edging down 2.13 points to 2,357.03.
In other markets:

– Singapore climbed 0.14 percent, or 4.30 points, to 2,992.12.

Oil rig maker Keppel Corp gained 1.22 percent to Sg$11.60 while commodities firm Olam International was down 0.43 percent at Sg$2.31.

– Taipei fell 0.75 percent, or 58.41 points, to 7,729.86.

Leading smartphone maker HTC lost 2.82 percent to end at Tw$517.0 while Formosa Plastics was 2.20 percent lower at Tw$84.5.

– Wellington closed 0.39 percent, or 13.67 points, lower at 3,473.50.

Fletcher Building rose 0.2 percent to NZ$6.21 and Contact Energy was down 0.6 percent at NZ$4.75.

– Manila gained 0.40 percent, or 20.16 points, to 5,117.46.

Philippine Long Distance Telephone fell 1.1 percent to 2,574 pesos and San Miguel was off 0.35 percent at 113.50 pesos.

– Jakarta fell 0.31 percent, or 12.70 points, to 4,146.58.

Bank Mandiri lost 0.7 percent to end at 6,950 rupiah, gold and nickel miner Aneka Tambang slipped 2.3 percent to 1,710 rupiah, and instant noodle maker Indofood Sukses Makmur was down 1.6 percent at 4,675 rupiah.

– Kuala Lumpur slipped 0.35 percent, or 5.61 points, to 1,597.51.

Plantation firm Sime Darby fell 0.10 percent to 9.88 ringgit, while telecoms company Axiata Group shed 0.19 percent to 5.39 ringgit. Financial firm Public Bank gained 0.29 percent to 13.78 ringgit.

– Mumbai rose 0.33 percent, or 56.44 points, to 17,150.95.

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 :
Suite 53 Athenee Tower
63 Wireless Road, Lumpini, Pathumwan, Bangkok 10330
New York 347 5th Avenue, Suite 1402-508 NY, NY 10016


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