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||Asean Affairs 2 April 2013
ASEAN Market Preview
Asian markets mostly slipped in holiday-hit trade Monday as investors were unimpressed by a slight improvement in key economic indicators out of China and Tokyo.
The yen climbed against the dollar and euro ahead of a Bank of Japan (BoJ) policy meeting this week, while there are lingering concerns about political uncertainty in Italy as well as debt-ravaged Cyprus.
Tokyo slipped 2.12 percent, or 262.89 points, to 12,135.02 on the back of the stronger yen. Taipei fell 0.24 percent, or 19.37 points, to 7,899.24 and Seoul lost 0.44 percent, or 8.90 points, to 1,995.99.
Jakarta shed 3.14 points to close .07 percent down at 4,937.58 points as shares in finance and infrastructure companies tumbled. Some 5.4 billion shares valued at Rp 4.7 trillion changed hands in a moderate day of trading. The government yield on the 10-year note dropped to 5.584 percent from 5.598 percent. Advancers beat decliners 153 to 124.
In the afternoon Shanghai was flat.
Sydney, Hong Kong and Wellington were closed for the Easter break.
The peso fell on the first trading day after the Lenten break as the euphoria over the Philippines’ attainment of an investment grade eased.
The local currency closed at its intraday low of 40.84 against the US dollar on Monday, down by 4 centavos from the finish of 40.80:$1 on March 27.
Intraday high hit 40.75:$1. Volume of trade reached $530.4 million from $1.14 billion previously.
Traders said the volume of trade eased and demand for the peso tempered as the foreign exchange market felt downbeat following the Lenten break.
Last Wednesday, the last trading day before the break, the market was lifted by the announcement that Fitch Ratings gave the Philippines its first investment grade from a major international ratings firm.
Traders said fund owners would look for fresh leads in the coming days to guide their investment decisions.
The Stock Exchange of Thailand main index went down 11.51 points, or 0.74%, to close at 1,549.55 points at the end of trading session this afternoon. The trade value was 43.85 billion baht, with 9.37 billion shares traded.
The SET50 index ended at 1,017.35 points, down 7.57 points, or0.74%, with a total trade value of 15.97 billion baht.
The SET100 index fell 19.01 points, or 0.83%, to stand at 2,280.38 points, with a total turnover of 22.64 billion baht.
The SETHD index went down 9.42 points, or 0.74%, to stand at 1,257.36 points, with total trade value of 6.76 billion baht.
The MAI index dropped 1.60 points, or 0.33%, to close at 482.68 points, with total transaction value of 2.98 billion baht.
Top five most active values were as follows;
SOLAR stood at 8.95 baht, up 0.05 baht (0.56%)
TIPCO stood at 16.10 baht, up 1.80 baht (12.59%)
SUSCO stood at 6.85 baht, up 0.40 baht (6.20%)
INTUCH stood at 80.50 baht, down 0.50 baht (0.62%)
BTS stood at 9.30 baht, down 0.10 baht (1.06%)
The KLCI closed 4.02 points or 0.24% to 1,667.61. Turnover was 594.22 million shares valued at RM1.17bil.
However, the broader market improved, with gainers leading losers 328 to 316, with 291 counters unchanged.
An analyst with a local bank-backed brokerage noted the KLCI was dragged down by profit-taking activities, which was in line with the less than stellar performance of regional bourses.
"Investor sentiment is to remain cautious for the time being. We expect confidence to pick up after the elections when things are a bit more clearer," he said.
KLCI was weighed down by losses in BAT, which fell RM1.46 to RM60.70, erasing 0.75 of a point off the KLCI, while Nestle shed 20 sen to RM60.48.
Crude palm oil (CPO) for third-month delivery fell RM42 to RM2,336. IOI Corp shed four sen to RM4.64.
Banks were mixed. Maybank fell five sen to RM9.30. HLFG gained six sen to RM15 while HL Bank rose eight sen to RM14.54, but off their early lows as investors were quick to pick up the stocks.
RHB Cap rose five sen to RM8.50 and Public Bank was up four sen to RM16.30.
Genting Bhd slipped 12 sen to RM9.90. Petronas Dagangan fell 28 sen to RM22.82 and Petronas Gas 20 sen lower at RM18.80.
Singapore shares closed 0.02 percent lower on Monday, as most markets in Asia, the U.S. and Europe were shut on Friday and Monday for Easter.
The official manufacturing purchasing managers index for March showed China’s factory output ran at its fastest in 11 months at a reading of 50.9, below 52.0 forecasts by economists but still signaling economic recovery may be accelerating. A private HSBC final purchasing managers index survey also rose to 51.6, up from February’s 50.4.
But investors were concerned about growth in China as Beijing and Shanghai will implement strict property cooling measures as part of a central government crackdown on the overheated property market.
SIAS Research said “with today’s tone likely to remain upside biased, we could see the index testing and potentially overcoming the 3,318 points resistance level.” The research house pegged the next hurdle at 3,370 points, while immediate support at 3,300 points.
Phillip Securities Research said as long as the Straits Times Index stays above its key 3,250 points support, it is likely to challenge its 3,320 points resistance.
CIMB Research said “we are neutral on the index in the near term even though prices could continue to climb a tad more from here. Look for resistance near the 3,343 points levels.”
Singapore’s benchmark Straits Times Index fell 0.52 points to 3, 307.58 points. Trading volume was 2.77 billion shares worth 855.4 million Singapore dollars. Decliners outnumbered advancers 244 to 206, while 498 stocks did not move.
SMRT Corporation lost 2.5 percent to 1.54 Singapore dollars. The transport provider said it expects to report a net loss for the fourth quarter that ended on March 31, hurt by rising operating costs without corresponding fare adjustments. But it expects to have remained profitable for the full financial year.
Lian Beng Group shed 1.1 percent to 44 Singapore cents. Its wholly owned subsidiary Wealth Development Private Limited has purchased a freehold commercial plot for 68 million Singapore dollars.
Among top gainers, Jardne Matheson rose 2.1 percent to 66.48 U. S. dollars, while UOB became one of the top losers by falling 1.4 percent to 20.10 Singapore dollars. (1 U.S. dollar equals to 1.24 Singapore dollars)
The BoJ’s closely watched Tankan survey of large Japanese manufacturers for the past three months showed a slight improvement in optimism for the world’s number three economy, the first uptick in three quarters.
The survey showed sentiment at minus 8 between January and March, up from minus 12 three months earlier. The figures represent the percentage of firms saying business conditions are good minus those saying they are bad.
However, the figures were unable to prevent a sell-off in shares and a jump in the yen.
Hideki Matsumura, senior economist at Japan Research Institute, told Dow Jones Newswires: “Sentiment is getting better broadly, but the improvement isn’t as strong as expected.”
And Tachibana Securities market analyst Kenichi Hirano said the negative reaction “may have resulted from the perception that with the Nikkei having performed so well (gaining 19 percent so far in 2012), general business sentiment should have been at least a little better”.
The dollar slipped to 93.85 yen early in Asia, against 94.20 yen in New York trade on Friday, when trade was limited by the Easter holiday.
The euro bought $1.2789 and 120.05 yen compared with $1.2818 and 120.78 yen.
Australian bank Westpac said in a note to clients that investor focus was on Thursday’s BoJ announcement, the first under the stewardship of Haruhiko Kuroda. He has promised aggressive measures to kick-start the economy and end decades of deflation.
Westpac added: “Some disappointment around this meeting is likely and we have a downward bias for the dollar-yen in the week ahead.”
In China data showed manufacturing activity expanded at its fastest pace in almost a year last month, indicating the world’s number two economy was showing signs of improvement.
The official purchasing managers’ index (PMI) hit 50.9 in March, the highest since April 2012 and up from 50.1 in February. However, it was below the 51.0 that had been forecast.
A reading above 50 indicates expansion while anything below points to contraction.
Separately, British bank HSBC — whose survey focuses more on smaller enterprises — said its final PMI for March stood at 51.6 in March, up from 50.4 in February. That figure was also slightly off the 51.7 in HSBC’s preliminary PMI last week.
Shayne Heffernan Ph.D.
Economist/Hedge Fund Manager
Live Trading News
Heffernan Capital Management
Chinese Society of Economists
American Economic Society
Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
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