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ASEAN STOCK WATCH 10  August  2010

New Highs In ASEAN Markets

Shayne Heffernan

Expect some good gains today in ASEAN as the US Federal Reserve is expected to offer additional economic stimulus to a struggling US economy.

That combined with strong ASEAN growth expectations should see ASEAN market set new records this week.

The Philippine stock market resumed its rally today after investors continue to buy selected stocks but some analysts are unimpressed saying that the local market is already “losing steam.”

The bellwether Philippine Stock Exchange index gained 0.24 percent or 8.44 points to 3,524.70, while the broader all-share index rose by 0.19 percent or 4.24 points to 2,234.19.

Trading volume thinned to just 787 million shares worth P3.03 billion ($67.48 million) with the property sector bucking the overall buying spree. Advancers beat decliners 73 to 43 while 49 stocks did not move.

AB Capital Securities, Inc. said the Philippine market managed to eke out a small gain amidst profit taking the global bourse. The rally was mostly caused by Lopez-related stocks which have been battered recently.

These include ABS-CBN Broadcasting Corp., one of the biggest broadcasting firms in the Philippines, and power generation firm Energy Development Corp. (EDC).

AB Capital attributed the ABS-CBN’s 7.9 percent rally to the company’s share buyback program. Stock price of EDC rose by 2.07 percent on a technical rebound.

“Investors are possibly hanging on to a ‘prospectively’ good week. The market has kept its positive bias although the (lower volume) suggests that investors’ continue to be cautious,” Justino Calaycay of Accord Capital Equities Corp. said.

The Philippine market has again bucked the performance of the global equities which were trading lower as of late this afternoon over concerns that a slackened US recovery will impact on demand from its products and services.

There is however no reason for the local investors to celebrate since today’s performance show that the local index’s momentum is slowly losing steam and the urge to take profits after this long winning streak is getting stronger, AB Capital Securities said.

“Market moving news may become scarcer now as we are already past the mid point of the second quarter earnings reporting season. Moreover, Tuesday is the start of the so-called ‘Ghost Month’, which is typically a dull period for stocks,” AB Capital Securities said.

The composite index for instance went up by as much as 3,531.59 points today – 15 points higher – before giving up some of its gains. This indicates that investors are starting to lock-in their gains.

Over the last 52 weeks, the Philippine equities have, on average, returned nearly twice as much as the widely-tracked and influential Dow Jones Industrial Average, Calaycay noted. The Philippine market was already up by 24.17 percent while Dow Jones’ was up only by 18.06 percent.

As expected, stocks in the 30-company index closed mixed. Among those that were sold down are heavyweight Philippine Long Distance Telephone Co. and Ayala Land, Inc. Property firm Megaworld Corp. and Hong Kong-unit Metro Pacific Investments Corp. finished higher.

The Stock Exchange of Thailand (SET)composite index moved up 0.11 point, or 0.01 percent, to close at 875.18 points on Monday.

Some 11.13 billion shares worth 32.05 billion baht (about 1.001 billion U.S. dollars) changed hands.

The Commerce Ministry has raised this year’s export growth projection to at least 20 per cent, or over US$183 billion.

“The ministry is confident that exports will grow at least 20 per cent this year, thanks to the global economic recovery,” Commerce Minister Porntiva Nakasai said on Monday.

The previous projection was 19 per cent.

Foreign countries had also increased their export forecasts. The United States had raised its export growth target from 12 per cent to 20 per cent, China from 30 per cent to 50 per cent and Asean countries from 27.3 per cent to 30 per cent.

She said the Thai export sector in the second half of 2010 will focus on the Asian market, including Asean countries, China, Japan and India, followed by other regions with high economic development potential.

Top five most active values were as follows;

TRUE closed at 5.90 baht, down by 0.65 baht or 9.92 per cent.

BTS closed at 0.91 baht, up by 0.01 baht or 1.11 per cent.

CPF closed at 25.25 baht, up by 0.25 baht or 1.00 per cent.

TCAP closed at 31.00 baht, up by 1.25 baht or 4.20 per cent.

ITD closed at 3.16 baht, up by 0.18 baht or 6.04 per cent.

The Malaysia stock market ended mixed on Monday. The Kuala Lumpur Composite Index (KLCI) was at 1,360.66 up 0.21 of a point or 0.02 percent, and the Emas was at 9,223.83 down 0.81 of a point or 0.01 percent.

Turnover decreased to 699.32 million shares valued at 1.07 billion ringgit Malaysia (340.28 million U.S. dollars), compared with 866.08 million shares valued at 1.26 million ringgit Malaysia (400.13 million U.S. dollars) on last Friday.

Mudajaya was the top gainer for the day. It closed at RM4.50, rose 50 sen.

For the heavyweights, Axiata dropped 3 sen to RM4.30; Maxis urged 1 sen to RM5.30; IOI rose 2 sen to RM5.14; SIME climbed 9 sen to RM7.61 while Maybank was up 1 sen to RM7.72

SIG Gases Bhd, which made its debut on the Bursa Malaysia Main Market today, opened at 60 sen, registered a 2 sen premium over its 58 sen offer price.

The stock rose as high as 65 sen in the morning trade. It is also the most active stock during the morning trade.

The company manufactures liquid oxygen, liquid nitrogen and fuming gas.

It also refills and distributes oxygen, carbon dioxide, nitrogen, argon, dissolved acetylene, special gases, gas mixture and refrigerant products, among others.

Its listing exercise involved a public issue of 49.2 million new ordinary shares, and an offer-for-sale of 3 million shares at 58 sen each. This exercise would raise RM28.54mil.

The Jakarta Composite Index rose 22.01 points, or 0.7 percent, to close at 3,082.60. About 2.9 billion shares worth Rp 2.98 trillion ($334 million) changed hands. Gainers outnumbered decliners 112 to 70.

The most active stock by value was Telekomunikasi Indonesia, the country’s biggest telecom, which rose 1.2 percent to Rp 8,500.

Indofood Sukses Makmur, the second-most active, advanced 1.2 percent to Rp 4,200 after being rated “underperform” on Friday by Malaysian banking group CIMB.

Shares of department store operator Mitra Adiperkasa soared 8 percent to Rp 810 after the company forecast that revenue would rise 15-20 percent this year.

Palm oil stocks gained as the commodity hit a 15-month high. PT Astra Agro Lestari, the nation’s biggest listed plantation company by market value, rose 1.2 percent to Rp 21,450.

Palm oil futures gained 2.2 percent to 2,719 ringgit ($865) a metric ton in Kuala Lumpur on Monday.

Capital markets analyst Krisna Dwi Setiawan from Valbury Asia Securities said the index had the momentum to reach another milestone by breaking 3,100 and set a fresh record high in the process.

Krisna said that with support from rising commodity prices, including nickel and gold, as well as strong appetite from foreign investors, the JCI could certainly reach the level and had the potential to outperform all other regional indexes.

Meanwhile, the rupiah’s rise was curtailed by speculation that the central bank was in the market to counter appreciation that could hurt exports.

The rupiah rose 0.1 percent to 8,933 per dollar as of 3:40 p.m. in Jakarta, after climbing to 8,923 earlier in the day, according to Bloomberg.

The currency has gained 5.1 percent this year and reached 8,905 on Aug. 3, its strongest level since June 2007.

“There is room for the rupiah to strengthen, but Bank Indonesia is guarding to limit gains,” said Muhammad Fauzi Halim, a foreign-exchange trader at Bank Resona Perdania in Jakarta.

“There is a lot of appetite for the currency as Indonesia’s economic fundamentals are strong. Bank Indonesia is comfortable with the rupiah trading at between 8,900 and 9,000.”

Hartadi Sarwono, a deputy governor of the central bank, said last month that the monetary authority would seek to limit excessive appreciation in the rupiah, which is Asia’s second-best performing currency outside Japan this year.

Central banks intervene in currency markets by arranging purchases or sales of foreign exchange.

Indonesia’s exports rose 34.9 percent in June after gaining 37.4 percent a month earlier, according to government data released last week.

A stronger rupiah would make Indonesian goods more expensive abroad.


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