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ASEAN STOCK WATCH Asean Affairs  10 August 2012

ASEAN Market Preview, Singapore, Thailand, Malaysia, Indonesia, Philippines

By Shayne Heffernan Ph.D.

While the S&P 500 has chalked up three-month highs every day this week, the index has climbed only 0.6 percent over the past three sessions - an indication that investors aren't prepared to make aggressive bets despite better-than-expected jobless claims and U.S. trade data.

The three major U.S. stock indexes seesawed throughout the morning, with the S&P 500 mostly hovering above 1,400 in light trade as investors bet central banks would soon act to support a global recovery that has shown signs of stalling.

The Dow Jones industrial average slipped 10.45 points, or 0.08 percent, to 13,165.19 at the close. But the Standard & Poor's 500 Index inched up 0.58 of a point, or 0.04 percent, to 1,402.80. The Nasdaq Composite Index gained 7.39 points, or 0.25 percent, to close at 3,018.64.

Markets held on despite a raft of weak Chinese economic data. Annual growth in factory output slowed to its lowest in more than three years in July while annual consumer price inflation hit a 30-month low.


The FBM KLCI index gained 6.60 points or 0.40% on Thursday. The Finance Index increased 0.47% to 14759.91 points, the Properties Index up 0.44% to 1064.6 points and the Plantation Index rose 0.31% to 8705.09 points. The market traded within a range of 6.93 points between an intra-day high of 1642.52 and a low of 1635.59 during the session.

Actively traded stocks include GPRO, ASUPREM, PERMAJU, NICORP, BIOSIS-WA, MBFHLDG-WA, GENTING, AXIATA, YTL and IHH. Trading volume decreased to 884.65 mil shares worth RM1347.85 mil as compared to Wednesday’s 1231.58 mil shares worth RM1755.55 mil.

Leading Movers were MAYBANK (+8 sen to RM8.95), GENTING (+15 sen to RM9.02), CIMB (+6 sen to RM7.91), GENM (+10 sen to RM3.38) and YTL (+4 sen to RM1.87). Lagging Movers were TENAGA (-3 sen to RM6.94), DIGI (-2 sen to RM4.67), IOICORP (-2 sen to RM5.15), AXIATA (-1 sen to RM5.98) and AIRASIA (-2 sen to RM3.68). Market breadth was negative with 332 gainers as compared to 379 losers.


Singapore Prime Minister Lee Hsien Loong said Wednesday that the domestic economy is likely to grow between 1.5% and 2.5% this year, and that it is showing resilience despite "serious problems" in the U.S. and Europe.

"Asia is doing better than other regions but China and India are slowing down and tensions are simmering in the South China Sea. Against this backdrop, Singapore is doing quite well," Mr. Lee said in his annual National Day rally speech.

For the first half of 2012, the economy grew 1.7%, he said.

Mr. Lee's comments come ahead of second-quarter gross domestic product data slated to be released Friday. According to preliminary estimates in July, the economy contracted by 1.1% in the second quarter, on a seasonally adjusted basis, as economic turmoil in Europe and weak growth in the U.S. weighed on the island nation's exports.

The full-year growth estimate given by Mr. Lee narrows the range of a previous government forecast of 1% to 3%, reflecting more modest expectations for growth as the global economy cools.


Thailand's economy is expected to grow 3.2 per cent in the third quarter of 2012 from a year earlier and 9.7 per cent in the second half, reflecting its recovery from devastating floods last year, the central bank said on Friday.

It also estimated growth of 3.5 per cent in the April-June period from a year before, Bank of Thailand Assistant Governor Paiboon Kittisrikangwan told a briefing.

The economy was expected to grow 16.7 per cent in the fourth quarter from a year before. The floods in 2011 overwhelmed huge industrial estates from October, forcing hundreds of factories to close.

Last week the central bank cut its 2012 economic growth projection to 5.7 per cent from 6 per cent and its export growth prediction to 7 per cent from 8 per cent.


The latest policy swings affect sentiment and perceptions of the overall policy environment in the near term, the bank said. That, in turn, will hurt investment, a major factor that has helped Indonesia’s growth momentum amid the global economic slowdown.

Indonesia reported on Monday that its economy, the largest in Southeast Asia, grew 6.4 percent year-on-year in the second quarter, accelerating from 6.3 percent growth in the first quarter. Investments contributed to 32.9 percent of gross domestic product in the second quarter, the biggest share since the 1997 Asian financial crisis. Foreign direct investment in particular increased 30 percent.

Because of Indonesia’s faster economic expansion, the Japanese investment bank in a separate report raised its 2012 growth forecast to 6.1 percent from 5.8 percent.

Still, Nomura warned that the trend for faster growth would not last, referring to Indonesia’s own experience in the aftermath of the collapse of the US investment bank Lehman Brothers Holdings in 2008, which deepened the global financial crisis.

At that time large amounts of foreign capital were withdrawn from the country, and investors did not find Indonesia’s policies very convincing as a major political debate ensued in the House of Representatives on the process of bailing out the country’s banks.

“It is dangerous to have a negative foreign perception, particularly given the current external backdrop; there are risks of a sharp deterioration in the capital account while the current account is already running deficits,” Nomura said.

The nation’s balance of payment deficit — which means outbound expense for goods, services and capital is more than inbound income — is likely to widen as a result, after narrowing to $1 billion in the first quarter from $3.7 billion in the fourth quarter last year, Nomura’s economists said.

That projection was based on a deterioration of Indonesia’s goods trade, which has been in deficit for three straight months through June. The investment bank revised down its forecast on Indonesia’s economic growth for the 2014-2019 period — to 6.5 percent annually from 7.0 percent.


The main-share Philippine Stock Exchange index fell by 52.06 points, or 0.98 percent, to close at 5,256.61. All counters ended in the red weighed down most by mining/oil (-3.02 percent) and property (-2.57 percent) while the financial and services counters both rose by over 1 percent.

There were 44 advancers, which were overwhelmed by 122 decliners, while 38 stocks were unchanged. Value turnover amounted to P5.22 billion. Dealers said the market was starting to digest the impact of the recent floods.

In terms of specific stocks, the market was weighed down most by AC (-1.7 percent), ALI (-5 percent), PLDT (-1.09 percent), Metrobank (-1.27 percent), Philex (-3.25 percent) and Globe (-1.5 percent).

The index losses were tempered by the modest gains of AP, DMCI and RLC. ABSCBN-PDRs were up by 3 percent.

Yesterday in Asia

Hong Kong climbed 1.02 percent, or 203.95 points, to 20,269.47 while Shanghai added 0.61 percent, or 13.11 points, to 2,174.10.

Tokyo climbed 1.10 percent, or 97.44 points, to 8,978.60 and Seoul gained 1.96 percent, or 37.36 points, to 1,940.59 but Sydney eased 0.10 percent, or 4.3 points, to 4,308.3.

China said Thursday that its consumer price index rose 1.8 percent year on year in July, in line with forecasts but down from 2.2 percent in June and its slowest pace since January 2010.

– Taipei rose 1.56 percent, or 113.9 points, to 7,433.70.

Smartphone maker HTC rose 3.81 percent to Tw$245.0 while TSMC was 2.24 percent higher at Tw$82.3.

– Manila eased 0.98 percent, or 52.06 points, to 5,256.61.

Ayala Corp. slipped 1.71 percent to 425 pesos while its real estate flagship, Ayala Land dropped 5.03 percent to 22.65 pesos.

– Wellington ended flat, edging up 1.82 points to 3,583.61.

Telecom gained 0.2 percent to NZ$2.665, Fletcher Building rose 0.8 percent to NZ$6.48 and Contact Energy was off 4.0 percent at NZ$4.80.

– Jakarta rose 0.99 percent, or 40.46 points, to 4,131.17.

Telkom rose 1.7 percent to 9,200 rupiah, cigarette maker Gudang Garam gained 1.2 percent to 51,250 rupiah, while Aneka Tambang fell 0.80 percent to 1,240 rupiah.

– Kuala Lumpur stocks rose 0.40 percent, or 6.60 points, to close at 1,642.52.
Financial firm CIMB Group Holdings rose 0.76 percent to 7.91 ringgit, while Malayan Banking gained 0.90 percent to 8.95. Utility Tenaga Nasional lost 0.43 percent to 6.94 ringgit.

– Bangkok rose 0.29 percent, or 3.57 points, to 1,217.70.

Banpu dropped 0.44 percent to 454 baht while Thai Oil Public Co. rose 3.02 percent to 68.25 baht.

– Mumbai fell 0.23 percent, or 39.69 points, to 17,560.87.

Top mobile phone firm Bharti Airtel slid 6.4 percent to 256.85 rupees.

– Singapore was closed for a public holiday.

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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