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ASEAN STOCK WATCH 11  August  2010

ASEAN Markets Setting the Pace for the World

Shayne Heffernan

The Indonesia Stock Exchange celebrated today having posted the highest first half growth among the ASEAN indexes, ASEAN markets are all growing fast so it was a day worth celebrating in Jakarta.

On the 33rd anniversary of the bourse Director Ito Warsito said the IDX grew 19.7 percent during the first half from 2,575 on january 4th 3,082 on August 9th. Thailand stock exchange is 19.5 percent higher, the philippines expanded 17.3 percent, while Malaysia climbed 6.7 percent.

Considering the rest of the world they are amazing numbers, and the story is far fom over.

Further Ito claimed that the IDX saw the largest gain in market value which is 30.3 percent, from US$219 on January 4th to US$285.54 on August 9th.

Thailand stock exchange improved 25 percent followed by the philippines 22.7 percent, while the Shanghai stok exchange posted a negative first half result.

Fourty eight listings were made as of August 9th with total right issue at Rp47.5 trillion. The Stock Market and Financial Institution Supervisory Body (Bapepam-LK) hoped that rights issue could reach Rp100 trillion by the end of the year,

Bonds auctions contributed the largest portion of around Rp20.44 trillion followed by right issue Rp20.12 trillion, initial public offering Rp6,24 trillion and corporate islamic bonds Rp700 billion.

Average transaction however is still behind target with average daily value of Rp4.17 trillion over 0.3 percent behind Rp4.5 trillion target.

Philippine stocks ended little changed on Tuesday as regional markets traded mixed ahead of the US Federal Reserve’s policy meeting.

The Fed’s rate-setting panel will meet later Tuesday and while it is expected to keep rates on hold, there is speculation it may return to crisis-era stimulus measures after poor US jobs data.

Paring down early gains, the benchmark Philippine Stock Exchange index ended up only 1.06 points or 0.03% at 3,525.81.

The broader all-share index rose 2.90 points or 0.1% to 2,237.16.

Gainers outnumbered losers, 70 to 57, while 40 issues were unchanged.

A total of 1.75 billion shares worth P4.43 billion were traded.

Philippine Long Distance Telephone Co. was the most actively traded stock by value as it added 0.1% to 2,446.

Second most active was Megaworld Corp., which went up 1.1% to P1.78 on net foreign buying.

Meanwhile, Megaworld’s parent firm, Alliance Global Inc., hit a 38-month high of P6.61 before closing higher by 2.7% at P6.52. Alliance Global is expected to report higher earnings on Friday next week.

ABS-CBN Corp. and Lopez Holdings Inc. also rose to fresh highs today.

ABS-CBN shot up by 7.4% to a 10-year high of P52.50 after it announced that its first half net income grew by almost fourfold to P2.26 billion. The gains boosted interest in its parent, Lopez Holdings, which jumped 4.2% to a 31-month high of P4.20.


The STI comprises the top 30 blue-chip companies on the SGX Mainboard ranked by market capitalisation and which have passed the selection criteria outlined below.

• Free Float. The free float of a listed company must be greater than 15%. The definition of “free float” includes portfolio investments, nominee holdings and holdings by investment companies.

• Liquidity. A stock must trade with a median daily turnover value of at least 0.05% of the value of its free float-adjusted shares in issue for at least 10 out of the last 12 months.

The constituents of the STI are reviewed semi-annually in accordance with a set of publicly available Ground Rules which can be found here.

An advisory committee comprising of market practitioners, and/or representatives from SPH, SGX and FTSE undertakes the reviews.


Retail investors can take a position on where they believe the broad market is trending through 3 types of financial instruments that are constructed on the STI – STI Futures, STI Structured Warrants and STI Exchange Traded Funds.

United Overseas Bank Ltd., Singapore’s second-largest lender by market value, reported a 28 percent increase in quarterly profit as declining bad-loan charges offset a slump in client trading and share sales.

Net income jumped to S$602 million ($444.7 million) in the three months ended June 30 from S$470 million a year earlier as non-interest income plunged 31 percent, the Singapore-based company said in a statement today.

Swings in stock and bond markets, and signs of economic headwinds in the U.S., Europe and China have deterred clients from trading and making share sales, trimming earnings’ gains. Singapore’s three-month interbank lending rate, or Sibor, has averaged 0.6 percent this year, hampering net interest margins.

“The numbers demonstrate the revenue challenges for the bank,” said Sanjay Jain, a Singapore-based analyst at Credit Suisse Group AG. “I’m hoping the margin decline will not be severe in the second half.”

United Overseas fell 1.1 percent to S$19.30 at the close of trade in Singapore. The shares have dropped 2 percent this year, compared with a 3 percent increase in the benchmark Straits Times Index.

Olam Issues $337m 10-Year Senior Unsecured Bonds

Olam International (Olam) has issued US$250m ($337m) in unsecured bonds, the leading global, integrated supply chain manager of agricultural products and food ingredients said in a statement on the Singapore Exchange. The Bonds have a maturity of 10 years, which provide Olam with long term financing, enabling it to further term out its debt maturity profile. The Bonds were priced at par and bear a coupon of 7.5% in line with the pricing guidance. According to Olam, this is the first unrated offering of US-dollar denominated bonds by a Singapore issuer in the international bond market. Olam said it will use the net proceeds of the bond issue for capital expenditure and the financing of potential acquisitions. In the meantime, the bond issue was oversubscribed by more than 80 investors, with 79% from Asia and 21% from Europe. In terms of investor classes, 46% of the allocation was to private banks, 33% to fund managers, 19% to other banks and 2% to others.

Ntegrator Secures 4 Contracts Worth $15.5m

Ntegrator International (Ntegrator), a leading regional communications network specialist and systems integrator, has secured another four contracts worth $15.5m. The deals expand on existing projects with repeat customers including Vietnam’s second largest telco operator, Viettel Corporation; Myanmar’s state-run telco, Myanmar Posts and Telecommunications; a cable TV provider in Myanmar, Forever Group Company Limited; and a subsidiary of Singapore Power, SP Powerassets. The majority of the project work scope is expected to be completed within this financial year. Meanwhile, Ntegrator just reported a 76.5% decrease in its 1H10 earnings in tandem with a 59.8% drop in revenue, largely due to the delay of a major project in Thailand as a result of the recent political unrest in Thailand during 2Q10. Also, due to circumstances beyond the company’s control, formal finalization of some contracts that were scheduled to be signed at the end of the first quarter and delivered by the second quarter of this year were delayed.

Cerebos Chooses Telstra To Manage Network

Mainboard-listed Cerebos Pacific (Cerebos), a leading food and health supplements company, has outsourced the management of its network infrastructure to Australian giant Telstra International, a division of Australian giant Telstra Corp. Under the deal, Telstra will manage 11 of Cerebos’ sites spread across the Asia-Pacific region where Cerebos has operations, these include a disaster recovery site in Singapore, and operational sites in the Philippines, Thailand, Australia, Malaysia, Taiwan, Hong Kong, Shanghai and Indonesia. ‘This is an outsourced solution, where part of our overall wide area network infrastructure management is now handled by Telstra International,’ said Cerebos Group’s vice-president of information systems, Liew Chee Yin. Neither party would reveal the size of the contract, but Cerebos said the deal would help the company save about US$300,000 per annum in IT operations. Meanwhile, Telstra International has replaced one of the biggest network players in Singapore by winning this contract.

The Stock Exchange of Thailand (SET) composite index went down 13.23 points or 1.51% to close at 861.95 points at the end of trading session on Tuesday Afternoon. The trade value was 33.36 billion baht.

Top five most active values were as follows;

TRUE closed at 6.25 baht, up 0.35 baht (5.93%)

CPF closed at 24.90 baht, down 0.35 baht (1.39%)

BTS closed at 0.88 baht, down 0.03 baht (3.30%)

LOXLEY closed at 2.82 baht, up 0.24 baht (9.30%)

PDI closed at 23.70 baht, down 0.40 baht (1.66%)

True Corp. PCL, a Thai telecommunication conglomerate, Tuesday denied rumors of a new share issuance.

Local media earlier reported the company will issue new shares worth a total of THB10 billion ($312.7 million) to existing shareholders at THB4 per share, with one new share issued for every three existing shares held.

In a filing to the Stock Exchange of Thailand, True Corp. said the report was not correct.

Shares of True Corp., which owns Thailand’s third largest mobile phone operator by subscribers, have more than doubled since July 16. Investor optimism has been buoyed by the prospect of True Corp. winning a 3G license in the government auction expected in late September.

Malaysian markets traded flat today. The top three gainers were TIMECOM that added 1 sen to 65.5 sen, MSPORTS gained 5 sen to 50 sen and Maybank climbed 1 sen to RM7.73.

For the heavyweights, MISC, Sime Darby and CIMB Group remained unchanged at RM8.78, RM7.61 and RM7.36 respectively.

Malaysia reported growth manufacturing sales that recorded a hike of 13.8% in June to RM44.8bil from 39.4bil a year ago. The Industrial Production Index also grew in June by 9.4% from a year ago.

According to HWANGDBS Vickers Research the waiting game would likely to continue pending the emergence of fresh market leads.

“As such, the benchmark FBM KLCI may remain stuck inside a narrow trading range – possibly with a slight downward bias,” it said.

The new Companies Bill, which will replace the existing Companies Act 1965, aims to ease and cheapen the cost of doing business in Malaysia, but will give strong emphasis on corporate governance.

The Companies Commission of Malaysia (CCM) has targeted to further reduce the number of days for setting up a business from three days to one. Hence, going e-centric will be a huge feature for the formation of companies.

Other significant features include having a flat and cheaper fee for public and private companies to be formed as well as including corporate social responsibility into the act.

The Jakarta Composite Index fell 25.44 points, or 0.8 percent, to close at 3,057.16. About 3.17 billion shares worth Rp 2.97 trillion ($333 million) changed hands. Decliners led gainers 132 to 59.

Ahmad Riyadi, an analyst of Milenium Danatama Securities, said local shares were weakened as investors pulled back to take profits after the JCI cleared the 3,000-point barrier and was trading in record territory.

Regional stocks fell, dragging down the MSCI Asia Pacific Index by the most in six weeks, after China reported slower-than-expected exports, adding to concerns about tempered growth in the powerhouse affecting the broader region.

Declines in the JCI were led by the finance, telecom and commodities sectors. Bank Central Asia, the nation’s largest bank by market value, fell 2.4 percent to Rp 6,000, while Telekomunikasi Indonesia (Telkom) declined 1.2 percent to close at Rp 8,400.

Palm oil stocks also dropped after futures retreated from a 15-month high, falling 1.7 percent to 2,683 ringgit ($851) per ton in Kuala Lumpur.

Perusahaan Perkebunan London Sumatra Indonesia, the nation’s second-biggest plantation stock by market value, fell 2.6 percent to Rp 9,450, while Gozco Plantations dropped 3.8 percent to Rp 380.

Automotive stocks saw mixed results, with Astra International, the nation’s largest car dealer, falling 2.7 percent to Rp 47,500. No. 2 auto retailer Indomobil Sukses Internasional soared 25 percent to Rp 1,250 after reporting first-half net income more than doubled from a year earlier.

The rupiah fell 0.3 percent to 8,958 per dollar, the biggest decline since June 29, after the rally that last week drove the currency to a three-year high was judged excessive by traders.

Ho Woei Chen, an economist at United Overseas Bank Ltd. in Singapore, said the central bank had also been stepping in to curb the currency’s appreciation.

“Asian currencies have been quite strong in the past two weeks and there are concerns that the gains are a bit overdone,” Ho said. “Bank Indonesia has also been intervening to buy dollars, although its actions are not that strong.”

Finance Minister Agus Martowardojo said on Monday that recent gains in the rupiah would prove temporary and this year’s average exchange rate would probably be in excess of 9,000.


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