ASEAN KEY DESTINATIONS
Asean Stock Watch- August 12
Lurching higher in its week of whiplash, Wall Street recorded one of its biggest gains of all time Thursday after investors seized on a few signs that the economy might just be able to avoid a new recession.
The Dow Jones industrial average soared 423 points. It had already fallen 634 points Monday, risen 429 Tuesday and fallen 519 Wednesday. Never before has the Dow had four 400-point swings in a row.
The pieces of news that sent Wall Street rocketing higher were not exactly blockbusters: Cisco Systems said its profit was better than expected, the job market got a little better, and France tried to raise confidence in its shaken banking system.
But this is a week in which any move by the market — higher or lower — seems to touch off an investor stampede. So it was on Thursday, when stocks shot higher at the opening bell and never turned around.
Carlton Neel, who manages about $2 billion as a senior portfolio manager at Virtus Investment Partners, said investors are so scared of being late to a rally or a sell-off that they are trading in herds.
"Fear tends to be a much more powerful emotion, and the sell-offs tend to be more violent than the rallies," he said. "But people are worried about missing the bottom, so you will have a few melt-ups along the way."
The four days of trading this week have been the wildest for the market since the financial crisis during the fall of 2008. Each day has instantly taken a place in Wall Street history. The Dow's losses on Monday and Wednesday were its sixth- and ninth-largest by points, and its gains on Tuesday and Thursday were the 10th- and 11th-largest.
Indonesian stocks rose for a second day on Thursday as local investors purchased shares based on the view that prices were cheap relative to profit potential following the market’s recent plunge. The rupiah, meanwhile, dropped 0.06 percent against dollar to 8,530.
The Jakarta Composite Index gained 5.79 points, or 0.2 percent, to close at 3,869.37, extending Wednesday’s 3.4 percent advance. More than 7.36 billion shares valued at Rp 6.39 trillion ($748 million) were traded.
Gainers beat decliners by 125 to 104. Foreign investors, who accounted for 64 percent of trading on the Indonesia Stock Exchange, sold Rp 687 billion more in shares than they bought.
The benchmark index had fallen 11 percent in the six days to Aug. 9, putting the market into a technical correction amid concern that Europe’s debt crisis would spread and that the US economy might slip back into recession. It had closed at a record high on Aug. 1 and currently trades at around 12 times historical earnings, according to exchange data.
“Local investors are strong today,” said Betrand Raynaldi, chief researcher at eTrading Securities. “There are no changes in the fundamentals, and corporate performance hasn’t declined. In the long run the index will continue its climb.”
Long-term domestic investors are taking advantage of the low stock price through investment in products such as equity mutual funds and insurance products that are connected to financial instruments including stocks, he said.
“These investments support local buying quite strongly,” Betrand said.
Among sectors, consumer goods rose 2.8 percent, leading gains. Infrastructure increased 1.7 percent. Kalbe Farma, Indonesia’s largest pharmaceutical company, rose 3.8 percent to Rp 3,450, after Rp 150 billion expansion plans were announced on Wednesday.
Telekomunikasi Indonesia, the largest communication company, gained 3.5 percent to close at Rp 7,350. Fitch Ratings Agency affirmed the company’s rating of BB+.
Kawasan Industri Jababeka, an industrial estate developer, rose 4.6 percent to Rp 181 on reports of acquisition and investment plans.
Curbing the climb was the finance sector, which lost 1.3 percent. Bank Mandiri, Indonesia’s largest bank by assets, fell 2.7 percent to Rp 7,300, while rival Bank Rakyat Indonesia dropped 1.5 percent to Rp 6,450.
The local bourse's benchmark index closed a quarter of a percent lower at 1,476.46 in Thursday trade with selective buying of blue chip stocks arresting the losses of earlier in the day. A similar story played out in regional markets, which had tumbled in morning trade but had pared declines by midday.
Meanwhile European markets, which had opened up, continued to rally while Standard & Poor 500 futures were up.
At Bursa Malaysia, losers outpaced gainers 434 to 376 while 257 other counters were traded unchanged. There were 1.14 billion shares traded with a total turnover of RM2.29 billion.
Bank and plantation stocks featured among the lagging movers. CIMB lost 11 sen to RM8.03, Maybank dropped 8 sen to RM8.46, Public Bank was down 12 sen to RM12.82 and Hong Leong Bank was 10 sen lower at RM12.62.
IOI was 6 sen lower at RM4.62, Sime was down 2 sen to RM8.80 and KLK shed 12 sen to RM20.90. MAS gained 8 sen to RM1.80 and AirAsia lost 4 sen to RM3.50. TNB was up 6 sen to RM5.86, YTL Power rose 11 sen to RM1.96 and MMC added 5 sen to RM2.61.
Telekom was 1 sen higher at RM4.01, DiGi gained 20 sen to RM29.80 and Axiata was unchanged at RM4.90.
Spot gold, which had risen to an intra-day high of US$1,814.72, was 67 cents lower at US$1,792.60 per ounce while silver gained 2 cents to US$39.30.
Nymex crude oil rose 94 cents to US$83.83 per barrel.
The ringgit was quoted at 2.997 to the US dollar and 4.271 to the euro.
Philippine share prices on Thursday defied the global downtrend and extended their climb as investors flocked to mining stocks amid record gold prices.
At the Philippine Stock Exchange, the composite index rose 20.88 points, or 0.49 percent to 4,311.02, while the broader all-shares index inched up 8.73 points, or 0.29 percent to 2,996.81.
Market breadth was negative as decliners beat advancers, 86 to 62, while 37 stocks were unchanged. A total of 7.27 billion shares worth P7.13 billion changed hands.
“The local mart maintained its momentum during previous sessions, bucking the trend of Wall Street.
Mining sector took the limelight, inspired by bullish global gold prices,” said Freya Natividad, investment analyst at 2TradeAsia.com.
“However, momentum support for each rally should be checked, specifically reversal of prior sessions’ net foreign selling position,” Natividad said.
Lepanto Consolidated Mining, Philex Mining and Semirara Mining took the lead and lifted the mining sector, which rose by 4.21 percent.
As recession fears engulfed world markets, investors found refuge in gold, which rose to a record above $1,800 per ounce before settling at $1,784.
Investor relief after the US Federal Reserve decision to keep interest rates at super low levels was short-lived as the sell-off resumed in Wall Street on concerns that Europe’s debt crisis could affect French banks, spilling into the US financial sector. Overnight, the Dow Jones Industrial Average lost 519.83 points, or 4.62 percent, to 10,719.94.
“We expect more gyrations in the market, given volatile movements overseas,” Natividad said.
Investors were advised to take advantage of opportunities and selectively buy stocks, said Prince Anthony Yeung of AB Capital Securities Inc.
“Mining stocks, particularly those into gold, serve as favorites now as gold prices ascend amidst a flight to safety by global investors,” he said.
Singapore shares closed lower on Thursday, with the benchmark Straits Times Index at 2796.22 down 0.89 percent, or 24.87 points.
About 2.6 billion shares exchanged hands.
Losers beat gainers 502 to 134.
The Stock Exchange of Thailand main index went up 1.86 points or 0.18 percent to close at 1,062.07 points at the end of trading session on Thursday. The trade value was 30.31 billion baht, with 3.90 billion shares traded.
The SET50 index ended at 738.08 points, up 0.73 points or 0.10 percent, with a total trade value of 22.33 billion baht.
The SET100 index went up 2.56 points or 0.16 percent to stand at 1,609.88 points, with a total turnover of 26.20 billion baht.
The SETHD index went up 4.49 points or 0.44 percent to stand at 1,018.05 points, with total trade value of 7.38 billion baht.
The MAI index went up 2.92 points or 0.97 percent to close at 304.41 points, with total transaction value of 671.78 million baht.
Top five most active values were as follows:
KBANK closed at 129.00 baht, up 3.00 baht (2.38 percent)
PTT closed at 315.00 baht, down 2.00 baht (0.63 percent)
ADVANC closed at 116.00 baht, up 2.50 baht (2.20 percent)
BANPU closed at 674.00 baht, down 12.00 baht (1.75 percent)
CPF closed at 31.75 baht, up 0.75 baht (2.42 percent)
Trades on the HCM City Stock Exchange failed to sustain an early rally yesterday, with shares falling in the closing minutes and the VN-Index ending the session at 385.96, a decline of 0.45 per cent from the previous day's close.
The value of trades reached VND485.4 billion ($23.6 million) on a volume of 27.1 million shares.
Weak demand and the decline in the volume and value of Sacombank (STB) caused yesterday's market plunge, said analysts of financial information website vietstock.vn. STB plunged 12.6 per cent yesterday on a volume of just 99,000 shares, as the ex-date passed for shareholders to participate in the bank's dividend payout.
Of the 10 leading shares by capitalisation, those of real estate developer Vincom (VIC) dropped to floor price, while insurer Bao Viet Holdings (BVH) fell by 3.4 percent and PetroVietnam Finance (PVF) dropped by 2.5 percent.
Four others managed gains of 0.7-2.1 percent, including Eximbank (EIB), real estate developer Hoang Anh Gia Lai (HAG), software giant FPT (FPT) and food processor Masan Group. Property trader Tan Tao (ITA) was the most-active share with over 1.1 million shares traded.
After several days of soaring as shares plunged, gold prices eased yesterday. Tuesday's decision by the State Bank of Viet Nam to allow the importation of 5 tons of gold helped ease the domestic price to VND44.4 million (US2,200) per tael.
"However, we can only soothe the gold fever if world gold prices also decline," said Bao Viet Securities Co analyst Tran Hai Yen.
On the Ha Noi Stock Exchange, the HNX-Index recovered 1.5 percent of its value on mixed trading to conclude the session at 66.62 points. Value fell by 31.5 percent from Tuesday's session to VND264.3 billion ($12.8 million) on a volume of 26.75 million shares.
Kim Long Securities Co (KLS) was the most-active share nationwide, with 3.5 million changing hands.
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