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ASEAN STOCK WATCH 13  August  2010

ASEAN Stocks Ready to Rally

Shayne Heffernan

ASEAN Markets outperformed the world this week, and I strongly suspect today they may rally against the trend. ASEAN Economic fundamentals combined with the low stock valuations make ASEAN a hot investment destination for global investors.

For the Investors with a Green Conscience keep an eye on ASEAN Affairs premium where Ebeling Heffernan will be publishing the hottest green stocks in ASEAN that are worth buying.

After fighting for the past three days to sustain its 3,500 level, the bellwether Philippine Stock Exchange index succumbed to selling pressure and finished 1.13 percent or 39.81 points lower to 3,483.02.

The sell-off was across the board with the all-share index and all six subsector indices finishing lower. The property sector was battered the most, losing as much ash 1.71 percent or 23.13 points to 1,329.38.

Trading volume thinned to 902 million shares valued at 3.65 billion pesos (81.11 million U.S. dollars). Decliners swamped advancers 107 to 28 while 30 shares did not move.

Thursday’s decline however hardly came a surprise to most analysts who have long been expecting the market’s correction after closing to a 31-month high last week.

Analyst Justino Calaycay of Accord Capital Equities Corp. described the mass profit taking as an inevitable, while brokerage AB Capital Securities, Inc. said that the past flat performances of the market during the past three days show that it is slowly losing its momentum.

It was the more than 200-point drop of the Dow Jones industrial average index that gave off the market.

Local investors, who have been mostly undecided during the past session, took their cue from the U.S. market which made a ” convincing move” Wednesday night that resulted to Thursday’s sell down.

Stocks in the 30-company index finished lower. Among the most actively traded issues were Megaworld Corp., Philippine Long Distance Telephone Co. and Alliance Global Group, Inc.– all of which finished in the negative.

The Stock Exchange of Thailand (SET) composite index on Wednesday gained 0.21 point or 0.02 per cent to close at 862.16 points. The market value was 25.24 billion baht, with 7.50 billion shares traded.

TRUE closed at 6.15 baht, down by 0.10 baht or 1.60 per cent.

CPF closed at 24.70 baht, down by 0.20 baht or 0.80 per cent.

ITD closed at 3.22 baht, up by 0.08 baht or 2.55 per cent.

PTT closed at 250.00 baht, down by 1.00 baht or 0.40 per cent.

NWR closed at 0.97 baht, up by 0.06 baht or 6.59 per cent.

The Thai economy could expand by seven to eight per cent this year on the back of the recovery in the tourism sector and the investment in the Strong Thailand (Thai Khem Kaeng) stimulus scheme by the government, the University of the Thai Chamber of Commerce (UTCC) said.

“The economy is expected to grow by four to five per cent in the second half of the year.

“The fragile economy in the US and European Union should not have much effect on the Thai economy,” Thanawat Polwichai, director of Economic and Business Forecasting Centre of the university said on Thursday.

Bursa Malaysia traded flat falling 3.58 points to 1,349.33., 298 counters were up, 383 were down while 261 remained unchanged. There were 798.1 million shares done at a total value of RM1.09 billion.

Among the heavyweights, Genting lost 8 sen to RM7.70, Maybank shed 4 sen to RM7.66 and IOI Corp slipped 3 sen to RM5.09.

Tenaga lost 4 sen to RM8.60, PPB shed 20 sen to RM17.36 and Genting Malaysia slipped 4 sen to RM2.74.

Crude palm oil third-month futures was RM2 higher at RM2,679 per tonne.

The ringgit was quoted at 3.1848 to the US dollar.

The JCI slipped 9.67 points, or 0.3 percent, to close at 3,025.64. About 3.9 billion shares worth Rp 3.13 trillion ($347 million) changed hands. Decliners were even with gainers at 89.

The rupiah fell 0.4 percent to 9,023 per dollar as of 4:26 p.m. in Jakarta, paring its rise for the year to 4.1 percent, according to data compiled by Bloomberg.

World markets plunged after the Federal Reserve announced on Wednesday that the US recovery was weakening and would require fresh stimulus.

News that China’s industrial output rose the least in 11 months as well as drops in European industrial production added to signs that the world’s third-biggest economy was slowing.

The MSCI Asia-Pacific Index of regional shares dropped 1.4 percent, taking losses this week to 4.3 percent.

Purbaya Yudhi Sadewa, an analyst at Danareksa Research Institute, said the JCI had performed well by dropping less than 10 points despite the foreign negative sentiment.

“The negative weather from global markets will be short-term because Indonesia’s economy is quite stable,” Purbaya said.

In local markets, energy stocks fell in line with crude prices. Energi Mega Persada, the nation’s second-biggest listed oil company, dropped 3.7 percent to Rp 103, and oil services company Elnusa retreated 1.5 percent to Rp 335.

Crude oil for September delivery had its sharpest fall in six weeks, losing 2.8 percent to $78.02 a barrel in New York on Wednesday.

The contract was at $76.95 a barrel in after-hours trading.

International Nickel Indonesia dropped 2.4 percent to Rp 4,125 as tin futures fell 3.6 percent to $19,850 a metric ton in London on Tuesday, the steepest drop since June 4.

Agriculture stocks had a mixed day as Astra Agro Lestari, the nation’s biggest listed plantation company, declined 2.4 percent to Rp 20,050 rupiah, while rival Perusahaan Perkebunan London Sumatra Indonesia rose 3.8 percent to Rp 9,550.


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