ASEAN KEY DESTINATIONS
Asean Stock Watch- August 15
On Friday, the Dow Jones Industrial Average jumped 1.13 per cent on positive retail data.
Stocks gained for a third day on Friday as local investors viewed share prices as cheap following recent declines and the market was lifted by Thursday’s rebound on Wall Street.
The Jakarta Composite Index gained 21.16 points, or 0.6 percent, to close at 3,890.53, lifting its three-day advance to 4.2 percent. More than 6.63 billion shares valued at Rp 5.37 trillion (US$628 million) changed hands.
Gainers outnumbered decliners, 162 to 68. Foreign investors sold Rp 337 billion more in shares than they bought.
“Investors are taking advantage of cheap valuations,” said Mastono Ali, an analyst at CIMB Securities Indonesia. The index reflects share prices sitting at 12 times estimated earnings, which is lower than the multiple of 15 experienced last month, when the index was closing at record highs, he said.
But Mastono warns investors to be cautious and beware of developments in global markets.
The JCI lost 0.8 percent this week as global markets were shaken by concerns of slowing economic growth in the United States and Europe. On Thursday, the Dow Jones industrial average surged 4 percent, after losing 4.6 percent the previous day.
On Friday, stocks in Europe rose as the practice known as short-selling was banned in financial shares in Spain, Italy, France and Belgium, in a move to stabilize markets there.
In Indonesia, the agriculture sector gained the most on Friday, up 1.5 percent. Crude palm oil for the October contract rose 0.4 percent to 3,004 ringgit ($1,000) at Bursa Malaysia.
London Sumatra Plantation rose 1.1 percent to Rp 2,325, while Sampoerna Agro gained 5.2 percent to Rp 3,572. Sinar Mas Agro Resources and Technology advanced 1.6 percent to Rp 6,350.
Energi Mega Persada, a crude oil and gas producer, rose 2.5 percent to Rp 205. Investor Daily reported that the company is considering selling a 10 percent stake in a secondary offering to raise money for expansion.
XL Axiata, the third-largest telecommunications provider, rose 2.9 percent to Rp 5,300. The company said it is planning to refinance its Rp 900 billion debt this year, and may take a bank loan.
The rupiah fell 0.13 percent against the dollar to 8,541 on Friday. The rupiah fell 0.07 percent this week against the greenback.
BursaMalaysia is likely to be volatile this week as investors continue to be jittery over the European debt crisis, coupled with the negative rating of the US economy by Standard & Poor's, dealers said.
The local bourse started last week on a choppy note, in line with the regional bourses on news of possible financial crisis.
This resulted in huge sell-off and dragged the FTSE Bursa Malaysia KLCI to below 1,500 level for the first time since March 17, 2011.
Affin Investment Bank head of retail research, Dr. Nazri Khan, said the Asian markets would likely continue bouncing this week as a drop in the US jobless claims eased concerns about the global economic recovery, boosting global exporters and commodity producers.
Meanwhile, on the corporate scene, Malaysia Airlines and AirAsia hogged the limelight with share swap deal, creating a powerful synergy between them and totally changed the local airline industry landscape.
On a Friday-to-Friday basis, the FBM KLCI dropped 40.76 points to 1,483.67 from 1,524.43 previously.
The Finance Index fell 416.41 points to 14,072.74, Industrial Index declined 43.23 points to 2,715.01 and the Plantation Index lost 384.49 points to 7,208.45. The FBM Emas Index decreased 33.12 points to 10,147.1, FBM Ace slashed 255.93 points to 3,794.09, FBMT100 erased 304.17 points to 9,963.58 and FBM70 dived 460.92 points to 11,052.20.
Total weekly volume increased to 7.776 billion units valued at RM14.682bil from 6.020 billion shares worth RM9.858bil previously.
The main market turnover improved 6.135 billion unit valued at RM14.448bil from 4.089 billion units valued at RM9.53bil.
Volume on the ACE market dropped to 1.033 billion shares worth RM162.075mil from 1.38 billion shares worth RM236.207mil.
Warrants rose to 586.675 million units valued at RM64.915 million from 481.029 million units valued at RM71.227 million previously.
At 9.30 a.m. (0139gmt) Monday, there were 246 gainers, 66 losers and 139 counters traded unchanged on the Bursa Malaysia.
The FBM-KLCI was at 1,487.70 up 4.03 points, the FBMACE was at 3,811.87 up 17.78 points, and the FBMEmas was at 10,182.37 up 35.27 points.
Turnover was at 121.327 million shares valued at RM68.025 million.
The Philippine stock market may remain at the mercy of external developments, but bargain hunters are seen to be on the prowl after its steep decline in the previous week.
“Investors are expected to keep on the hunt for already bargain counters, focusing more on the fundamental resilience of the broad economy as well as positive corporate numbers through the first semester,” said Jun Calaycay of Accord Capital Equities Corporation.
Week on week, the Philippine Stock Exchange index plunged 173 points or 4 percent following a bloodbath in Wall Street triggered by Standard & Poor’s unprecedented US credit downgrade.
While Philippine fundamentals look much better than before and when compared with developed economies, investor sentiment will remain anchored on movements and developments in the global markets.
“Equities markets in industrialized nations such as US and UK may continue to gyrate, as fund managers heed for details on specific measures that will be taken to best resolve debt challenges through the ‘least painful’ scheme,” said Freya Natividad, investment analyst at 2TradeAsia.com.
“There is also the growing reality that the US economy is heading back into a recession and this will dampen appetite for risky assets,” said AB Capital Securities Inc.
On Friday, Wall Street capped one of its most volatile weeks in history with gains on the back of an upbeat retail sales report. The Dow Jones Industrial Average gained 125.71 points or 1.13 percent to 11,269.02.
The market’s technical condition has moved over to the side of the fundamentals, presenting investors with an opportunity to rebuild their equity portfolio for the medium- to long-term, Calaycay said.
He advised investors to beef up their equity portfolio with stocks of “good companies undergoing bad times” with index-related counters as the principal candidates.
Last week’s meltdown pulled down global indices trading multiples, but the PSEi ranks among the most expensive compared with US, Europe, select Asian and Southeast Asian markets.
At its current value of 14.9 times, the benchmark index is a tad below the historical average of 15 times trailing 12-month earnings.
Calaycay attributed the short-term negative volatility in stock prices to the market’s inability “to quantify or make an acceptable and intelligent, or at least reasonable, forecast with respect to the how, and where, these external influences will affect and lead the domestic economy.”
He said Philippine exports, which contribute nearly a fifth of the national expenditures account, could feel the pinch of the problems from the US and UK. The two sources of uncertainty account for nearly a fourth of the Philippines’ export market.
“In addition to this direct contribution, personal incomes derived from employment with exporters and manufacturers determine the level of consumption, which in turn ploughs in 45 percent of GDP/GNP,” Calaycay said.
“In the extreme case, another round of global recession, even as individual economies continue to struggle to emerge out of the 2008 phase, will slow exports, possibly dislodging workers in that segment of the domestic economy, and eventually scrimping consumption levels,” he added.
Singapore shares opened higher on Monday, with the benchmark Straits Times Index at 2,879.94 in early trade, up 1.03 percent, or 29.35 points.
Around 62.2 million shares exchanged hands.
Gainers beat losers 152 to 37
The Stock Exchange of Thailand staged a modest rebound after the US Federal Reserve pledged to keep interest rates near zero for two more years if that's what it takes to get the world's largest economy moving again.
The SET index moved between 1,033.38 and 1,087.16 points and closed a four-day trading week at 1,062.07 points, down 2.86 percent from a week earlier.
Foreign investors -spooked by Standard & Poor's move to trim Washington's credit rating - were big net sellers of 17.9 billion baht in Thai shares on the week. Local institutions sold 4.31 billion baht while brokers bought 132.36 million and retail investors 22.07 billion.
Big movers: Energy and banking sectors remained in play due to their large market capitalisation. PTT closed at 315 baht, down 4.55 percent from the previous week. KBANK declined 2.3 percent to 129 baht, BBL shed 3.1 percent to 158 baht, and SCB was down 0.8 percent at 117.5 baht.
- Bangkok Life Assurance (BLA) shares continued their steady rise after reporting record-high operating results, with analysts saying the company's fundamentals remained strong. BLA rose 3.2 percent to end the week at 57 baht.
Vietnamese stocks ended Friday on a mixed note. The VN Index posted a full week loss on eroded confidence in equity, liquidity drained as a result.
The benchmark VN Index lost 0.52 points or 0.14 percent to 383.92, lowest level on 27 months.
Volume fell further by 0.8 percent to 20.1 million shares worth VND360 billion including 6.4 million shares worth VND144.28 billion changed hands in the put-through deals.
For the week, VN Index lost 16.96 points or 4.23 percent with an average daily volume of 26.72 million shares traded.
The market opened in the green with an ease from a strong gain in Wall Street overnight and a plunge in gold market. However, the buyers were not hurried, trading was slow and in caution.
Heavy weighs BVH, MSN, STB’s weak performances sent the VN Index down to the negative ground in the last 15 minutes.
Of note, BVH, MSN have been bucking the market trend in the past few days, either way. Local gold market calmed down following global market profit taking. Analysts say gold is still a factor affecting local equity market for now.
Governor Nguyen Van Binh, in an interview with local media, was confident that loan rates can be pulled down to 17-19 percent p.a. on three reasons: 1. Credit institutions’ liquidity and capital have been pretty good, so far; 2. Only few credit institutions have unbalanced capital raising and lending relations; 3. Credit growth rate in the system has been low in the past 7 months despite high capital capacity.
The Ministry of Finance has decided to keep gas and oil prices unchanged for now, aiming at stabilizing the market prices.
Back to the market, the breath today turned positive, gainers outweighed losers by 148-64 and 77 stocks unchanged 12 stocks untraded. As many as 25 stocks fell to the floor while 34 issues hit the ceiling, 5 percent each side. Among top 10 market caps, 4 gained, 4 fell, 2 broke even.
SSI gained the most active position with 0.71 million shares traded, closing up 1.2 percent to VND16,800.
GTT suddenly won the second place with 0.70 million shares traded, stayed flat at VND6,000. SBT ranked third with 0.54 million shares traded, stayed flat at VND12,300.
KTB followed in the list with nearly 0.51 million shares traded, closing up 4.8% to VND28,200. STB was in the last in the top 5 active list with 0.49 million shares traded, closing down 2.3% to VND12,800.
On the Hanoi Stock Exchange, the HNX bucked trend to close up 0.2 point or 0.3% to 66.02.
Trading volume fell 8.94 percent to 19.1 million shares traded for VND179.5 billion of which 2.26 million shares worth VND24.31 billion were changed hands in put-through deals.
For the week, HNX Index lost 2.52 points or 3.68 percent with an average daily volume of 27.242 million shares traded.
Market breadth was positive with 158 gainers, 78 losers and 71 flat issues and 81 untraded.
Among top 10 market cap stocks, 3 stock advanced, 1 declined and 6 unchanged.
SHB was the most active stock with 2.8 million shares traded, closing down 2.86 percent to VND6,800 on average.
VND was in the second place with 1.7 million shares traded, closing up 1.2 percent to VND8,800 on average.
KLS ranked third in the list with 1.6 million shares traded, closing up 1.03 percent to VND9,800 on average.
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