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ASEAN STOCK WATCH Asean Affairs  16 August 2012

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

By Shayne Heffernan Ph.D.

The benchmark S&P 500 index finished just a hair away from its highest close in three months, but with earnings season winding down and many traders away, volume was light.

For the next couple of days the greatest influence may be the options market, which is seeing heavy volume in August call and put options clustered around the 1,400 level for the S&P 500.

If the index closes at or very close to 1,400, those options expire worthless on Friday. That means market-makers have an incentive to try to make that happen, or "pin" the index at 1,400.

The S&P 500 was up seven of the past nine sessions but the volume has been extremely light due to summer holidays and a lack of news from Europe. On Wednesday, about 4.79 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's daily average of 7.84 billion.


Ecobank Capital, the investment banking arm of Ecobank, on July 25, 2012, announced it has successfully raised, in FCFA and Euro equivalent, the sum of $228 million required to close the first tranche of a loan syndication on behalf of Olam Palm Gabon (OPG), a joint venture between Olam International and the Gabon government.

In a statement, Ecobank said the facility comprises a $20 million 10-year FCFA tranche and a $208 million seven-year Euro and FCFA tranche, extendable to 12 years.

According to the syndicate arranger, the proceeds will be used to finance the establishment of a 50,000-hectare palm oil plantation and crushing mill in Gabon and once at full capacity, the project will make Gabon one of West Africa’s leading palm oil producers, potentially overtaking Côte d’Ivoire as the region’s largest palm oil exporter.

Ecobank Capital acted as the mandated lead arranger, working with two co-arranging banks, namely, Afreximbank and BGFI Bank Gabon. The Central African Development Bank participated as a lender. The closing ceremony was held in Paris on the July 12.

The second tranche of the syndicated loan is likely to be placed with international development finance institutions at a later date, Ecobank said.


Malaysia’s economy grew a faster than expected 5.4 percent in the second quarter as robust domestic demand helped offset the impact of the global economic woes, the government said Wednesday.

 Solid foreign demand for key Malaysian export commodities such as oil, natural gas and palm oil also contributed to the pick-up in pace for Southeast Asia’s third-largest economy, which grew a revised 4.9 percent in the first quarter.
“For the Malaysian economy, the strong support provided by domestic demand, underpinned by activities in both the private and public sectors, have ensured higher growth amidst the challenging global environment,” Bank Negara, the central bank, said in a statement.
Analysts had been expecting growth to come in at around 4.6 percent for the April-June period, said Yeah Kim Leng, chief economist with financial research firm RAM Holdings.

“The 5.4 percent growth in the second quarter suggests that Malaysia is able to weather the recession in Europe,” said Yeah.
However, he added that the second half of 2012 will be “challenging” as the impact of the European economic problems begin to be felt more acutely around the world.
Bank Negara had previously forecast full-year growth between four and five percent this year, slower than the 5.1 percent seen in 2011.

Inflation moderated to 1.7 percent in the second quarter from 2.3 percent in the previous period on declining prices of meat and vegetables, the central bank said.

Prime Minister Najib Razak, who must call fresh elections by mid-2013 and who faces a strengthening opposition, has set a goal of Malaysia becoming a “high-income developed nation” by 2020.

He said last year that annual growth of at least 6 percent was needed to achieve that.

The government has promised major infrastructure projects and financial market liberalization to attract foreign investment and boost growth, but critics say the results have been limited.


Philippine Stock Exchange index added 0.72 point, or 0.01 percent, to finish at 5,266.66 in thin trade ahead of a much-anticipated MSCI Index review. Across the region, stock markets were mostly lower.

For the next index review, the market is anticipating an increase in the weight on URC and a decrease in weight on Meralco to factor the changes in these companies’ public floats. URC (+2.55 percent) is seen gaining index weight as the place-out of treasury stocks in June improved its liquidity. On the other hand, the public float of Meralco (-0.69 percent) had significantly seen a decline, fund managers said.

Sentiment at the local market was mixed, with the financial and industrial counters keeping the main index afloat while the holding firms, services, mining/oil and property counters ended slightly lower.

Value turnover was thin at P4 billion as the so-called Chinese “ghost month,” which starts August 17, draws near. Despite the overall index gain, there were only 66 advancers, which were outnumbered by 89 decliners.

Other index stocks that contributed to the day’s meager index rise were AGI (+1.28 percent) and JFC (+1.42 percent). JFC reported better first-semester profits. Metrobank, PLDT and AEV also contributed to the PSEi’s gains.


Sri Trang Agro-Industry sunk into the red in the fiscal second quarter and half year ended June 30, 2012.

The group posted a net loss of 441.36 million baht (US$14.03 million) for the three months and six months loss of 43.89 million baht.

Turnover decreased 30 per cent year on year in the reporting quarter to 24.62 billion baht from a year ago.

The decline of sales year on year was driven by a decrease of both average selling price by 25.2 per cent and sale volume by 7.0 per cent, with stalling demand growth amid rising concerns over weaker outlook of global economy, which pressured prices to tilt downward through the end of Q2 2012.


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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