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ASEAN STOCK WATCH 17  August  2010

ASEAN Markets Open the Week Well

Shayne Heffernan

The Malaysian stock market staged an encouraging rally today lifted by gains in selected blue chips.

At 5pm, the FBM KLCI rose 10.43 points to close at 1,370.58. Turnover at 973.537 million shares was valued at RM1.362bil.

Malaysia later this week will report its gross domestic product (GDP) growth for the second quarter of 2010. Economists expect the GDP growth to remain strong, but at a moderated pace.

The Government on Wedneday will also announce the consumer price index growth for the country for July 2010.

There were 405 counters on Bursa Malaysia that posted gains and 320 losses.

Leading gainers were Genting that was up 54 sen to close at RM8.72; British American Tobacco 42 sen to RM44.20; KFC Holdings 30 sen to RM10.80; Cocoaland 27 sen to RM2.82; and Kulim 26 sen to RM8.35.

Among the top losers were MTD Capital that was down 42 sen to close at RM5.10; PW 24 sen to 46 sen; PPB Group 22 sen to RM17.08; Mudajaya 18 sen to RM4.10; and Boustead Heavy 14 sen to RM4.68.

Meanwhile, 261 counters traded unchanged. Besides Bursa Malaysia, the Hong Kong and the Chinese stock markets also ended the day in positive territory, on reports that China have overtaken Japan as the world’s second largest economy. This came after the Japanese economy posted a dismal annualised 0.4% growth for its GDP for the three months to June 2010.

Hong Kong’s Hang Seng Index rose 40.55 points to close at 21,112.12, while Shanghai’s A share index advanced 55.01 points to close at 2,661.71.

Tokyo’s Nikkei 225 lost 56.79 points, or 0.61%, to close at 9,196.67, while Seoul’s Kopsi Index was down 2.93 points to 1,743.31, and Singapore’s Straits Times Index lost 6.46 points to 2,933.51.

At around 5.20pm, Nymex crude oil was quoted at US$75.54 per barrel; gold at US1,222.75 an ounce; and the ringgit at 3.181 to the US dollar.

Malaysia Airlines said on Monday it sank into the red in the second quarter, due to losses on fuel hedging and higher fuel prices.

The airline said it made a loss of 535 million ringgit (S$229 million) compared to a net profit of 875.5 million ringgit in the same period a year ago, for the quarter ended June 30. The losses came despite total revenue climbing 26 percent to 3.21 billion ringgit in the quarter from 2.54 billion ringgit a year, weighed down by a fuel hedging loss of 217 million ringgit, it said in a statement.

A 44 per cent rise in fuel costs caused operational gains to be wiped out and resulted in an operating loss of 285.6 million ringgit in the second quarter, it said.

‘While we are doing the right things and this is reflected in the improved operational performance in the second quarter, which is traditionally our weakest quarter, we have instituted additional measures to recover more of the fuel cost increases,’ chief executive officer Azmil Zahruddin said. ‘The volatility of the fuel price remains a key challenge for the industry,’ he added.

Mr Azmil said the company’s second quarter seat factor rose to 74.4 percent from 65.8 per cent a year earlier while yield grew 2.0 per cent to 0.24 ringgit. He said the airline has completed discussions with Airbus and will take delivery of its first A380s in April 2012.

MAS had placed an order for six of the giant planes which were initially to be delivered from January 2007, but this was first pushed back to late 2011 before the latest delay to 2012.

The main-share Philippine Stock Exchange index added 10.06 points or 0.29 percent to close at 3,479.67.

The local market opened with a bearish note, reflecting the sluggish sentiment in Wall Street Friday, but selective buying eventually boosted the index.

Metrobank was the day’s most active stock, rising 4.3 percent to P62.20 on news that first semester net profit jumped 36 percent to P4.2 billion.

The property and mining/oil counters also enjoyed strong investor interest, rising 1.2 percent and 1.65 percent, respectively.

“There’s still a lot of liquidity in the market and many investors are playing catch-up, taking advantage of any weakness to buy more, notwithstanding concerns over a possible double-dip US recession,” said Paul Joseph Garcia, chief executive officer at ING Investment Management Philippines, which manages the country’s biggest equity fund.

“But of course, the overall tone is still cautious and investors are focusing on specific stocks that offer good earnings prospects,” Garcia said.

There were 56 advancers, 60 decliners and 50 unchanged stocks. Value turnover amounted to P3.86 billion.

On Friday, the US Dow Jones Industrial Index was down by 16.8 points or 0.16 percent to 10,303.15.

Foreign investors were net buyers of THB399 million ($ 12.53 million) worth of Thai stocks Monday out of a total of THB28.05 billion traded, the Stock Exchange of Thailand said.

Figures are in millions of baht (THB):

Bought % Sold % Net

Institutional 1,209 4 3,043 11 -1,834

Proprietary 2,645 9 2,618 9 27

Foreign 7,466 27 7,067 25 399

Retail 16,728 60 15,320 55 1,408

In the month to date, foreigners have been net buyers of THB6.72 billion of Thai shares.

In the year to date, foreigners have been net sellers of THB3.72 billion of Thai shares.

Note: Foreign activity represents transactions by both institutions and individuals, local retail activity is by Thai nationals only, and institutional activity is by domestic institutions, SET member-brokers and sub-brokers.

Stocks with most active value were as follows:

KBANK decreased to 100.00 baht, down 2.50 baht.

PTT increased to 255.00 baht, up 5.00 baht.

TRUE decreased to 6.05 baht, down 0.10 baht.

CPF increased to 24.90 baht, up 0.20 baht.

SCB decreased to 89.25 baht, down 1.50 baht.

As we expected the JCI Jakarta Index posted a strong day today and we expect that to continue through out the balance of the week. Keep a close eye on Bumi this week, Indonesia’s Banks are also expected to improve over the next few months.

The Jakarta Composite Index climbed 27.37 points, or 0.9 percent, to close at 3,053.01, losing 0.3 percent for the week. About 3.43 billion shares worth Rp 4.83 trillion ($540 million) changed hands. Gainers edged out decliners 119 to 81.

“Investors were encouraged after seeing good earnings,” said Kenji Sekiguchi, general manager of strategic research and investment at Mitsubishi UFJ Asset Management. “The global economy will get back on the recovery track in two or three months.”

Genting Singapore, a unit of Asia’s second-biggest listed casino operator, and Taiwan’s Wintek, which makes liquid-crystal displays, surged at least 6.9 percent after the companies returned to profit in the second quarter. Hutchison Whampoa rose 2.6 percent in Hong Kong after billionaire Li Ka-shing made his biggest investment in the shares in at least seven years.

The finance sector led local gains, with Bank Negara Indonesia, the nation’s third-biggest state-owned bank, advancing 5 percent to Rp 3,150. Thursday’s sale of a 3.1 percent stake in the lender attracted demand of 3.93 times more than shares on offer, and raised Rp 1.37 trillion.

Timah, Indonesia’s largest tin producer, rose 3.2 percent to Rp 2,425.

State-owned Perusahaan Gas Negara, the nation’s biggest distributor of the fuel, climbed 1.2 percent to Rp 4,100.

Meanwhile, the rupiah advanced the most since June on optimism the nation’s improving economy would continue to lure funds from abroad.

The rupiah gained 0.5 percent to 8,975 against the dollar as of 4:16 p.m. in Jakarta, the most since June 21, according to data compiled by Bloomberg. The currency ended the week down 0.4 percent.

The rupiah pared its losses for the week after research firm EPFR Global said funds investing in emerging-market local-currency debt have attracted $16.9 billion of net inflows so far this year, more than triple the record annual intake of $5 billion recorded in 2007.

Indonesia expanded at the fastest pace in almost two years during the second quarter, and foreigners invested $1.4 billion here this year.

“The rupiah is being supported by strong economic fundamentals and the trend of increasing foreign funds and portfolio investment,” said Helmi Arman, an economist at Bank Danamon in Jakarta. “There is no reason for a sustainable depreciation of the currency.”

The rupiah may average 9,100 against the dollar this year, Bank Indonesia Governor-designate Darmin Nasution said on Friday.


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