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ASEAN STOCK WATCH Asean Affairs  23 August 2012

ASEAN Stocks Hit by Europe Debt Crisi

By Shayne Heffernan Ph.D.

Many Federal Reserve policy makers said additional stimulus would probably be needed soon unless the economy shows signs of a durable pickup, according to the record of the Federal Open Market Committee’s July 31-Aug. 1 gathering released today in Washington.

Policy makers said after the meeting that they will step up record stimulus if needed to spur growth and cut a jobless rate stuck above 8 percent since February 2009. Chairman Ben S. Bernanke will have an opportunity to clarify his views in an Aug. 31 speech at a forum for central bankers in Jackson Hole, Wyoming, where he signaled a second round of bond buying by the Fed in 2010. Fed officials next meet on Sept. 12-13.

Japan’s trade with the rest of the world in July showed a shortfall of 517.4 billion yen ($6.5 billion), the largest ever deficit for the month and nearly double the 275 billion yen deficit that had been forecast.

The figure also marked a drastic reversal of June’s numbers, when Japan recorded a small but respectable surplus of 60.3 billion yen.

The data showed “the recent trend in which weakness in China and Europe has been putting major downward pressure on Japan’s trade is getting even more serious,” said Takahiro Sekido, Japan strategist of Global Markets Research at Bank of Tokyo-Mitsubishi UFJ.

The latest figures “indicate that they are not just risks anymore but a reality,” he told Dow Jones Newswires, adding the result may encourage the Bank of Japan to take “preemptive” action to shore up the economy, where exports play a vital role.

He said he expected the next monetary easing moves by the Japanese central bank to come in late October, when it is slated to release a semi-annual outlook report.

Overall exports slid 8.1 percent to 5.31 trillion yen with shipments of electronic parts falling, even as automobile exports rose.


The country’s balance of payments registered a surplus of $3.182 billion in July, up by 151 percent from $1.267 billion in the same month in 2011, the Bangko Sentral ng Pilipinas reported on Wednesday.

For the first seven months of this year, the BOP surplus stood at $4.498 billion, down by 28 percent from $6.283 billion in the same period in 2011.

The year-on-year growth in the BOP surplus during the month was credited partly to the increase in foreign portfolio investments, which were driven by the upbeat sentiment on the Philippines.

During the month, credit-rating firm Standard & Poor’s upgraded the Philippines’ credit rating from two notches to just one notch below investment grade. S&P cited the Philippine government’s improving fiscal condition, the growing economy, and the country’s rising foreign exchange reserves.

A balance of payment surplus happens when the foreign currency inflows exceed the outflows.


KLCI index gained 2.46 points or 0.15% on Wednesday. The Finance Index increased 0.30% to 14848.91 points, the Properties Index up 0.09% to 1061.56 points and the Plantation Index rose 0.22% to 8660.78 points. The market traded within a range of 5.80 points between an intra-day high of 1655.39 and a low of 1649.59 during the session.

Actively traded stocks include INGENS-WA, INGENS, ASUPREM, UTOPIA, NICORP, INIX, MAYBANK, SCOMI, THHEAVY and THHEAVY-WA. Trading volume decreased to 1353.10 mil shares worth RM1622.63 mil as compared to Friday’s 1481.48 mil shares worth RM1645.91 mil.

Leading Movers were MAYBANK (+14 sen to RM9.19), UMW (+36 sen to RM10.32), PETDAG (+62 sen to RM23.00), PETGAS (+22 sen to RM19.50) and TENAGA (+4 sen to RM6.84). Lagging Movers were DIGI (-2 sen to RM4.91), CIMB (-5 sen to RM7.81), GENM (-9 sen to RM3.40), AMMB (-7 sen to RM6.32) and GENTING (-3 sen to RM9.03). Market breadth was positive with 399 gainers as compared to 379 losers.


Coordinating Minister for the Economy Hatta Rajasa has been urging two major foreign mining subsidiaries, Freeport Indonesia and NNT, which is the local unit of US mining giant Newmont Mining, to go public.

Hatta said that in meetings with the management of the two companies, agreements had been reached regarding an IPO; but he also said that renegotiations on revenue sharing with the two companies had to be completed before an IPO could take place.

The government has been seeking higher revenues from long term mining contracts.

“We hope to complete the renegotiation this year because all sides want it,” Hatta said, adding a list of government desires, including requiring miners to return portions of land they’re not using to the state, that smelters be built, that local participation in mining be raised and, of course, the requirement for the IPO and a higher government share of royalties, or revenue from gross sales.

The 7 percent stake in NNT is valued at $246.8 million, the amount that the government and the miner agreed to in a deal last year.

NNT runs the country’s second-biggest copper and gold mine on Sumbawa island in West Nusa Tenggara (NTB) province — the district head of West Sumbawa expects the central government to give priority to the district in its attempt to acquire a 7 percent stake in NNT, after the central government was blocked last month from buying NTT’s 7 percent stake.

Under Newmont’s current contract of work, the gold and copper miner is required to divest 51 percent of its stake in several stages.


The Kasikorn Research Centre projected that the Thai economy in the second half of this year will likely to grow 7-9 per cent despite risks such as export slowdown, inflation and a possible higher production cost.

In the second half of this year, the centre sees the Thai economy expanding within a range of 7-9 per cent, compared to last year’s low economic performances impacted by a devastating flood.

The Thai economy has been driven by government spending but exports are still at risk. Private sector spending may slow down after having sped up during the post-flood period in the first half of this year.

Meanwhile, production cost and inflation may rise, so the centre has retained its projection of Thai economic growth at 4.5-5.5 per cent.

The centre saw the Thai economy growing only 2.2 per cent in the first half of this year due to accelerating spending of the government and private sectors and recovery of industrial production.

The industrial production in the first half of the year grew 4.2 per cent, compared to the same period last year, higher than the 0.4 per cent growth registered in the first quarter

via Thai economy to grow 7-9% in second half of 2012.

Top five most active values were as follows;

DTAC               stood at             87.50 baht, up 3.25 baht (3.86%)
INTUCH             stood at             68.50 baht, up 1.75 baht (2.62%)
SCB                stood at            153.50 baht, down 1.00 baht (0.65%)
KTB                stood at             17.90 baht, up 0.50 baht (2.87%)
BBL                stood at            196.00 baht, down 2.50 baht (1.26%)

Tokyo fell 0.27 percent, or 25.18 points, to 9,131.74 after Japan reported a wider-than-expected trade deficit in July as exports to Europe and Asian neighbors plunged.

Sydney dipped 0.17 percent, or 7.4 points, to close at 4,376.0, as mining giant BHP Billiton delayed expansion of its massive Olympic Dam copper and uranium mine after posting a near 35 percent slump in annual net profit.

Seoul fell 0.41 percent, or 8.03 points, to 1,935.19, Hong Kong was down 1.06 percent, or 212.31 points, to 19,887.78, while Shanghai slipped 0.50 percent, or 10.56 points, to 2,107.71.
Taipei fell 0.14 percent, or 10.23 points, to 7,496.58.

TSMC fell 1.44 percent to Tw$82.4 while Hon Hai Precision was 0.23 percent higher at Tw$86.1.

– Wellington was down 0.80 percent, or 26.36 points at 3,658.38.

Fletcher Building was off 5.1 percent at NZ$6.32 after posting a 35-percent fall in annual net profit, while Telecom Corp. slipped 1.1 percent to NZ$2.775.

– Bangkok rose 0.15 percent, or 1.85 points, to 1,234.14.

Banpu shed 0.43 percent to 458 baht while PTT dropped 0.59 percent to 339 baht.

– Kuala Lumpur gained 0.15 percent, or 2.46 points, to 1,652.25.

Malayan Banking climbed 1.6 percent to 9.19 ringgit, while utility Tenaga Nasional added 0.6 percent to 6.84 ringgit.

– Singapore slipped 0.53 percent, or 16.30 points, to 3,049.47.

City Developments gained 1.56 percent to Sg$11.70 and United Overseas Bank added 0.45 percent to Sg$19.98.

– Manila fell 1.05 percent, or 54.66 points, to 5,152.15.

– Mumbai slipped 0.21 percent, or 38.4 points, to 17,846.86.

India’s biggest mobile phone firm Bharti Airtel fell 2.82 percent to 251.35 while state-run Corporation Bank lost 3.01 percent to 377 rupees.

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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It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

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