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ASEAN STOCK WATCH 24  August  2010

Strong Monday in ASEAN, Consolidation Seen Today

Shayne Heffernan

Another mixed day on Wall St may see ASEAN Markets come back a little today, keep a close eye on the ASX and China, positve results in those 2 markets will lift ASEAN further.

At Bursa Malaysia, 291 counters were up, 465 were down while 270 remained unchanged. There were 805.1 million shares done at a total value of RM1.34 billion. The index ended higher for the day adding 8.13 points to 1,403.15.

Among the heavyweights, CIMB jumped 22 sen to RM7.92, Genting added 11 sen to RM8.72 and PPB rose 40 sen to RM17.36.

Axiata rose 3 sen to RM4.38, Genting Malaysia added 5 sen to RM3.14 and Sime Darby gained 2 sen to RM7.83. Most Asian markets ended the day lower. Shanghai’s A share Index slipped 0.11% to 2,639.37 and Japan’s Nikkei 225 lost 0.68% to 9,116.69.

Singapore Straits Times Index lost 0.36% to 2,925.99 and Hong Kong’s Hang Seng Index slipped 0.44% to 20,889.01. Nymex crude oil was 13 cents higher at US$73.95 per barrel.

Crude palm oil third-month futures was RM17 higher at RM2,561 per tonne.

The ringgit was quoted at 3.1320 to the US dollar.

vProton Holdings Bhd recorded better earnings for the first quarter ended June 30 (Q1) year-on-year due to higher sales and better product mix.

The national car maker’s net profit surged 55.2% to RM84.7mil in Q1 versus RM54.5mil in the same quarter last year. Revenue rose 23.6% to RM2.29bil against RM1.85mil.

Proton said in a filing to the stock exchange that in line with the improved market sentiments, its domestic sales volume grew 17% due to demand for its three core models – Saga, Persona and Exora.

The Stock Exchange of Thailand (SET) composite index on Monday gained 0.86 point or 0.10 per cent to close at 894.78 points. The market value was 35.16 billion baht, with 10.76 billion shares traded.

Top five most active values were as follows;

PTT closed at 264.00 baht, down by 2.00 baht or 0.75 per cent.

JAS closed at 1.55 baht, up by 0.09 baht or 6.16 per cent.

SCC closed at 272.00 baht, up by 4.00 baht or 1.49 per cent.

SAMART closed at 9.65 baht, up by 0.30 baht or 3.21 per cent.

TMB closed at 2.22 baht, up by 0.06 baht or 2.78 per cent.

The National Economic and Social Development Board (NESDB) yesterday reported the economy expanded 9.1% in the second quarter from the same period last year, with strong export growth cushioning the negative impact of the political violence in April and May on the economy.

On a seasonally adjusted basis, Thailand’s gross domestic product rose 0.2% in the second quarter from the first quarter, down from a 3.3% rise quarter-on-quarter for the period from January to March.

The NESDB, which had previously maintained a 3.5% to 4.5% full-year growth forecast, said the economy rose 10.6% overall in the first half from the same period last year.

The Economy of Thailand grew 9.1 per cent year-on-year in the second quarter of 2010 as strong exports cushioned the blow from violent street protests that hit the key tourism sector, data showed on Monday.

The strong performance was seen as raising the odds of Thailand’s central bank increasing interest rates again when it meets later this week, following its first hike in almost two years in July. Gross domestic product (GDP) expanded for a third straight quarter compared with a year earlier, but at a slower pace than the breakneck growth of 12.0 per cent seen in January-March, a government agency said.

On a seasonally adjusted basis, GDP expanded 0.2 per cent in April-June from the previous quarter, after a 3.3 per cent rise in January-March, according to the National Economic and Social Development Board. The Thai economy has remained relatively resilient following two months of mass opposition protests, which paralysed parts of Bangkok and sparked violence that left 91 people dead, ending in a bloody army crackdown in May.

The better-than-expected second-quarter result was largely thanks to robust overseas demand for Thai-made goods, such as cars. The country is striving to become a regional hub for automobile production, with foreign makers such as Toyota operating factories in the kingdom. Exports soared 41.8 per cent in the second quarter of 2010 in dollar terms, on the back of a global economic recovery, the figures showed.

Household spending expanded by a robust 6.5 per cent as consumers splurged on cars and electrical goods. But growth in the hotel and restaurant industry slowed to just 0.2 per cent as the political unrest scared off foreign tourists.

Speculation is now growing that the Bank of Thailand may lift official borrowing costs for a second straight month when policymakers meet on Wednesday. In July the central bank raised interest rates for the first time since 2008 – by 25 basis points to 1.5 per cent – saying that the economic impact of the ‘Red Shirt’ anti-government protests had been relatively limited.

Shares in Singapore closed lower on Monday, with the benchmark Straits Times Index at 2,925.99, down 0.36 per cent, or 10.49 points.

About 1.34 billion shares exchanged hands.

Losers beat gainers 280 to 164.

Deutsche Bank, said on Monday it had launched an alternative stock trading platform known as a ‘dark pool’ in Hong Kong as part of its drive to grow in Asia.

A ‘dark pool’ exchange allows clients to trade financial instruments without their operations being displayed publicly, which advocates say saves costs and reduces price volatility.

Critics say the off-exchange trading systems reduce transparency, but they have gained significant ground in the United States and Europe and have spread to Asia as well.

Deutsche Bank said it would extend the operation, which it calls an Automated Trading System, to other Asian countries owing to growing demand for the service.

The bank’s operation aims ‘to give our clients the liquidity they need in today’s volatile markets,’ a statement quoted Deutsche Bank equity executive Mark Davis as saying.

‘Dark pools’ first emerged in the United States in 1990, and as their numbers grow, several companies are working to link platforms in various countries

Wilmar announced the acquisition of a Singapore sugar trading company, Windsor & Brook Trading Pte. Ltd. and Indonesian sugar refiner PT Jawamanis Rafinasi.

Olam will invest US$12 million equity in a Special Economic Zone development project in Gabon for a 60% stake in a Joint Venture with the local government.

Capitaland’s Ascott REIT has acquired S$1.39 billon portfolio of Asia and Europe properties from Ascott Ltd.

In the Philipines the market rallied past the 3,600 level today as investors continue to pick on the blue chips.

The bellwether Philippine Stock Exchange index today rallied by 0.54 percent or 19.76 points to finish at its highest level of 3,613.37 this year. The broader all-share index went up by 0.77 percent or 17.42 points to 2,279.48.

While the gains was mostly across the board during the early part of the session, three of the six counters, namely financials, industrial and mining and oil, took a breather and ended in the negative.

Most issues also finished lower. A total of 70 issues declined, 60 that advanced and the 38 stocks that were unchanged.

Overall, interest in the local equities remains vibrant as shown by the 1.39 billion shares worth P4.96 billion ($110.27 million) that changed hands.

“Share prices rallied (today) and closed at levels not seen since December of 2007. The local equities market relentlessly went up again as investors stayed bullish despite the technically overbought state of the market,” AB Capital Securities, Inc. said.

The brokerage noted that market participants have been ignoring technical indicators as projections of the macro economic and corporate earnings are been upgraded. Moreover, both investors and consumer confidence are reaching fresh highs.

Today’s rally was mostly brought about by blue chip buying. Investors bought relatively cheap industry leaders like heavyweight Philippine Long Distance Telephone Co., conglomerates Ayala Corp. and SM Investment Corp.; and property developer Ayala Land Inc.

The said issues have been lagging behind but not for long as investors are bullish on the local economy’s prospects. But in the coming sessions, the market’s momentum should slowly lose some steam to set it up for a modest technical correction,” AB Capital Securities said.

Year-to-date, the Philippine market went up by as much as 18.36 percent and the way stocks are moving appears the market is headed towards breaking the 20 percent-mark before it succumbs to selling pressure, according to Justino Calaycay of Accord Capital Equities Corp.

“A general rise in optimism across all demographics may be the underlying motive force supporting the rise in equities,” he said.

For those who are waiting for the equities to correct before positioning again, AB Capital Securities said their chance might be coming soon since indicators are already pointing to a correction.


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