ASEAN KEY DESTINATIONS
Asean Stock Watch- August 24
Buyers returned to the stock market Tuesday after deciding the pounding stocks have taken the past month made them too cheap to resist.
The Dow Jones industrial average jumped 322 points, its best day since Aug. 11, when it gained 423. The Dow dipped about 60 points shortly after an earthquake hit the East Coast at 1:51 p.m., but recovered within 20 minutes and soared even higher in the last two hours of trading.
James Paulsen, chief investment strategist at Wells Capital Management, said the beating stocks have taken since late July suggested investors were preparing for a recession. They questioned that bleak outlook Tuesday after a survey of manufacturing in the Southeast from the Federal Reserve Bank of Richmond, Va. pointed to a slowdown, not a recession. "And when people are preparing for a recession, slow growth is good right now."
The Dow, which tracks 30 huge U.S. companies including IBM Corp. and General Electric Co., closed with a gain of 3 percent at 11,176.76. Indexes that track smaller stocks did even better, a sign that investors were more willing to take on risk.
The S&P 500 index rose 38.53 points, or 3.4 percent, to 1,162.35. The Nasdaq composite, which tracks mainly technology companies, rose 100.68 points, or 4.3 percent, to 2,446.06. The Russell 2000 index of smaller U.S. companies gained even more, 4.9 percent.
When stocks plunged last Thursday, the reverse was true. The Dow fell 419 points but only 3.7 percent. The other three indexes fell more. The Russell 2000 lost the most, 5.9 percent.
As of Monday the Standard & Poor's 500 index had lost 16 percent over four weeks as investors worried that the U.S. might enter another recession and as Europe's debt crisis flared up again.
That meant the average company in the index was priced at just 11 times its expected earnings per share for 2011. "That's too low if you're not in a recession," Paulsen said. The historical average for the S&P's P/E ratio is 15. After Tuesday's gain, the S&P is down 14 percent since July 22 and 15 percent since it hit its high for year on April 29
Indonesian stocks rebounded on Tuesday amid optimism that the global economy will avoid recession following upbeat reports from Germany and China.
The Jakarta Composite Index gained 40.85 points, or 1.1 percent, to close at Rp 3,880.46. More than 6.51 billion shares, valued at Rp 4.89 trillion changed hands. Gainers beat decliners by 157 to 64. Foreign investors were net sellers of Rp 66 billion.
“Indonesian markets followed regional markets, which opened higher,” said Wisnu Karto, an analyst at eTrading Securities.
Global stocks rose as German and Chinese purchasing data suggested that manufacturing in the two nations was not slowing as badly as anticipated, Reuters reported. Wisnu added that the lack of positive news in Indonesia also set investors in a wait-and-see mode on Tuesday, ahead of next week’s holiday.
“Next week will be a week-long holiday for Idul Fitri, thus the lack of enthusiasm in the market,” Wisnu said, adding that the global market also awaits the Federal Reserve’s meeting on Friday, to see whether the Fed would take action to spur growth in the US economy.
Among sectors, consumer goods producers and banks were among the biggest gainers.
Bank Danamon, Indonesia’s fifth-largest lender, climbed 4 percent to Rp 5,200. The lender said on Monday that it aims to raise Rp 5 trillion in a rights offering to expand its lending to small and medium-sized enterprises.
Hero Supermarket jumped 6.3 percent to Rp 8,500.
London Sumatera Plantation, a crude palm oil producer affiliated with Indofood group, added 1 percent to Rp 2,425, after reporting on Tuesday that first-half profit more than doubled from a year earlier. Trimegah Securities maintained its ‘buy’ recommendation on the stock with target price at Rp 2,875.
“Despite the lower average selling price, London Sumatera managed to maintain its excellent first-quarter performances due to its higher CPO production in the second quarter,” the brokerage house said.
The rupiah gained 0.05 percent to trade at 8,535 against the dollar.
Share prices on Bursa Malaysia opened firmer Wednesday on continued bargain hunting, as investors took advantage of the recent sell-off, with sentiment also lifted by overnight gains on Wall Street.
In thin trade, the FTSE Bursa Malaysia KLCI (FBM KLCI) increased 3.64 points to 1,486.01 after 15 minutes of trading. It had opened 2.78 points higher at 1,485.15.
Key US equity indices rose between three per cent and 4.3 per cent primarily on expectations that the Federal Reserve chairman could be announcing fresh policy responses to stimulate the struggling US economy at a gathering of central bankers later this week, HwangDBS Vickers Research said.
This may provide a "temporary boost" to investment sentiment around the region today. On the chart, the benchmark FBM KLCI will probably climb towards its technical resistance level of 1,495 ahead, it added.
Bursa Malaysia's Finance Index jumped 29.72 points to 14,139.7, the Plantation Index rose 29.59 points to 7,319.53 and the Industrial Index climbed 2.2 points to 2,753.66.
The FBM Emas Index appreciated 23.35 points to 10,161.47, the FBM70 Index was up 18.89 points to 11,071.11 and the FBM Ace added 14.24 points to 3,811.98.
Advancers led decliners by 207 to 62 while 109 counters were unchanged and 1,101 others untraded.
A total of 85.543 million shares worth RM93.204 million were traded.
Sunway warrants was the most active counter, adding 28.5 sen to 59.5 sen, while Tanco perked 2.5 sen to 24.5 sen and Pan Malaysia edged up half a sen 10 sen.
For the heavyweights, Maybank jumped five sen to RM8.75, CIMB perked three sen to RM7.82, Sime Darby inched up one sen to RM8.81 and Tenaga Nasional climbed three sen to RM5.46.
Philippine share prices recovered on Tuesday amid expectations of a modest economic growth in the second quarter.
At the Philippine Stock Exchange, the composite index rose 1.96 percent, or 84.28 points to 4,375.39, while the broader all-share index rose by 0.75 percent, 22.45 points to 3,011.72.
Gainers however tracked losers, 67 to 78, while 39 counters were unchanged.
The mining and oil sector again posted the highest increase, rising 3.94 percent to 26,751.66.
Holding firms rose by 52.85 points to 3,403.51, while the industrial and property sectors added 92.45 and 15.32 points to 6,995.56 and 1,489.52, respectively. Financials inched up by 4.10 points to 987.
Jun Calaycay of Accord Capital Equities Corp. said a slight rally of the Dow overnight brought about the equity rebound across Asia. The Dow Jones Industrial increased by 37 points to 10,854.65.
Also helping fuel the PSEi rebound was news that the Philippines’ gross domestic product in the second quarter likely grew within market expectations, the analyst said.
The National Statistical Coordination Board will announce the official GDP figure on August 31. The National Economic and Development Authority and the Bangko Sentral ng Pilipinas expect GDP growth to hit over five percent in the second quarter.
Asian currencies, including the peso, advanced for a second day on Tuesday amid speculation policy makers in the region will continue to raise rates to fight inflation.
At the Philippine Dealing System, the local unit gained 12.50 centavos to the greenback to close at 42.325 from 42.450 the previous trading day.
The dollar-peso pair opened at 42.440 and moved to a high of 42.450 and to a low of 42.325.
Total trading volume eased to $718.24 million from $735.58 million the previous day.
The currency pair is expected to trade within the 42.200 to 43.100 range this week.
Singapore shares opened higher on Wednesday, with the benchmark Straits Times Index at 2,770.18 in early trade, up 0.18 percent, or 5.03 points.
Around 107.7 million shares exchanged hands.
Gainers beat losers 160 to 30.
Thai stocks opened down 0.68 points at the start of trade Wednesday morning.
The Stock Exchange of Thailand main index opened at 1,056.60 points, down 0.06 percent from Tuesday’s close. The trade value was 1.44 billion baht, with 267.74 shares traded.
The SET50 index opened at 732.87 points, down 0.96 points or 0.13 percent, with a total trade value of 1.01 billion baht.
The SET100 index fell 1.72 points, or 0.11 percent, to 1,600.90 points, with a total turnover of 1.16 billion baht.
The SETHD index went down 1.69 points, or 0.17 percent, to 1,011.09 points. The trade value was 292.04 million baht.
The MAI index rose 4.38 points, or 1.45 percent, to stand at 305.79 points, with total transaction value of 18.20 million baht.
The top five most active shares:
BANPU stood at 606.00 baht, down 6.00 baht (0.98 percent)
KBANK stood at 125.50 baht, down 0.50 baht (0.40 percent)
BBL stood at 153.00 baht, down 1.50 baht (0.97 percent)
CPF (XD) stood at 30.00 baht, unchanged
SCB stood at 117.00 baht, up 0.50 baht (0.43 percent)
Both stock indices fell this morning as many investors began selling shares to make a cash profit after several rising sessions.
On the HCM Stock Exchange, the VN-Index plunged 1.17 percent to close at 401.28 points, with losers outnumbering gainers by 143-78.
Market value increased slightly to nearly VND499.3 billion (US$24 million), with almost 30 million shares changing hands.
Blue chips tumbled. Only three of the 10 largest shares by market capitalisation rose – Eximbank (EIB) and Sacombank (STB), both by 0.7 percent; and dairy producer Vinamilk (VNM), up 0.9 percent.
Meanwhile, insurer Bao Viet Holdings (BVH) dropped 4.2 per cent, food producer Masan Group (MSN) closed down 3.5 percent and property developer Vincom (VIC) fell 1.9 per cent. Others decreased by less than 1 percent.
Sai Gon Securities Inc (SSI), with 2.74 million shares exchanged, was again the most active stock, closing down 0.5 per cent to VND19,000 ($0.91).
In Ha Noi, the HNX-Index lost 0.7 per cent to finish today at 69.43 points.
However, trading value in the capital exceeded that on the HCM City bourse, rising more than 55 percent to VND564.2 billion ($27.1 million) on a volume of 49.7 million shares.
Advancers outnumbered decliners by 181-73.
Securities shares Kim Long (KLS) and VNDirect (VND) remained the most heavily traded stocks in Hanoi. The two codes saw a total 15.9 million shares changing hands. VND rose 5.6 per cent, while KLS rose 1.7 percent.
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