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ASEAN STOCK WATCH 25  August  2010

ASEAN Markets May Fall After Bad USA Housing Data

Shayne Heffernan

ASEAN markets have proven resiliant to the falling global markets over the past weeks with many setting all time highs, and showing continued growth, today however the pressure of yet another fall on Wall St may offer bargain hunters an excellant opportunity to pick up some shares at a discount.

Wall St is sitting at critical levels at the close and this may prompt speculative selling in ASEAN today.

Dow Jones 10,040.45 -133.96 (-1.32%)

S&P 500 1,051.87 -15.49 (-1.45%)

Nasdaq 2,123.76 -35.87 (-1.66%)

Singapore shares rose 0.61 percent on Tuesday, outperforming regional bourses like Hong Kong, as the benchmark index got a boost from Southeast Asia’s largest telcom firm Singapore Telecommunications (STEL).

By the midday break the Straits Times Index (STI) .FTSTI was up 17.91 points at 2,943.90. More than 129.3 million shares had changed hands.

SingTel’s shares rose 2 percent to S$3.00 as investors shrugged off previous concerns that a potential weakness in the Australian dollar resulting from Australia’s political stalemate will hit its bottom line.

SingTel’s Australian subsidiary, SingTel Optus, accounted for about 19 percent of its bottom line for the fiscal year ended March 31, although it made up 64 percent of its revenue.

Shipbuilders like Yangzijiang Shipbuilding (YAZG) and Cosco Corporation (COSC) outperformed the broader index, as Cosco secured new contracts and Yangzijiang said it would buy a site in China that can be used to expand its yard.

Cosco Pacific Ltd, Asia’s third- largest container-terminal operator, said profit in the first-half rose 82 per cent on recovering world trade and the sale of a stake in a logistics venture.

Net income rose to US$189.9 million (US$1 = RM3.14), or 7.96 cents a share, from US$104.5 million, or 4.66 cents, a year earlier, the terminal operator said in a statement to Hong Kong’s stock exchange yesterday.

The firm made an US$84.7 million gain from selling its stake in Cosco Logistics Co to its parent.

Shares of Yangzijiang rose as much as 2.6 percent on Tuesday to S$1.55, while Cosco rose 1.9 percent to S$1.58.

Kuala Lumpur Bursa malaysia KLCI reached a fresh 30-month high yesterday – after rising for the seventh consecutive day for a cumulative gain of 53.8-point or 4%.

There were 206 counters up, 585 down and 241 remained unchanged with total market volume of 894.4 million shares.

Among the top three gainers were LAYHONG that added 53 sen to RM1.72, FIMACOR gained 38 sen to RM4.83 and GENTING climbed by 18 sen to RM8.90.

For the heavyweights, Maybank shed 2 sen to RM8.12, CIMB shed 1 sen at RM7.9 and Sime Darby gained 4 sen to RM7.87.

Bank Negara’s recent foreign exchange (forex) liberalisation measures coupled with China allowing yuan-ringgit trade will gradually reduce the dependency on the US dollar and enhance trade financing efficiency, experts said.

AmBank Group treasury and markets managing director Teng Chean Choy said as China and Asean were now the country’s largest and second largest trading partners, the central bank’s move should prompt the pricing of exports and imports in Asian currencies, including the ringgit, and over time reduce dependence on the US dollar.

While analysts approve of AirAsia Bhd’s move to pay dividends, they expect the dividend payout will not be significant yet.

The budget carrier, which has been listed since 2004, do not have a dividend policy. However, the group is now considering to pay dividend to its shareholders.

The Jakarta Composite Index opened lower and set yet another new high of 3,145.11 in early afternoon trading before a sell-off in the final two hours.

The Jakarta Composite Index only fell 13.79 points, or 0.4 percent, to 3,114.94. About 5.5 billion shares worth Rp 4 trillion ($448.4 million) changed hands.

Decliners outnumbered gainers 116 to 77.

Among decliners were state-owned gold miner Aneka Tambang, which dropped 2.4 percent, and Astra International, the nation’s largest car retailer, which fell 1.5 percent.

Bank Bukopin shares gained the most in four months after Bisnis Indonesia reported that state social security provider Jaminan Sosial Tenaga Kerja (Jamsostek) may buy more than 30 percent of the lender, higher than initially targeted.

Bukopin surged 12.5 percent to close at Rp 720.

Bank Rakyat Indonesia, which recently announced its intention to take a majority stake in Bukopin, advanced 2.6 percent to close at Rp 9,800 per share.

Indofood Sukses Makmur, the country’s biggest maker of noodles and flour, advanced 2.4 percent to close at Rp 4,325.

Meanwhile, the rupiah slipped 0.7 percent to 8,986 per US dollar as of the local market’s close.

Other Asian currencies declined, led by the Philippine peso and South Korean won, on speculation that faltering economic growth in the United States and Europe would crimp demand for regional exports and slow down local expansion.

“Although Asia’s growth is strong, it’s economies are largely driven by export and a slowdown of economies in export destinations is negative for the region,” said Minoru Shioiri, chief manager of foreign-exchange trading at Tokyo-based Mitsubishi UFJ Morgan Stanley Securities, a unit of Japan’s largest financial group by market value.

“The environment is not encouraging investors to take risks.”

Still, HSBC Holdings in a report said investors should buy the rupiah, Malaysia’s ringgit and Philippine peso as relatively high yields attract inflows into the nations’ bond markets.

The three currencies may strengthen by 2 percent to 5.5 percent by the end of the year, according to the research report published this week.

Rupiah-denominated bonds have returned 17.3 percent this year, according to HSBC.

Overseas holdings of government bonds were Rp 177.2 trillion as of Aug. 16, an increase of 64 percent from the end of 2009, according to the Finance Ministry’s Web site.

The Stock Exchange of Thailand (SET) composite index on Tuesday lost 4.33 points or 0.48 per cent to close at 890.45 points. The market value was 38.40 billion baht, with 13.13 billion shares traded.

Top five most active values were as follows;

TMB closed at 2.30 baht, up by 0.08 baht or 3.60 per cent.

JAS closed at 1.74 baht, up by 0.19 baht or 12.26 per cent.

PTT closed at 258.00 baht, down by 6.00 baht or 2.27 per cent.

PTTEP closed at 143.50 baht, down by 4.50 baht or 3.04 per cent.

CK closed at 7.80 baht, down by 0.05 baht or 0.64 per cent.

Top energy firm PTT (PTT) gained 1.1 percent and rose to 269 baht amid hopes the national environment board would announce the list of hazardous projects later in the day, which may enable several key industrial projects, including PTT’s suspended sixth gas separation plant, to start up later this year, analysts said.

The country’s largest olefins maker, PTT Chemical PTTC.BK, was up 0.9 percent at 107.5 baht on expectations its ethylene product volume would rise along with more feedstock from its parent PTT’s sixth gas separation plant, they said. Other operators of halted projects were also expected to benefit from the approval of the list, including industrial conglomerate Siam Cement SCC, which was up 2.2 percent at 274 baht.

TUF The world’s largest canned tuna maker rose 7.5 percent to 61.25 baht, at one point climbing to an all-time high of 61.5 baht, as its plan to buy French-based MW Brands Holding SAS boosted earnings outlook and share price target.


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