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ASEAN STOCK WATCH 27  August  2010

ASEAN Markets Hit New Highs

Shayne Heffernan

ASEAN markets continue their amazing run forward, and even though we may be due for a small retraction the base has been built for ASEAN to continue setting new highs.

In Malaysia the Index rose 0.8 percent to its highest since Feb. 21, 2008

Supermax Corp Bhd recorded a 77.8% jump in net profit to RM45.9mil for the second quarter ended June 30 versus RM25.8mil in the same quarter last year due to strong global demand for rubber gloves, higher selling prices and cost savings.

Revenue rose 24.6% to RM234.8mil for the period as compared with RM188.5mil last year.

For the six months ended June 30 net profit surged 114% to RM97.3mil as against RM45.5mil in the same period of 2009.

Revenue rose 19.6% to RM455.5mil in the first six months of the year versus RM380.9mil in the previous year.

Supermax declared a dividend of 2.5 sen per share for the second quarter.

Fraser and Neave Holdings Bhd (F&N) has announced that it is proposing to acquire 39.6 million shares or a 23.08% stake in Cocoaland Holdings Bhd for RM54.6mil or RM1.38 per share cash.

F&N chief executive officer Datuk Ng Jui Sia said in a statement that the stake in Cocoaland – the group’s first in a food manufacturer – provides it with a strategic and synergistic foothold to advance its aspirations to create a regional, world-class food and beverage enterprise.

“We are excited with the creation of a new food platform via this agreement and will work in tandem with our partners to leverage our various marketing and distribution strengths and capabilities to mutually develop our equity in the growing and exciting food and beverage sector.

“Our investments in soft drinks and dairies to-date have given us a solid platform to realise our regional ambitions, and the combination of the capabilities within the Cocoaland Group will complement and significantly boost our food and beverage credentials and maximise shareholder value,” he added.

Both F&N and Cocoaland shares have been suspended today pending the announcement.

Cocoaland added 11 sen to RM2.87 while F&N fell eight sen to RM14.46 yesterday.

Listed plantation companies which released their quarterly results yesterday generally posted stronger performances buoyed by higher average selling prices of crude palm oil (CPO) and palm kernel (PK) as well as higher sales volume.

Genting Bhd unit Genting Plantations Bhd saw net profit increasing to RM71.4mil for its second quarter ended June 30 from RM59mil in the previous quarter.

Revenue for the quarter under review firmed RM231.2mil on the back of RM95.6mil in pre-tax profit.

The group attributed the stronger performance to higher prices of palm products, an increase in fresh fruit bunches (FFB) production and gain on dilution of shareholdings in a subsidiary.

The Stock Exchange of Thailand (SET) composite index went up 1.59 points or 0.18% to close at 886.10 points at the end of trading session on Thursday afternoon. The trade value was 32.40 billion baht.

Top five most active values were as follows;

TMB closed at 2.42 baht, up 0.04 baht (1.68%)

JAS closed at 1.54 baht, down 0.10 baht (6.10%)

ITD closed at 3.42 baht, up 0.22 baht (6.88%)

PTT closed at 258.00 baht, up 1.00 baht (0.39%)

THCOM closed at 8.45 baht, up 0.55 baht (6.96%)

The increase in the repurchasing rate by another 0.25 percentage points would not have much impact on the export sector, Finance Minister Korn Chatikavanij said on Thursday afternoon.

The Bank of Thailand’s Monetary Policy Committee yesterday decided to increase the key policy rate from 1.50 per cent to 1.75 per cent.

Mr Korn admitted that the increase in the key policy rate would result in the baht’s further appreciation, but said the Thai currency’s current value is in line with foreign currencies of other Asian countries.

The minister was confident that a stronger baht would not hurt the trade competitiveness of Thai manufacturers.

The Thailand Exhibition and Convention Bureau (TCEB) has launched its Believe in Thailand campaign to rebuild confidence in the country as a business events destination.

“With the launch of this new campaign, we want to inform potential business travellers to Thailand and reassure all MICE players, organisations and businesses,” said Akapol Sorasuchart, president, TCEB. “Bangkok and Thailand are back to normal. There has never been a better time to hold a business event in Thailand.”

TCEB has also hosted a number of familiarisation trips since the end of the domestic conflict in May in an effort to show meeting and event planners first-hand the resumption of business.

“The objective of this road show and global campaign is to reignite the interest and confidence in Thailand,” added Sorasuchart. “Thailand is a country that has developed a thriving business travel industry through the superior service, professionalism and friendliness of the Thai people.

“This has not changed and we are positive that Thailand will continue to be an attractive destination for MICE events.” Phuket is the first destination to show signs of recovery, hosting a steady stream of events during the past three months.

However, the continued State of Emergency has kept in place automatic travel advisory warnings in several countries, meaning many delegations cannot be covered by insurance when travelling to Thailand, despite attractive rates, financial incentives and their willingness to do so.

Philippine Stock Exchange index gained 41.58 points, or 1.17 percent, to 3,595.58. Yesterday’s trading had been extended due to a glitch in the system that briefly interrupted the session.

The market closed at 12:40 p.m. instead of 12:10 p.m. Trading was halted at 9:44 a.m. and resumed at 10:33 a.m.

Trading volume was slightly lower at P3.8 billion compared to the previous day’s average of over P4 billion partly due to the interruption.

There were 101 advancers against 40 decliners, while 28 stocks were unchanged.

The upbeat local sentiment was also supported by a slim gain eked out by US stocks. The Dow Jones Industrial Index was up by 19.61 points, or 0.2 percent.

The mining/oil, property, holding firms and industrial counters benefited most from the run-up.

Investors snapped up shares of DMCI Holdings Inc., Universal Robina Corp., Alliance Global Group Inc., Philex Mining Corp., Energy Development Corp., Megaworld Corp., Metropolitan Bank & Trust Co., Ayala Land Inc., Semirara Mining Corp., Filinvest Land Inc., First Philippine Holdings Corp., Aboitiz Power Corp., Bank of the Philippine Islands

The JCI rose 6.2 points, or 0.2 percent, to close at 3,145.14. Volume was heavy, with 8.43 billion shares worth Rp 5.31 trillion ($589.4 million) changing hands. Gainers outnumbered decliners 114 to 81.

“While the global economic recovery is very slow, Indonesian growth has been robust and valuations are cheaper at around 13 times,” said one Jakarta-based analyst. “So there is strong foreign as well as domestic demand for Indonesian stocks.”

However, momentum in recent days has faded, and some analysts warned of profit-taking in the near term, especially in light of uncertainty over the global economic recovery.

“We should keep our eyes on the [market], because investors might want to do profit-taking simultaneously, which could lead to a big decline,” said Saiful Adrian, an analyst at Ciptadana Securities.

Indofood Sukses Makmur, the country’s biggest instant noodle maker, advanced 3.5 percent, its steepest gain since July.

State-owned coal producer Tambang Batubara Bukit Asam surged 7.5 percent. Bukit Asam allocated Rp 3.9 trillion to buy two coal mines in Kalimantan, Investor Daily reported on Thursday, citing its corporate secretary Achmad Sudarto. The company expects to complete the purchases this year, the news report said.

On Wednesday, Adani Global, the Indonesian unit of Indian conglomerate Adani Group, announced it would invest $1.6 billion in a railway project for a coal mine site in South Sumatra in cooperation with Bukit Asam.

Coal miner Bumi Resources, a unit of the Bakrie group, declined 2.7 percent.

State-owned construction company Wijaya Karya gained 1.7 percent after reporting that its first-half net income rose 51 percent from a year earlier to Rp 140.76 billion.

The rupiah has traded within a 0.2 percent range all of this week on speculation the central bank will hold the currency at current levels to support exporters and contain inflation. Bank Indonesia is “comfortable” with the rupiah’s present level as it is acceptable to exporters who compete on price terms in global markets, said Muhammad Fauzi Halim, a foreign-exchange trader at Bank Resona Perdania.

“Bank Indonesia thinks it is very safe for the rupiah to trade below 9,000,” he said.

The rupiah was at 8,990 per dollar as of the stock market’s close, compared with 8,983 on Wednesday. The currency reached 8,905 on Aug. 3, its strongest level since June 2007.

Benchmark government bonds fell, pushing yields up by the most in a week, before the government is set to report inflation data on Wednesday. According to economists in a Bloomberg survey, consumer prices rose 6.7 percent in August from a year earlier, after climbing to 6.2 percent in July.

Bond “investors are waiting for the inflation figures,” said Dino Nunuhitu, vice president at Indo Premier Securities in Jakarta.


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