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ASEAN STOCK WATCH Asean Affairs   3 August 2012

ASEAN Markets to Open Lower

By Shayne Heffernan Ph.D.

Draghi said the ECB would gear up to buy Italian and Spanish bonds on the open market but would only act after euro zone governments have activated bailout funds to do the same, disappointing traders after his pledge last week to do "whatever it takes" to save the euro left many thinking action was imminent.

Markets rallied late last week in part on hopes for stimulus from the Federal Reserve but mostly as expectations grew the ECB would take action to protect the euro. Friday's jobs report could give a stronger indication whether the Fed, which has a freer hand than the ECB, will act shortly.
Data showed the number of Americans filing new claims for jobless benefits rose last week and manufacturers suffered an unexpected drop in orders in June, suggesting the economy is struggling to break out of a soft patch.


Kawasan Industri Jababeka, one of the country’s biggest industrial estate developers, reported a fourfold increase in first-half net income on rising investment.

Net income in the January-June period climbed to Rp 205.8 billion ($22 million) from Rp 51 billion a year before, the company said in a statement published in Investor Daily on Wednesday.

Revenue at Jababeka, which manages 3,274 hectares of land, almost doubled to Rp 730 billion from Rp 369 billion.

Jababeka serves industrial, residential, commercial, medical and entertainment properties, with industrial developments composing 65 percent of its land bank, which is located east of Jakarta. Among the company’s clients is automotive distributor Astra International.

“First-half 2012 top-line revenue surged backed by robust land sales of Rp 534 billion, jumping 673 percent year-on- year,” Trimegah Securities analyst Richardo Putra Waluyo said in a note to clients on Wednesday.

Industrial estate operators like Jababeka and Bekasi Fajar Industrial Estate, as well as Sinarmas Land, a property company, have benefited as more foreign companies seek to operate in Indonesia.

“Foreign direct investment in the secondary sector surged by 68 percent in the first half of 2012 compared to the same time last year,” a DBS Group research report stated on Friday. “The improvement was broad-based across different industries including food, chemical and pharmaceuticals, and motor vehicles.”

Foreign direct investment rose 30 percent to Rp 56.1 trillion in the second quarter from the same period a year earlier, the Investment Coordinating Board (BKPM) announced on Wednesday. Leading the way were the mining and pharmaceutical sectors, which each received $1 billion in new investment.

Shares of Jababeka rose 4.4 percent to Rp 191 on Tuesday on the Indonesian Stock Exchange, some distance from the high of Rp 245 they reached in May. Shares of Bekasi Fajar closed unchanged at Rp 610.

The company operates Jababeka City, a 5,600-hectare independent city in Cikarang, Bekasi, that has more than a million residents, 24 malls and two power plants.


The export data for Thailand turned south (again) in June, killing any hope for an export revival in the first half of 2012. The US dollar value of overseas shipments in June contracted by 4.2% from a year earlier, and if we exclude non-value adding gold trade, the contraction worsened to 5.5%.

Many economists had been hoping that May's upside surprise of 9.1% export growth (excluding gold) would be a sign of an export revival. And some officials continue to express optimism about the second half of the year, hoping for record-breaking growth rates in the fourth quarter (totally meaningless given the very low post-flood base of a year earlier) to bring full-year growth back up above 10%. We deem it unlikely.

For the first half of the year, exports without gold contracted 1.3% overall, while Asean was the only destination with which Thailand recorded positive export growth with every month, bringing the six-month growth rate at 10%. The major drag, to no one's surprise, was exports to European Union, off 12.7% over the first six months.

Almost every indicator points to the gloomy outlook for Thai exports persisting. The signs include slowdowns in major trade partners' economies _ in China, the US, Japan and debt-incapacitated Europe _ to contractions of similar export-oriented economies in Asia such as Taiwan and Singapore. It would be difficult to imagine that Thailand alone could be more resilient in escaping the global slowdown.


The FBM KLCI index gained 0.98 points or 0.06% on Thursday. The Finance Index fell 0.21% to 14681.07 points, the Properties Index up 0.08% to 1060.47 points and the Plantation Index down 0.27% to 8760.28 points. The market traded within a range of 5.00 points between an intra-day high of 1635.43 and a low of 1630.43 during the session.

Actively traded stocks include PATIMAS, INIX, TMS, INGENS-WA, IRIS, FGV-CC, PERISAI, INGENS, GPRO and IHH. Trading volume decreased to 1175.80 mil shares worth RM1647.68 mil as compared to Wednesday’s 1354.08 mil shares worth RM1863.55 mil.

Leading Movers were TENAGA (+20 sen to RM6.99), PETGAS (+70 sen to RM19.24), GENM (+9 sen to RM3.43), MAXIS (+4 sen to RM6.50) and AXIATA (+1 sen to RM5.90). Lagging Movers were GENTING (-20 sen to RM9.12), IOICORP (-6 sen to RM5.26), PETCHEM (-6 sen to RM6.55), YTL (-2 sen to RM1.80) and HLBANK (-14 sen to RM13.54). Market breadth was negative with 303 gainers as compared to 465 losers.


Tycoon Andrew Tan-led Alliance Global Group Inc. is upbeat on its pioneering gaming complex and all other core businesses, unfazed by the decline in tourist arrivals from China and the recent softening of the Macau gaming industry.
“I think all our (business) segments remained strong. This year, we should be OK especially as we’re going to an election year (2013),” AGI president Kingson Sian said in an interview with Inquirer on Thursday, when asked about how the company fared in the first semester.
Outside of the property businesses, Sian said prospects for AGI’s consumer segments, such as its beverage and food businesses, remained bright.
AGI’s food and beverage arm Emperador Distillers produces Emperador, Generoso and Emperador Light brandies and a line of flavored alcoholic beverages called The Bar. Golden Arches Development Corp. operates the quick service restaurant business under the McDonald’s brand.
Asked whether the group was worried about the impact on its gaming business of the slowdown in tourist arrivals from China, Sian said: “There will be an impact because it’s a sizable market, although they’re not the largest. We’re hopeful it will be resolved over time.”
Tourist arrivals from China were seen slowing down due to the Chinese government’s advisory on travels to the Philippines.
The advisory, issued by China in May at the height of the Scarborough shoal dispute, discourages group travels to the Philippines.
“There are other markets and the other markets continue to be strong like Korea. We’re developing new markets and the overall direction of the business is good,” Sian said.
Asked whether the group was worried about the reported softening of the gaming market in Macau, Sian said Macau had grown so rapidly such that it was not expected to climb in a perpetual manner. “It has to pause sometimes. Nevertheless, it remains to be the largest in the world. From nothing, Macau is now the largest (gaming market) and Singapore is already the second-largest.”

Yesterday in Asia

Tokyo was 0.13 percent higher, adding 11.33 points to 8,653.18 and Sydney added 0.16 percent, or 6.7 points, to 4,269.5.
Hong Kong shed 0.66 percent, or 130.18 points, to 19,690.20 and Shanghai fell 0.57 percent, or 12.18 points, to 2.111.18 while Seoul closed 0.56 percent, or 10.53 points, lower at 1,869.40.
 – Singapore closed down 0.49 percent, or 14.89 points, at 3,036.19.
Oversea-Chinese Banking Corp. shed 1.46 percent to Sg$9.44 and Sembcorp Industries fell 0.94 percent to Sg$5.28.
– Wellington closed 0.95 percent, or 33.46 points, higher at 3,564.11.
Fletcher Building rose 2.2 percent to NZ$6.19 and Telecom added 1.7 percent to NZ$2.70.
– Manila closed 0.10 percent lower, giving up 5.32 points to 5,293.40.
Ayala Land dropped 0.55 percent to 21.95 pesos, Alliance Global ended 0.08 percent down at 11.30 pesos, while SM Investments lost 0.50 percent to 752.50 pesos.
– Kuala Lumpur closed flat, edging up 0.98 points to 1,633.45.
Tenaga Nasional was up three percent at 6.99 ringgit while Maxis gained 0.6 percent to 6.50 ringgit. Bumi Armada ended down 3.1 percent to close at 3.77 ringgit.
– Jakarta fell 0.90 percent, or 37.35 points, to 4,093.11.
– Mumbai slid 0.19 percent or 33.02 points to 17,224.36.
SBI fell 0.89 percent to 2,014.65 rupees while leading vehicle maker Tata Motors slid 1.8 percent to 223.3 rupees.
– Bangkok was closed for a public holiday while Taipei was closed owing to a typhoon.


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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AseanAffairs   04 January 2011
By David Swartzentruber      

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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