ASEAN KEY DESTINATIONS
Asean Stock Watch- August 4
The Dow Jones Industrial Average fell 265.87 points to 11,866.62, extending its losing streak to eight days, the longest since October 2008.
Economic reports showing consumers cut their spending in June for the first time in almost two years and incomes increasing by the smallest since September added to signs that economic recovery in the world’s biggest economy had stalled.
The benchmark stock index fell for a second day on Wednesday on concern that global economic growth would slow following a series of disappointing economic reports from the United States.
Property and finance-related shares dropped over worries that a central bank plan to curb lending on automobile and home purchases would reduce profit.
The Jakarta Composite Index lost 41.34 points, or 1 percent, to 4,136.51, extending Tuesday’s 0.4 percent decline.
More than 5.73 billion shares valued up to Rp 5.7 trillion ($670 million) changed hands. Decliners beat gainers by 187 to 60 and foreign investors sold Rp 539 billion more in shares than they purchased.
A June report released on Tuesday showed that US consumer spending dropped, and that followed a July survey that suggested contraction in manufacturing in the world’s biggest economy.
Those economic indicators overshadowed the positive outcome of a legislative deal that allowed the United States to pay its debts and avoid a default.
“The market was still affected by the US manufacturing data, which was disappointing,” said Muhammad Alfatih, an analyst with Samuel Sekuritas.
Although Moody’s Investor Service kept its US credit rating at triple-A following the debt deal on Tuesday, the negative outlook on the economy sent a negative message to markets worldwide, he said.
Property developers and building-materials makers were among the biggest decliners, as Bank Indonesia was considering to tighten down-payment requirements for property and automotive financing.
Bursa Malaysia extended yesterday's losses on Wednesday in line with weaker regional bourses as US stocks plunged overnight on poor economic data, dealers said.
They said the faltering US economy, despite avoiding a debt default, would continue to affect regional markets on concerns of the impact of a slowdown in global exports and manufacturing activities.
The benchmark FBM KLCI lost 9.75 points to 1,545.10. It had opened 5.36 points lower at 1,549.49.
The Finance Index dipped 24.021 points to 14,693.27, the Industrial Index fell 21.65 points to 2,814.13 and the Plantation Index fell 34.73 points to 7,735.37.
The FBM Emas Index fell 62.761 points to 10,665.68, the FBM Ace Index rose 22.57 points to 4,192.29 and the FBM Mid 70 Index dipped 65.909 points to 11,826.40.
Losers outnumbered gainers by 514 to 259 while 280 counters were unchanged, 448 untraded and 34 others suspended.
Turnover increased to 1.165 billion shares worth RM1.751 billion from 903.522 million shares worth RM1.437 billion yesterday.
Among active stocks, Sanichi Technology gained two sen to 9.5 sen, The Media Shoppe rose one sen to 8.5 sen, Ingenuity Solutions was unchanged at 4.5 sen and Ramunia Holdings rose five sen to 49.5 sen.
Among heavyweignts, Maybank lost one sen to RM8.81, CIMB slipped two sen to RM8.37, Petronas Chemicals eased two sen to RM6.79 and Sime Darby fell seven sen to RM9.07.
Volume on the Main Market increased to 749.015 million shares worth RM1.678 billion from 592.113 million shares worth RM1.383 billion yesterday.
Turnover on the ACE Market increased to 314.821 million shares valued at RM54.855 million from 210.905 million shares valued at RM35.446 billion yesterday.
Warrants decreased to 89.825 million units worth RM13.872 million from 90.704 million units worth RM15.481 million yesterday.
Consumer products accounted for 31.5 million shares traded on the Main Market, industrial products 136.3 million, construction 49.8 million, trade and services 234.9 million, technology 10.8 million, infrastructure 21.3 million, finance 125.8 million, hotels 925,300, properties 76.7 million, plantations 46.1 million, mining 32,000, REITs 7.3 million and closed/fund 132,500.
Philippine share prices slid further on Wednesday amid growing signs that the US economy was stalling.
At the Philippine Stock Exchange, the composite index fell 52.78 points, or 1.16 percent to 4,488.45, while the broader all-shares index dropped to 39.91 points, or 1.27 percent to 3,102.43.
Decliners beat advancers, 126 to 33, while 33 stocks were unchanged. A total of 5.57 billion stocks worth P5.34 billion changed hands.
“For a time the PSEi was successful to move higher despite the woes of US markets, even reaching a new record high. However, the piling problems of the US finally became too much,” said AB Capital Securities Inc.
“Sentiments moved with Wall Street’s sharp overnight decline as several gauged for possibility of sell-offs from foreign institutional players,” said Freya Natividad, investment analyst at 2TradeAsia.com.
At the Philippine Dealing System, the local unit retreated for the second consecutive day and shed 8 centavos to close at 42.230 against the US dollar on Wednesday from 42.15 the previous trading day.
An analyst from the Metropolitan Bank and Trust Co. said bearish sentiment for the peso continued as majors reestablished new lows during Asia and the region still well on the bid.
“Aggressive buying was seen throughout the afternoon session and buying intensified as the majors continued to falter against the greenback. Weakness of the peso stalled at 42.20 since the central bank was seen selling at 42.21 to 42.22 to stop the pair’s volatility. The dollar-peso pair was suddenly heavy, minutes before the close on profit taking and relief rallies in the euro and Australian dollar. The pair was last given at 42.23,” the analyst said.
The currency pair opened at 42.30 and moved to a high of 42.410 and a low of 42.210, with total trading volume surging to $1.225 billion from $785.25 million the previous trading day.
Marc Bautista, head of Metrobank research, warned that a potential US credit downgrade by the major ratings agencies still remain.
“It should be recalled that what was really being averted right now is the issue of a technical default as it is widely believed that the US will not really renege on its Treasury securities. Now that that issue has become moot with the said compromise, what’s left to be seen is the effect that belt-tightening will have on the US economy given the need for deficit-cutting required in the agreement,” Bautista said.
He said the Philippines has benefited from market uncertainty through portfolio flows that have come in, pushing both the peso and the stock markets up.
“Certainly, other currencies have also benefited from perceived US dollar weakness, as evinced by the appreciation of both the yen and the euro and this may likely persist even after the US debt ceiling increase gets formally enacted into law,” he said.
Until the threat of a US credit downgrade is removed, markets will remain in a wait-and-see attitude, with continued weakness in the US dollar, he said, adding that market players will continue to diversify their holdings and look for alternative placements elsewhere.
“With no one country having the depth and reach of the US, that basically means that all sorts of economies with current accounts surpluses should be fair game, including the Philippines.
Thus, it is likely that the peso may strengthen beyond 42.50 per dollar, since it is already hovering at 42 this early in the year. At this rate, a yearend value of 41 pesos per dollar cannot be discounted as we are seeing an acceleration of peso appreciation,” he said.
Singapore shares opened lower on Thursday, with the benchmark Straits Times Index at 3,127.01 in early trade, down 0.11 percent, or 3.33 points.
Around 34.2 million shares exchanged hands.
The Stock Exchange of Thailand main index closed down 6.15 points or 0.54 percent to close at 1,133.46 points at the end of trading session on Wednesday. The trade value was 38.55 billion baht, with 5.95 billion shares traded.
The SET50 index ended at 791.38 points, down 6.12 points or 0.77 percent, with a total trade value of 27.02 billion baht.
The SET100 index fell 12.35 points or 0.71 percent to stand at 1,726.13 points, with a total turnover of 32.82 billion baht.
The SETHD index went down 6.51 points or 0.60 percent to stand at 1,082.91 points, with total trade value of 9.71 billion baht.
The MAI index went up 1.54 points or 0.49 percent to close at 318.24 points, with total transaction value of 773.94 million baht.
Top five most active values were as follows;
PTT closed at 343.00 baht, down 5.00 baht (1.44 percent)
BBL closed at 168.00 baht, down 4.00 baht (2.33 percent)
KTB closed at 20.10 baht, down 0.40 baht (1.95 percent)
KBANK closed at 136.50 baht, down 3.00 baht (2.15 percent)
ADVANC closed at 119.00 baht, up 3.50 baht (3.03 percent)
The VN-Index on the HCM Stock Exchange retreated again, marking three consecutive sessions this week, and concluding at nearly 1.3 percent to 391.47 points.
Decliners outnumbered advancers by 162-64.
The value of trades slid 26.3 percent to VND443.3 billion (US$21.5 million) on a volume of 26.5 million shares.
Bao Viet Holdings (BVH) and PetroVietnam Finance (PVF), two of the 10 leading shares in terms of capitalisation, bottomed out for the second session during the week.
Meanwhile, Vietinbank (CTG), Phu My Fertilisers (DPM), food producer Masan (MSN) and real estate developers Hoang Anh Gia Lai (HAG) and Vincom (VIC) lost between 0.3-2.8 percent.
Only software giant FPT (FPT) and Sacombank (STB) managed gains of 1.9 and 2.7 percent respectively.
STB was the most active code on the southern bourse with over 4.7 million shares exchanged.
On the Hanoi Stock Exchange, the HNX-Index got back in the green of 67.45 points, a 0.15-percent increase.
The number of gainers nearly equalled that of losers.
Trading value, however, dived 28.4 percent to VND195.4 billion ($9.5 million). Trading volume also fell to 20.8 million shares.
Kim Long Securities Co (KLS) claimed the highest trading volume in Ha Noi by nearly 2.9 million shares changing hands.
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