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ASEAN STOCK WATCH Asean Affairs   16  December  2010

Asean Markets to Open Lower but May Rally

Shayne Heffernan

ASEAN Markets will be under pressure in the morning session but may rally in the afternoon.

PTT, IRPC and Sembcorp Stand out as buys.

Wall Street was mixed, with the Dow Jones rising on signs that the US manufacturing industry is growing and inflation remains under control, but gains remained capped amid concerns over the euro-zone’s debt problems.

In early afternoon trade, the Dow Jones Industrial Average was up 17.37 points, or 0.15 per cent, at 11,493.91. Caterpillar rose 2.2 per cent to lead the index. The broader Standard & Poor’s 500 index was 2.63 points lower, however, by 0.21 or 0.1 per cent, at 1238.96. The Nasdaq composite index was down 6.47, or 0.25 per cent, at 2,621.25.

The Federal Reserve said US factory output rose for the fifth straight month in November. A separate report showed that consumer prices hardly moved last month. The Labor Department’s Consumer Price Index rose just 0.1 per cent, slightly below what economists expected.

European stockmarkets closed lower, after a warning by Moody’s that it could downgrade Spain’s credit rating weighed on the euro and dampened sentiment, despite Irish parliamentary approval of an EU-IMF rescue.

London’s FTSE 100 index shed 0.2 per cent to finish at 5,882.18 points, in Paris the CAC 40 fell 0.58 per cent to 3,880.19 while in Frankfurt the DAX lost 0.16 per cent to end the day at 7,016.37 points.

Elsewhere in Europe, Milan lost 1.44 per cent, Madrid 1.50 per cent, Amstersdam 0.29 per cent. Swiss stocks bucked the trend and rose 0.22 per cent.

Moody’s announced it could cut Spain’s credit rating again because of heavy debt refinancing needs for the year ahead, banking problems and high-spending regions.


Crude oil prices rose on Wednesday after the Energy Department’s Energy Information Administration released its weekly report on the US petroleum supplies.

In late afternoon trading, benchmark oil for January delivery was 26 cents higher at $US88.54 a barrel on the New York Mercantile Exchange.

The government said commercial crude supplies fell by 9.9 million barrels to 346 million barrels for the week ending Dec 10. Oil supplies are still more than four per cent higher than they were a year ago. In London, Brent crude rose 66 cents to $91.87 a barrel on the ICE Futures exchange.

February gold fell $18.10 to settle at $US1386.20 per troy ounce on the Comex division of the NY Mercantile Exchange. March silver fell 53.5 cents to $US29.253.

Base metals mostly eased on Wednesday with a stronger US dollar pushing copper back from the record high reached the previous session, although the red metal remained underpinned by strong demand prospects.

Benchmark three-month copper on the London Metal Exchange closed at $9,095 a tonne from $9,165 at the close on Tuesday. The metal used in power and construction earlier touched $9,245.25, near Tuesday’s record high of $9,267.50.

Since February, LME copper stockpiles have dropped by more than one third from six-and-a-half year highs of 555,075 tonnes in February. However, latest data showed copper stocks rose 7,050 tonnes to 357,950 tonnes.

In other metals, LME zinc closed at $2,258 a tonne from $2,301, while nickel ended unchanged at $24,500. Aluminium ended at $2,321 a tonne from $2,351, and tin closed at $25,825 versus $26,250.

In Manila the Philippine stocks closed 1.4 percent lower on Wednesday. The benchmark Philippine Stock Exchange index dropped by 58.28 points to 4,089.75. The all-share index went down by 17. 02 points,or 0.59 percent, to 2,878.52.

The trade volume reached 919 million shares worth 4.1 billion pesos (93.6 million U.S. dollars).

In Hanoi the Vietnam's stock market index, VN-Index, closed at 493. 47 points on Wednesday, up 3.82 points, or 0.78 percent, against the previous trading day.

A total of 95.68 million shares worth 2.19 trillion Vietnamese dong (VND) (112.24 million U.S. dollars) changed hands at the Ho Chi Minh City Stock Exchange.

In Shanghai the China's benchmark Shanghai Composite Index on the Shanghai Stock Exchange closed at 2,911.41 Wednesday, down 15.66 points, or 0.54 percent, from the previous close. Total turnover was 143.37 billion yuan (21.53 billion U.S. dollars).

Hong Kong stocks closed down 455.84 points, or 1. 95 percent, at 22,975.35 on Wednesday.

Turnover totaled 72.45 billion HK dollars compared with Tuesday 's 57.59 billion HK dollars (1 U.S. dollar equals to 7.77 HK dollar).

The shares prices in Singapore fell 29.71 points or 0.94 percent on Wednesday with the benchmark Straits Times Index (STI) closing at 3,147.2 points.

The overall volume stood at 1.48 billion shares worth 1.76 billion Singapore dollars (about 1.35 billion U.S. dollars).

Sembcorp Industries , a Singapore conglomerate which has businesses in utilities and industrial parks, said on Wednesday its Australian associate has won a bid to acquire a waste management firm for A$235 million ($234.8 million).

SITA Environmental Solutions, which is 40 percent-owned by Sembcorp Industries, will acquire 100 percent of WSN Environmental Solutions, a firm owned by the New South Wales government in Australia.

The acquisition will be funded through a mix of debt and shareholder funds, and is expected to be completed at end-January next year, Sembcorp Industries said in a statement.

In Jakarta Indonesia shares close slightly lower by 31.352 points, or 0.85 percent, to a level of 3,658.314 point on Wednesday.

Some 134,566 transactions were booked on Wednesday, involving 13.677 billion copies of share worth 9.95 trillion rupiah (about 1 billion U.S. dollar).

In Bangkok The Stock Exchange of Thailand (SET) composite index on Wednesday moved down 1.94 points, or 0.19 percent to close at 1, 035.47 points.

Some 5.34 billion shares worth 41.08 billion baht (about 1.36 billion U.S. dollars) changed hands. PTT chairman Norkhun Sitthipong said yesterday that the company has approached shareholders including the Government Pension Fund, the Government Savings Bank and the Vayupak Fund. It is awaiting their response.

The Government Pension Fund holds 5.88% of IRPC, with the Government Savings Bank owning 9.69% and the Vayupak Fund 7%.

According to Mr Norkhun, next year is promising for IRPC's performance given growing demand for polymer products in Asia.

Prospects are brighter despite the economic slowdown in developed countries, he said.

IRPC last week announced a plan to increase its budget for research and development in high-value polymers to 1% of sales next year from 0.1% this year, focusing on specialty monomers and chemical substances.

In Kuala Lumpur The Malaysia stock market ended lower here on Wednesday. The Kuala Lumpur Composite Index (KLCI) was at 1,509.10, down 1.48 points or 0.10 percent, and the Emas was unchanged at 10, 301.75.

Turnover increased to 1.12 billion shares valued at 1.76 billion ringgit Malaysia (561.05 million U.S. dollars), compared with 1.17 billion shares valued at 1.68 billion ringgit Malaysia ( 536.91 million U.S. dollars) on Tuesday.


Shayne Heffernan brings more than 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over US$500m and 1 that reach a peak market cap of US$15billion. He has managed and overseen start-ups in Mining, Shipping, Technology and Financial Services.


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