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ASEAN STOCK WATCH Asean Affairs   20  December  2010

ASEAN to See Christmas Rally

Shayne Heffernan

The best buys in ASEAN today are Olam, LVS, PTT, Genting, PTTEP, Thoresen Thai

In Singapore economic data showed that exports were growing, non-oil domestic exports (NODX) rose a solid 10 per cent in November following a 35 per cent expansion in October.

Singapore’s Trade promotion agency IE Singapore said both electronic and non-electronic domestic exports were still growing.

One of the most important local indicators, Exports of electronic products, grew 11 per cent on-year with increases in exports of ICs, diodes & transistors and telecommunications equipment.

Exports of non-electronic products grew 9.5 per cent.

IE Singapore said the rise in non-electronic NODX was led by specialised machinery, petrochemicals and measuring instruments.

Exports to all of Singapore’s top 10 markets rose in November.

The top three contributors were China, the European Union and Hong Kong.

Shayne Heffernan has released a strong buy today on Thoresen Thai Agencies, one of Thailand’s biggest shipping companies. Today the stock fell after the shipping rate for commodity transportation dropped but recovered in late day trading.

Shayne Heffernan has put a 43 Baht price target on Thoresen for 2011.

Thoresen Thai Agencies Public Co. Ltd. is a Thailand-based holding company. Its business falls into three areas: dry bulk shipping, in which it provides both liner and tramp services; offshore services, where it provides sub-sea engineering, and contract drilling services, and shipping services, in which it provides ship agency services, ship stevedoring, ship brokerage, port operations and transportation. It has investments in over 40 transportation and energy subsidiaries.

Thoresen Thai Agencies is to spend some 346.38m baht ($12m) to buy a strategic stake in Vietnam’s Baria Serece, which controls Phu My port, it has confirmed.

This will give TTA a 20% share of Vietnam’s largest dry cargo deepwater port, which is capable of receiving up to 6m tonnes of agricultural products, coal and fertilizer per annum.

The move is part of a pattern of increasing investment from private and foreign investors in Vietnam’s dry bulk ports, said an official with the Vietnam Ports Association.

“Volumes are not steady,” said the official who added that investment pay-offs were “rather risky in some areas” as the ports viability was dependent on local production and demand. He did not elaborate.

TTA will purchase and hold its stake via Soleadao Holdings, its wholly-owned investment company for projects and assets outside Thailand.

Ebeling Heffernan Strong Buy, Singapore listed Olam International has agreed to buy tt Timber International from Danish firm Dalhoff Larsen Horneman (DLH) for 29.6 million euros (US$39.4 million).

The proposed acquisition will help Olam expand its tropical hard wood business and seek opportunities to enter the carbon credit market.

It will give Olam an additional 1.6 million hectares in Africa, taking its total concession to 2.3 million hectares in tropical forest and making it one of the world’s biggest certified hard wood supplier.

Sunny Verghese, Olam’s managing director and chief executive, said Olam was buying tt Timber’s assets at a deep discount.

Olam had estimated the concession value at 70 million euros, he said, but DLH’s change in fortune following the financial crisis pushed it to refocus on its wholesale business and reduce its assets to solve liquidity issues.

Robert Hunink, president and global head of Olam’s Wood Products business, said the assets also provide the possibility for Olam to actively seek carbon credits.

He said the company will review building a power plant fuelled by biomass and ways to restore degraded forest areas. The power plant may cost about 12 million euros and save burning 3 million litres of diesel, he added.

Olam said the acquisition would open up new markets in the US, Europe, Northern Africa and strengthen its foothold in India and China.

Shayne Heffernan said today Las Vegas Sands Corp. NYSE:LVS, Genting Berhad KUL:GENTING are doing very well, and lifting Singapore Air traffic.

Annual passengers surpassed 40 million on Wednesday for the first time, Changi airport said in a statement. Traffic in the first 11 months of the year was up 14 percent from the same period last year, the airport said.

Indonesia was Changi’s biggest market followed by Australia, Malaysia, China and Thailand, the airport said.

Singapore opened two casino resorts in the first half of the year – the $5.7-billion Marina Bay Sands and the $5.1-billion Resorts World Sentosa – as the island nation tries to become one of Asia’s top gambling and tourist destinations.

Both resorts plan to open new attractions next year, which analysts expect will attract even more visitors.

“Singapore, being the new playground of Asia, will continue to attract strong tourist arrivals,” DBS bank said in a report. “The growth rate is sustainable into 2011 as the global economic recovery becomes broad-based and combines with the gradual opening of the resorts.”

Analysts expect Asia’s economy to outperform the U.S. and Europe again next year. Morgan Stanley forecasts 8.9 percent growth in Asia this year and 7.9 percent next year. Singapore’s economy will likely grow 15.2 percent this year and 4.7 percent in 2011, Credit Suisse said in a report.

Changi was the world’s seventh busiest airport during the first eight months of this year according to the Geneva, Switzerland-based Airports Council International. London’s Heathrow airport was the world’s busiest with 40 million passengers in the January-August period, followed by Paris and Hong Kong.

Changi serves 98 airlines operating about 5,200 weekly scheduled flights to and from more than 200 cities in 60 countries and territories.

At HCM our strong regional experience combined with unparalleled local knowledge about markets and opportunities helps potential acquirers identify the right M&A target and to approach the target’s shareholders in the most appropriate manner to negotiate the transaction, taking into account customs and regulations of the respective country.

Our extensive experience in handling cross-border, cross-cultural acquisitions, includes:

* Cultural sensitivities to the role of M&A in strategic development

* Managing an M&A process in more than one language and across distant time zones

* Divergent approaches to valuation

* Managing due diligence in environments of sub-optimal transparency

* Supporting clients entering an unfamiliar jurisdiction

* “Coaching” counterparties who have limited M&A experience

* Ensuring that dedicated, senior “on the ground” resources are available at all times to our client

At HCM we understand the strategic and financial value that can be unlocked through business combination’s and targeted acquisitions is often compelling. However, to be successful, any proposed transaction requires an experienced, independent advisory team which identifies and addresses the risks and opportunities of a transaction and which understands these divergent markets, the challenges faced in achieving a successful outcome, and has the required experience to lock-in the correct value.


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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