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ASEAN STOCK WATCH Asean Affairs   3  December  2010

ASEAN is Set for further gains

Shayne Heffernan

ASEAN is Set for further gains today after good economic data lifted Wall St Overnight.

Financial stocks led Wall Street higher on Thursday after the European Central Bank left in place a liquidity safety net for vulnerable banks.

The KBW bank index shot up 3.2 per cent. The S&P 500 financial index rose 2.3 per cent, making it the largest gainer among S&P sectors.

Our focus today is on agriculture:

Golden Agri, Indofood, Sime Darby, Arrow Resources

Agricultural Stocks rallied today, in Singapore Golden Agri-Resources Ltd., the world’s second- biggest palm-oil producer, climbed 1.4 percent to 75 Singapore cents. Indofood Agri Resources Ltd., the palm-oil unit of Indonesia’s biggest noodle maker, surged 4.4 percent to S$2.85.

In Malaysia Buying interest in oil palm-based plantation counters were aided by strong export demand and spiralling crude palm oil futures prices, aided Among plantation stocks which gained from the positive prospects were Sime Darby, which advanced 20 sen to RM8.83, IOI Corporation gained one sen to RM5.82 while KL Kepong expanded 42 sen to RM20.98.

In the USA Arrow Resources OTC:ARWD with 3.5m hectares under management is set to to become one of the largest palm Oil suppliers in the world, with over $100m already invested this company looks set to become a rising star of agriculture.

Palm oil futures for February settlement rose as much as 1.6 percent to 3,540 ringgit ($1,123) a metric ton on the Malaysia Derivatives Exchange, heading to its highest price in more than two years. The contract was at 3,524 ringgit at 12:30 p.m. in Kuala Lumpur.

Bayu Krisnamurthi, deputy agriculture minister in Indonesia, said that global palm oil demand is growing seven percent to 11 percent a year. In a report presented last month by the Food and Agriculture Organization, the world vegetable oils inventory equaled to 13.2 percent of demand in the 2010 to 2011 season, which is considered a critically low level.

However, the global production of vegetable oils, including palm oil, soybean oil, rapeseed oil and sunflower oil, are expected to increase by 1.5 percent to 174.6 million tons in the 2010 to 2011 season. Nonetheless, UN agency said that it will still lag behind demand at 178 million tons, draining inventories. Ram Menon, a director at Tionale Industries, said that a lot of people are speculating on prices.

Palm oil output in Indonesia is expected to be 21.8 million tons this year, which is lower than the 22.5 million tons forecast previously. Output in Malaysia, which is considered the second biggest producer of palm oil, dropped one percent to 14.3 million tons in the first ten months of 2010. Last month, Bernard Dompok, minister of Plantation Industries and Commodities, said that the output this year will have an estimated total of 17.6 million tons.

In Bangkok The Stock Exchange of Thailand SET index closed at 1,031.97, up 14.33 or 1.41% in trade worth 49.42 billion baht.

IRPC performed well again and has earned a strong buy rating from Shayne Heffernan of Ebeling Heffernan

IRPC is a producer of integrated petrochemical products. Its complex consists of an upstream, an oil refinery unit and a downstream petrochemical production. The company’s oil refinery unit has the total capacity of 215,000 barrels per day, accounting for 21% of the country’s total refining capacity.

The IRPC’s production complex is located in an industrial estate managed by the company in Rayong. The estate provides necessary infrastructures that are used to support the production including a deep-sea port, oil storage tanks and a power plant.

Stocks with most active value were as follows:

PTL decreased to 40.00 baht, down 0.75 baht or 1.84%.

PTT increased to 321.00 baht, up 8.00 baht or 2.56%.

IVL increased to 59.00 baht, up 2.50 baht or 4.42%.

IRPC increased to 5.30 baht, up 0.32 baht or 6.43%.

KTB was unchanged at 17.10 baht.

In Manila the Philippine Stock Exchange index (PSEi) jumped by 3.64 or a hefty gain of 146.02 points to finish at 4,148.90.

The broader all-share index was also up by 3.01 percent or 83. 42 points to 2,850.31, along with all six counters.

Trading volume reached 1.45 billion shares worth P7.86 billion ($179.45 million) with 103 issues advancing, 31 declining and 39 unchanged.

Stocks in the 30-company index closed higher. Among the most actively traded issues were Alliance Global Group, Inc. on the back of its tourism business prospect during the holidays.

Other issues include Metropolitan Bank & Trust Co., Ayala Corp. and San Miguel Corp.

In Jakarta the JCI advanced 75.49 points, or 2.9 percent, to 3,694.58. About 7.5 billion shares valued at Rp 7 trillion ($774.4 million) changed hands. Gainers outnumbered decliners 169 to 49.

Analysts said sentiment was driven by a report from ADP Employer Services showing that US businesses added 93,000 workers to payrolls in November, 70,000 higher than economists’ estimate.

In local stocks, Astra Agro Lestari, the country’s largest listed oil palm plantation company, gained 1.2 percent to Rp 25,100 as the February-delivery contract for the commodity gained as much as 1.6 percent to 3,540 ringgit ($1,123) a ton, the highest price since July 2008.

London Sumatera Plantations, one of the nation’s largest rubber producers, increased 2.6 percent to Rp 12,000.

Tokyo rubber futures for May delivery rose 8.2 yen, or 2.2 percent, to 371.7 yen ($4.42) per kilogram, the highest since Nov. 22.

International Nickel Indonesia, the nation’s largest producer of the metal, rose 2.2 percent to Rp 4,650, the steepest increase since Oct. 28. Nickel for three-month delivery climbed 2.2 percent to $23,550 a metric ton in London on Wednesday.

Bank CIMB Niaga, the local unit of the Malaysian lender, rose 7.8 percent to Rp 1,800, its highest close since July 21, 1999. The bank plans to issue Rp 500 billion of subordinated bonds on Dec. 17.

Semen Gresik, the nation’s top cement maker, gained 2.7 percent to Rp 9,450 after president director Dwi Soetjipto said it would set aside as much as $500 million to buy two Malaysian cement makers, Investor Daily reported on Thursday.

The rupiah edged up to 9,013 against the dollar as of the market’s close on Thursday.

Moody’s Investors Service on Wednesday put Indonesia’s local- and foreign-currency debt ratings, currently at Ba2, on review for a possible upgrade, citing economic resilience and an improving debt position.

It last upgraded the country to two levels below investment grade in September 2009.

In Kuala Lumpur the Bursa Malaysia was up 17.80 points to close at 1,503.22, after opening 7.11 points higher at 1,492.53 Thursday morning.

At close, the Finance Index jumped 114.77 points to 13,615.22, the Industrial Index increased 39.59 points to 2,864.58 and the Plantation Index expanded 71.06 points to 7,801.08.

Buying interest in oil palm-based plantation counters were aided by strong export demand and spiralling crude palm oil futures prices, aided Among plantation stocks which gained from the positive prospects were Sime Darby, which advanced 20 sen to RM8.83, IOI Corporation gained one sen to RM5.82 while KL Kepong expanded 42 sen to RM20.98.

Active counters, Petronas Chemicals rose one sen to RM5.39 while K-Star Sports declined four sen to 53 sen and Pantech-Loan Rights was down half-a-sen to 1.5 sen.

Among heavyweights, CIMB and Axiata perked 13 sen each to RM8.51 and RM4.74 while Maybank added six sen to RM8.50.

Volume on the main market increased to 832.88 million shares, valued at RM1.76 billion, from 778.83 million shares, valued at RM1.57 billion, recorded Wednesday.

Turnover on the ACE market rose to 49.43 million units, worth RM10.24 million, from 37.81 million units, worth RM12.64 million, registered on Wednesday.

Warrant turnover was higher at 91.94 million shares, valued at RM16.14 million, from 68.79 million units, valued at RM11.73 million, previously.

Consumer products accounted for 61.77 million shares traded on the Main Market, industrial products 187.38 million, construction 97.7 million, trade and services 218.68 million, technology 34.2 million, infrastructure 19.26 million, finance 41.27 million, hotels 2.1 million, properties 131.43 million, plantations 36.77 million, mining 651,100, REITs 1.65 million and closed/fund 42,400.

The FBM Emas Index surged 115.44 points to 10,195.15 and the FBM 70 Index jumped 115.58 points to 10,542.13.

The FBM Ace Index, however, shed 6.41 points to 4,203.14.

Market breadth was positive with gainers leading losers 516 to 245 while 296 counters were unchanged.

A total of 979.25 million shares, worth RM1.79 billion, were traded against Wednesday’s 886.25 million


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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