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ASEAN STOCK WATCH Asean Affairs   6  December  2010

Wall St to Lead ASEAN to new Highs

Shayne Heffernan

ASEAN Markets are going to set new record highs before Christmas, Wall St has recovered from falls from the European news and we will see the start of the Christmas Rally in the coming days.

Arrow Resources Development Inc. OTC:ARWD, PT Astra Agro Lestari Tbk JAK:AALI, Aberdeen Indonesia Fund, Inc. AMEX:IF, Market Vectors Indonesia Index (ETF) NYSE:IDX PT Astra Agro Lestari Tbk is an Indonesia-based plantation company.

The Company’s principal activities are the operation of oil palm, rubber and cocoa plantations, general trading, manufacturing, transportation, consultation and related services. Its 4,059-hectare oil palm plantation is located in South Kalimantan and the cooking oil factory is located in North Sumatra, Indonesia. The Company and its subsidiaries’ mills have production capacities of 940 tons of fruit bunch per hour and 600 tons of kernel per day and 300 tons of crude palm oil (CPO) per day. The subsidiaries’ plantations and mills are located in Java, Sumatra, Kalimantan and Sulawesi.

Arrow Resources Development Inc. OTC:ARWD, Arrow Resources Development Inc. (ARWD) provides corporate operating structure, financial operations, sales and marketing activities and the financial administrative infrastructure for the commercial development of land and natural resources in Indonesia.

The land to be developed has been categorized as environmentally “critical land” by the Indonesian government due to deforestation by local farmers and predatory logging companies. Arrow and their partners undertake every project in a manner that is sensitive to the local environment and social structure, blending economic growth with socially conscious development.

All current and future operations utilize the existing natural resources in a sustainable, renewable and responsible manner.

Aberdeen Indonesia Fund, Inc. AMEX:IF

Aberdeen Indonesia Fund, Inc. (the Fund), formerly Indonesia Fund, Inc., is a closed-end fund. The Fund seeks long-term capital appreciation as a primary objective and income as a secondary objective, by investing primarily in Indonesian securities. Aberdeen Asset Management Asia Limited serves as the Investment Adviser of the Fund.

Market Vectors Indonesia Index (ETF) NYSE:IDX

The Indonesia Index ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Indonesia Index. The Market Vectors Indonesia Index is a rules-based, modified market capitalization-weighted, float-adjusted index intended to give investors exposure to Indonesia.

Here is what Ebeling Heffernan feel are the best ASEAN ETFs

iShares MSCI Malaysia Index Fund (EWM)

The Malaysia ETF is well diversified, especially for an emerging market. Four sectors account for more than 10% of total assets, and consumer goods and services receive a significant allocation. EWM is very light on energy firms, as well as health care and technology names, which combine to make up less than 1% of the total fund assets.

iShares MSCI Indonesia Investable Market Index Fund (EIDO)

EIDO is a new fund which seeks to track the MSCI Indonesia Investable Market Index, a free-float adjusted market capitalization weighted benchmark designed to measure the performance of equity securities in the top 99% by market capitalization of equity securities listed on stock exchanges in Indonesia.

iShares MSCI Singapore Index Fund (EWS)

As the most developed market in ASEAN, EWS suffered more than most from issues in Europe. The fund is well down over the past four weeks and it has seen it become the worst among ASEAN ETFs, however a US market correction will see this one leap forward. EWS is heavily focused on the finance sector which makes up just more than half of the fund’s total assets. EWS holds about 31 stocks, so it is not surprising to see that roughly 70% of EWS is concentrated in its top 10 holdings.

Market Vectors Indonesia Index ETF (IDX)

IDX is pretty well diversified among sectors with large allocations going towards financials (25%) and industrial materials (19.8%). However, the fund has no securities that are engaged in the technology or health care sectors, so investors will have to achieve that international exposure elsewhere. Indonesia has been soaring as of late due to strengthening commodity prices and one of its main components, Astra, hiking its dividends.

iShares MSCI Thailand Index Fund (THD)

THD focuses on large and giant cap corporations which make up 62% of its total assets compared to just 6% for small and micro cap securities.

Market Vectors Vietnam ETF (VNM)

Vietnam has been one of the worst performing countries in the Southeast Asian area. VNM only holds 32 companies and is highly focused on three sectors which make up almost 65% of the fund’s total assets; financials, energy, and industrial materials. This is achieved by tracking the Market Vectors Vietnam Index, which provides exposure to publicly traded companies that, predominantly, are domiciled and primarily listed in Vietnam and which generate at least 50% of their revenues from Vietnam.

Wall St Oulook

The media will continue to beat up the European sovereign debt contagion crisis next week, as eager press hungry politician’s play along, and there is a good chance we will see yet another Anti-Europe blurb from Soros.

But where it matters on Wall Street, investors will speak with their pockets and will be buyers.

Wall Street has demonstrated that it has the ability to hold onto gains, and quickly recover from losses despite the Euro debt woes, suggesting that investors are confident of a sustained Bull Market.

Some signs from the market supported the this week’s view of a bull run. The outstanding put-to-call ratio on index options, heavily focused on the S&P 500 benchmark, dropped from 1.32 last week to 1.29, showing strong bullish signs for next week.

The ratio remains the primary hedging device for institutional investors. The ratio rises with a market rally as the possibility of a pullback also increases.

The CBOE Volatility Index or VIX, Wall Street’s much watched fear gauge, actually fell despite a decline in stocks earlier in the day as traders saw fewer reasons to buy protection, the rub forward late in the day reflected this confidence.

The index, which traditionally moves in an inverse correlation to the S&P 500 benchmark, diverged from the relationship and closed at its lowest since April.

If that is not enough to convince you, the iPath S&P 500 VIX Short Term Futures exchange-traded note also notched a new year low of $US41.51 on Friday. The ETN, which offers directional volatility exposure, is based off of the front two-month futures on the VIX.

S&P 500 ended the week up 3%

The bad news bears helped develop a fear that Europe’s debt crisis could spiral out of control, and this pushed stocks off two-year highs hit earlier this month. Last week started with the S&P 500 down 3 per cent from Nov. 5.

But the index recovered to the early November levels this week as fears were countered by a string of healthy economic data and an upbeat outlook on consumer spending during the holiday shopping season.

On Friday, stocks closed out their best week in a month with the Dow Jones industrial average up 2.6 per cent, the Standard & Poor’s 500 up 3 per cent and the Nasdaq Composite Index up 2.2 per cent, after shrugging off tepid jobs numbers for November.

The News This Week

Not so many Economic indicators next week, with the Institute for Supply Management releasing its semi-annual economic forecasts for the US manufacturing and services sectors on Tuesday. The weekly mortgage data on Wednesday and jobless claims on Thursday will still get close scrutiny.

On Friday, Wall Street will watch for reports on import and export prices in November, the international trade deficit for October, and a preliminary reading December consumer sentiment from the Thomson Reuters/University of Michigan Surveys of Consumers.

As the year wraps up, portfolio managers will continue to chase outperforming stocks and sell some laggards to keep their balance sheets healthy. The three-day moving average of stocks hitting new 52-week highs on the New York Stock Exchange accelerated at the end of November and is now close to 250, while stocks making new 52-week lows edged down in December and remained slight. Shayne Heffernan

USA Strong Buys

Dividend Stocks

Teekay Tankers (NYSE:TNK) Price/Share*: $12.11 Annual Dividend: $1.36 Dividend Yield: 11.23%

Pay Date: 11/30 Ex-Dividend Date: 11/12 Record Date: 11/16

Teekay Tankers Ltd. is engaged in the international marine transportation of crude oil through the operation of its oil tankers. As of March 1, 2010, its fleet consisted of nine Aframax-class oil tankers and three Suezmax-class oil tankers. As of March 1, 2010, five of these vessels were operating in the spot market through participation in pooling arrangements managed by

subsidiaries of Teekay Corporation. As of March 1, 2010, Teekay Corporation, through its 100%-owned subsidiary Teekay Holdings Ltd., had a 42% interest in the Company. On June 24, 2009, it acquired from Teekay Corporation its subsidiary Ashkini Spirit L.L.C, which owns a Suezmax tanker, the Ashkini Spirit.

Nordic American Tankers (NYSE:NAT)

Price/Share*: $25.60 Annual Dividend: $2.40 Dividend Yield: 9.38%

Pay Date: 12/03 Ex-Dividend Date: 11/18 Record Date: 11/22

Nordic American Tanker Shipping Limited is an international tanker company that owns 20

double-hull Suezmax tankers, including four newbuilding vessels, averaging approximately 157,000 deadweight (dwt) each. The Company operates 14 of the 16 existing vessels in the spot market or on spot market-related charters pursuant to cooperative arrangements with third parties. It also operates two of the 16 existing vessels on bareboat charters. The Company’s fleet consists of 20 modern double-hull Suezmax tankers, of which four are newbuildings. The Company operates various vessels, including Gulf Scandic, Nordic Hawk, Nordic Hunter, Nordic Voyager, Nordic Discovery, Nordic Saturn, Nordic Grace, Nordic Moon, Nordic Mistral, Nordic Sprite, Nordic Fighter, Nordic Cosmos, Nordic Passat and Nordic Vega.

General Maritime (NYSE:GMR)

Price/Share*: $3.79 Annual Dividend: $0.32 Dividend Yield: 8.44%

Pay Date: 11/26 Ex-Dividend Date: 11/09 Record Date: 11/12

General Maritime Corporation is a provider of international seaborne crude oil transportation services. The Company also provides transportation services for refined petroleum products. As of February 26, 2010, the Company’s fleet consists of 31 wholly owned vessels, including 11 Suezmax vessels, 12 Aframax vessels, two Panamax vessels and four Handymax vessels.

These vessels have a total of 3.9 million deadweight (dwt) carrying capacity on a combined basis and all are double-hulled. Many of the vessels in its fleet are sister ships, which provide the Company with operational and scheduling flexibility, as well as economies of scale in their operation and maintenance. Its customers include international oil companies and vessel owners, such as Chevron Corporation, CITGO Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess Corporation, Lukoil Oil Company, Stena AB and Sun International Ltd.

Mission West Properties (NYSE:MSW)

Price/Share*: $6.60 Annual Dividend: $0.60 Dividend Yield: 9.09%

Pay Date: 10/07 Ex-Dividend Date: 09/28 Record Date: 09/30

Mission West Properties, Inc. is a self-managed, self-administered and integrated Real Estate Investment Trust (REIT). The Company acquires, markets, leases, and manages research and development (R&D) properties, primarily located in the Silicon Valley portion of the San Francisco Bay Area. As of December 31, 2009, it owned and managed 111 properties totaling approximately 8 million rentable square feet of R&D properties through four limited partnerships (operating partnerships), for which it is the sole general partner. R&D property is designed for research and development and office uses and, in some cases, includes space for light manufacturing operations with loading docks.


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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