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ASEAN STOCK WATCH Asean Affairs   8  December  2010

ASEAN Markets Moving Higher

Shayne Heffernan

ASEAN markets are set for additional gains today. PTT, PTTEP, Genting, PDLT, look like strong buys.

Overnight The S&P 500 climbed to a fresh two-year intraday high on Tuesday as investors bet a deal to extend tax breaks will prompt increased spending and buoy the economy while preserving returns for shareholders.

However, stocks eased off session highs as several high-ranking Democrats gave a lukewarm reception to the deal, which still needs the backing of Congress to become law.

Overall ASEAN Stocks are still undervalued, Thailand is trading at 12.5 times this year's projected earnings, below all-Asia's 13.2 and cheaper than most of the other regional markets. Indonesia is trading at 15.2, higher than the 13.9 of Singapore and Malaysia and the Philippines' 13.6.

Indonesia and Malaysia were closed for holidays today but will open up higher today.

Thai stocks rose to a four-week high on Tuesday in thin trade, led by energy shares after a jump in oil prices, and some other Southeast Asian markets saw cautious buying due to guarded optimism about the global economy.

Thailand, the region's second-best performer this year, rose 0.6 percent after a long holiday weekend to its highest since Nov. 10.

In Singapore the STI gained 0.3 percent, both in thin volume compared to their 90-day average. The Philippines dropped 0.6 percent from a one-month high in light trade, with foreign outflows of $7.9 million, while Vietnam fell 1 percent from a two-month high.

Petronas and BASF consider Joint-Venture worth US$1.29B

Malaysia’s state-owned oil and gas giant Petronas and the largest Germany-based chemical company in the world BASF are considering a potential J-V worth about 4B Ringgit (US$1.29B).

Petronas and BASF said in a joint statement the two companies signed a memorandum of understanding (MoU) here on Monday to undertake a feasibility study to produce special chemicals in Malaysia.

“The partners are considering a potential joint investment sum of approximately 4B Ringgit (US$1.29B), ” said the statement.

Under the terms of the MOU, the two parties would evaluate the technical, commercial and economic viability of jointly owning and operating world-scale facilities for the production of specialty chemicals.

The final investment would be determined following the outcome of the joint feasibility study to be completed in Y 2011, added the statement.

Petronas executive vice president of downstream business Wan Zulkiflee said the development of a new specialty chemical products portfolio was an important component of Petronas’ plan to further grow the downstream petrochemical business.

“This is part of its integrated plan to be a key player in the region as well as to spur domestic investment in the oil, gas and petrochemical industries,” said Wan Zulkiflee.

Martin Brudermuller, member of the board of executive directors of BASF, responsible for Asia Pacific, said that with the rapid growth of chemical markets in Asia Pacific, the joint venture with Petronas was an excellent, well-established and competitive production platform in Asia.

“By expanding our local production base in Malaysia, we can further improve our ability to supply our customers in Asia, from Asia,” added Brudermuller.

According to BASF’s Asia Pacific Strategy, BASF intends to produce 70 percent of Asia Pacific sales in the region, with investments of 2B Euro (US$2.66B) between Y’s 2009 and 2013.


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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