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ASEAN STOCK WATCH Asean Affairs  11 December 2012

ASEAN Market Preview

Chinese enterprises' net income and revenue growth for 2012 fell sharply due to the economic slowdown, Fitch Ratings said in a report.

According to Fitch's analysis, which is based on a sample portfolio of 40 Chinese corporations, their net income growth fell by 11 percent in 2012.

The portfolio can be broken down into 15 State-owned enterprises and 25 non-governmental businesses.

The analysis focuses on the aggregate, average and median performance of Fitch's portfolio of the 40 Chinese companies in an attempt to present some overall trends and conclusions.

Fitch forecasts the average net income growth for the 40 corporations will slow to just 0.1 percent in 2012 from 10 percent in 2011.

The fall in net income is broadly in line with China's recent overall economic performance this year, the report said.

U.S. President Barack Obama met with Republican House Speaker John Boehner on Sunday to negotiate a deal for avoiding the "fiscal cliff" set to go into effect in the new year.

The two sides declined to provide details about the unannounced meeting. Obama is expected to make remarks at 2 p.m. (1900 GMT) from Michigan where he is touring an auto plant.

The fiscal cliff talks have kept markets on edge in the last month as investors worry that the scheduled tax hikes and budget cuts could send the U.S. economy into recession if politicians do not reach a deal.

But the heightened rhetoric and lack of substantial progress has also handcuffed the equities market. The benchmark S&P 500 index has yet to see a move greater than 0.5 percent in either direction for December, and hasn't moved more than 1 percent either way since Nov. 23.


Thailand's tourism industry is likely to grow by more than 10% next year and about 23 million foreigners are expected to visit the country in 2013, Association of Thai Travel Agents (Atta) president Sisdivachr Cheewarattanporn said on Monday.

Mr Sisdivachr said the number of Asian tourist arrivals, particularly from China, South Korea and Japan, is up 20% to 50% for November and December, 2012.

From January to July this year, the number of tourists who used Atta member services also increased by 20%, the highest growth in three years. The association boasts five million members, he added.

The projection is based on an assumption that there will be no political violence, he said.

The Atta president said Thailand could become the top destination in the Association of Southeast Asian Nations (Asean) if the government could ensure that the political situation is stable.

The government should also promote the country as a travelling hub in the region, he said.


 Ocean Financial Centre, Keppel REIT's newest property, continues to lead in architectural and building excellence having been named the World's Best Commercial High-rise Development at the International Property Awards on 7 December 2012 in London.

Ms Ng Hsueh Ling, CEO of Keppel REIT Management, the Manager of Keppel REIT, said, "Ocean Financial Centre is undeniably one of the best commercial properties with an enviable location at the Raffles Place and Marina Bay precincts. The latest award reflects Keppel REIT Management's commitment towards investing in quality commercial properties that will provide stable and sustainable returns to our Unitholders."

Since taking a majority interest of 99.9% in Ocean Properties Limited Liability Partnership, which owns Ocean Financial Centre, Keppel REIT Management has successfully increased occupancy at Ocean Financial Centre from approximately 80% as at October 2011 to approximately 96% to-date. Its latest tenants include those from the energy and natural resources as well as legal and financial service sectors namely Anglo American, CBRE Global Investors, Freshfields, Gazprom and Trafigura. They add to the stellar line-up of multinational companies such as Australia and New Zealand Banking Group Ltd (ANZ), BNP Paribas and Drew & Napier, all of whom have made Ocean Financial Centre their preferred business address.

Keppel REIT Management has also successfully completed the refinancing of Ocean Financial Centre's construction loan of $598 million at competitive interest rates. The refinancing significantly lengthens Keppel REIT's weighted average debt maturity profile from 2.3 years to 3.4 years as at September 2012.

Developed by Keppel Land, Ocean Financial Centre won the Best Office Architecture, Best Office Development and Best Commercial High-rise Development in Singapore and subsequently clinched the award for Best Commercial High-rise Development at the Asia Pacific Property Awards in April 2012. The landmark premium Grade A office development went on to compete at the international arena and was awarded highest accolades as the World's Best Commercial High-rise Development at the International Property Awards. The International Property Award is a globally-recognised mark of excellence, which celebrates the highest levels of achievement in the property and real estate industry.

Strategically located at the intersection of the prime Raffles Place and Marina Bay precincts, Ocean Financial Centre was completed in April 2011. At 43-storeys high, Ocean Financial Centre is one of the newest and largest office buildings in Singapore's CBD with 82,283 sm (or approximately 886,000 sf) of net lettable area. Phase 2, which comprises a carpark and retail podium, is currently under construction with completion expected by third quarter.


The Bumiputera Agenda Steering Unit (Teraju) and RHB Islamic Bank Bhd will collaborate to provide financing of up to RM520mil under the Teras Fund to Bumiputera companies.

Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said 250 companies have received funding todate, including 150 companies under Teraju's initial collaboration with SME Bank.

"Over RM1bil has been credited into the Teras fund to benefit companies," he told Bernama after the signing of a MoU between Teraju and RHB Islamic Bank witnessed by Nor Mohamed, who is also Teraju chairman.

Under the RM520mil Teras Fund, RM160mil would be for working capital and the remaining RM360mil would be used for commercial asset acquisition.

Meanwhile, Teraju Chief Executive Officer Husni Salleh hoped Bumiputera small-and-medium enterprises (SMEs) would take advantage of the commercial asset acquisition fund to acquire their own premises.

"This will also increase property ownership among Bumiputeras," he said.

RHB Islamic Bank managing director Abd Rani Lebai Jaafar said the fund offered very competitive financing rates and a two per cent profit rebate extended under the Shariah Compliant SME Financing Scheme.


State-owned energy company Pertamina and Japanese conglomerate Mitsubishi have signed a memorandum of understanding to develop an integrated petrochemical facility in Indonesia.

Pertamina’s president director, Karen Agustiawan, said the cooperation will support the firm’s refinery business and put a foothold on the company’s standing as a leader in the domestic petrochemical business.

“Pertamina’s refinery assets are the largest in Southeast Asia and the fifth-largest in Asia,” she said in a statement on Friday.

Karen added that Pertamina has set the petrochemical business as one of the main pillars that will support the company’s attempt to become a world class energy company by 2025.

Pertamina, however, did not reveal more details on the MoU with Mitsubishi, such as the investment value, time frame or project location.

Last week, the firm signed two MoUs relating to the petrochemical business, the first with Chandra Asri on the development of a polypropylene plant and the other with SK Global Chemical, a South Korean firm.

Pertamina saw a substantial increase in assets in the year-to-date period. As of Sept. 30, the company’s assets stood at $43.45 billion, up 26 percent from the end of last year, reflecting an aggressive expansion of its businesses in and outside Indonesia.

During that period, Pertamina added new wells worth a total of $642.29 million.


Globalport 900 Inc. has sold over P4 billion worth of unlisted shares to comply with the Philippine Stock Exchange’s (PSE) 10 percent minimum public float requirement.

In a disclosure, Globalport, which manages two major cargo and passenger sea terminals in Manila’s Tondo district through subsidiaries, said its major shareholder Sultan 900 Inc. sold 230.79 million shares to unidentified investors on Monday.

These were taken out of Sultan’s 2.097 billion shares in Globalport. The parent firm was left with 1.923 billion common shares following the transaction.

“In view of the sale, PORT’s public ownership is expected to increase from 2,590,3002 common shares to 233,380,300 common shares representing 10.82 percent of (Globalport’s) total outstanding shares,” the Romero firm told the local bourse.

This brought to 23 the number of companies that remained noncompliant with the PSE public float requirement.

Three in the list have filed petitions for voluntary delisting while another three are already under trading suspension, the bourse announced in a memorandum posted on Monday. Some of the remaining companies have asked for a grace period to comply with the requirement.

The remaining 17 companies that may face trading suspension next year due to non-compliance to the public float requirement are: Integrated Micro-Electronics Inc., Alphaland Corp., Synergy Grid & Development Phils. Inc., Manchester International Holdings Unlimited Corp., LT Group Inc., SPC Power Corp., Vivant Corp., Atok-Big Wedge Co. Inc., Mariwasa Siam Holdings Inc., Filinvestment Development Corp., Southeast Asia Cement Holdings Inc., PAL Holdings Inc., Allied Banking Corp., Maybank ATR-Kim Eng Financial Corp., San Miguel Brewery Inc., PNOC Exploration Corp., and San Miguel Properties Inc.

The three companies that have started voluntary delisting procedures are Eton Properties Philippines Inc., First Metro Investment Corp. and Metro Pacific Tollways Corp.

The three noncompliant companies which are already under trading suspension are Cosmos Bottling Corp., NextStage Inc. and Philcomsat Holdings Corp.

In the meantime, those that have requested the PSE for additional time to comply with the minimum public float were the LT Group, San Miguel Brewery and San Miguel Properties.

Public companies that will fail to meet the 10 percent minimum public float requirement will have their shares delisted starting January next year. This means the sale of shares may only be done via over-the-counter transactions, making them harder to dispose of.

Yesterday in Asia

Tokyo ended flat, edging up 0.07 percent, or 6.36 points, to 9,533.75, Sydney gained 0.13 percent, or 6.1 points, to close at 4,557.9, while Seoul also closed flat, losing 0.03 points to 1,957.42.

Hong Kong gained 0.39 percent, or 85.55 points, to close at 22,276.72, while Shanghai rose 1.07 percent, or 21.98 points, to 2,083.77 as investors shrugged off a weak set of trade figures on Monday.

– Taipei fell 0.43 percent, or 32.76 points, to 7,609.50.

TSMC lost 1.63 percent to Tw$96.5 while Hon Hai Precision was 0.63 percent higher at Tw$96.1.

– Manila ended 0.63 percent, or 36.66 points, lower at 5,757.54.

BDO Unibank slumped 2.41 percent to 74.90 pesos while Philippine Long Distance Telehone Co. fell 1.06 percent to 2,620 pesos.

– Wellington eased 0.27 percent, or 10.75 points, to 4,030.77.

Telecom was down 0.88 percent at NZ$2.265, Chorus fell 2.15 percent to NZ$2.73 and The Warehouse was up 0.32 percent at NZ$3.10.

– Singapore closed up 0.23 percent, or 7.23 points, at 3,114.34.

CapitaLand gained 0.81 percent to Sg$3.72 while Singapore Airlines shed 1.39 percent to Sg$10.68.

– Kuala Lumpur rose 0.89 percent, or 14.38 points, to 1632.15.

Axiata Group gained 3.5 percent to 6.19 ringgit while AirAsia lost 2.5 percent to end at 2.69 ringgit.

– Jakarta gained 0.28 percent, or 11.81 points, to 4,302.61.

Tobacco company Gudang garam rose 2.26 percent to 56,550 rupiah, retailer Hero supermarket jumped 3.53 percent to 4,400 rupiah, while Indah Kiat Pulp & Paper dropped 7.79 percent to 710 rupiah.

– Bangkok was closed for a public holiday.

Shayne Heffernan Ph.D.
Economist/Hedge Fund Manager

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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