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ASEAN Market Preview

China had a great day Friday and we are looking for that to spill over in to the ASEAN markets this week. There are still concerns regarding the USA and Europe but China data should be enough to turn sentiment in Asia.

On Friday Shanghai surged 4.3 percent to 2,150.63 after HSBC said China’s manufacturing activity hit a 14-month high this month. It’s another sign that the world’s No. 2 economy is picking up.

Singapore rose 0.4 percent to 3,168.43. Thailand gained 0.4 percent to 1,358.50.

In Indonesia, fast moving consumer goods seller Unilever Indonesia rose 9.1 percent to Rp 22,200 after losing 22 percent over the previous two days, its biggest two-day drop since August 2000.

My 2 stand out buys this week are Bumi in Indonesia and Olam in Singapore.

As I predicted, the Bakrie family have been cashing up and they will take a run at taking full control at Bumi ( you heard it here first last week).

Bumi and Olam have had some bad press but they will be back, both rate as good buying at these low prices.

Overall this is a good buying week in Asia, stocks are trading at a discount as the childish game of poiltics in Europe andthe USA weigh on their own markets.

This coming Friday will mark the last so-called "quadruple witching" day of the year, when contracts for stock options, single stock futures, stock index options and stock index futures all expire. This could make trading more volatile.

So be ready and buy the dips. America will raise the debt limit, it is not a great thing, but it will see a strong rally, my advice is to sell that rally.

Higher tax rates on capital gains and dividends are part of the automatic tax increases that will go into effect next year, that will bring more money to Asia.

2013-2015 is setting up to be ASEAN boom time.

Shayne Heffernan Ph.D.
Economist/Hedge Fund Manager

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