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ASEAN STOCK WATCH Asean Affairs 15 February 2013 

ASEAN Markets Update

ASEAN Robinsons Land, Petron,  Nippon Indosari, SSI, Olam

Wall Street has rallied lately, with the S&P 500 briefly hitting its highest intraday level since November 2007 in Wednesday's session. Still, there are few obvious catalysts to continue the rally, and while the S&P is on track for its third straight day of gains, none of those daily gains was more than 0.2 percent.

Weakness in Europe contributed to a 5 percent drop in revenue from the region for Cisco Systems (CSCO), which nonetheless beat estimates as it reported its results late Wednesday. The company's shares slid 1.3 percent to $20.87.

General Motors Co (GM) reported a weaker-than-expected fourth-quarter profit, also citing bigger losses in Europe alongside lower prices in its core North American market. The stock was off 2.8 percent at $27.88.

French Prime Minister Jean-Marc Ayrault on Wednesday said the government will miss the objective of trimming public deficit to 3 percent of the national output in 2013.

Speaking to the state-run TV channel France 3, Ayrault admitted that France's gap "will not be exactly at 3 percent."

Despite the Socialists' effort to squeeze spending by 38 billion euros (51 billion U.S. dollars) to fulfill promises of deficit-cutting and growth recovery, a continued ailing economy was likely to throw a spanner into their plans to put France's finances in order, the country's audit office La Cour des Comptes said on Tuesday.

The German economy, Europe's biggest, shrank in the last quarter of 2012, as the eurozone crisis hit exports, data showed on Thursday, but analysts said activity would bounce back quickly.
The national statistics office Destatis calculated that gross domestic product contracted by 0.6 percent in price, calendar and seasonally adjusted terms in the period from October to December.

Analysts and economists had been pencilling in a drop of 0.5 percent after Destatis said in January that the economy had contracted by "around half a percentage point'' at the end of last year.
Growth has indeed been slowing all year as the eurozone debt crisis puts the brake on exports.

GDP grew by 0.5 percent in the first quarter of 2012 and then by 0.3 percent in the second quarter and 0.2 percent in the third quarter.

With the contraction of 0.6 percent in the fourth quarter, the economy expanded by just 0.7 percent across the whole of 2012, compared with 3.0 percent in 2011, Destatis said in a statement.
The statisticians noted, however, that due to the timing of the Christmas holidays, there were three fewer working days in 2012 than in 2011.

Adjusted for that effect, the German economy grew by 0.9 percent overall last year, they calculated.

The fourth-quarter data "offer mixed signals,'' Destatis said. "While consumer and state spending increased slightly, investment in construction was down and investment in equipment fell even more sharply,'' it said.

Sahaviriya Steel Update

Sahaviriya Steel had a run up to 70plus satang but is now consolidating recent gains.

Keep an eye on this one it looks like good buying at the bid.

Olam International

As we predicted Olam survived the Muddy Waters slander campaign and will continue to make ground, our 2013 target is 2.50 on Olam.


Petron Malaysia Refining & Marketing Bhd's earnings fell 84% to RM5.43mil in the fourth quarter ended Dec 31, 2012 from RM34.57mil a year ago due to depressed margins.

Announcing its results on Thursday, the company which is part of Philippines's Petron Corporation, attributed the fall in margins to the volatility in global oil markets during the period. Its earnings per share were 2.0 sen compared with 12.8 sen a year ago.

Its revenue rose 8.3% to RM2.98bil from RM2.75bil. Sales volumes increased by 8% to 7.8 million barrels compared to 7.2 million barrels a year ago.

"The increase in sales volumes is partly due to the rebranding programme that was implemented last year following the completion of Petron Corporation's takeover of ExxonMobil's downstream business in March 2012. The programme is expected to continue improving sales volumes and benefit the company over the long-term," it said. For FY12, its earnings fell 36% to RM98.17mil from RM153.37mil in FY11 due to the unpredictability in crude and product prices, especially in Q2 and Q4 of 2012, which resulted in higher-cost inventory being sold at lower prices. Its revenues were 2.1% higher at RM11.50bil compared with 11.26bil a year ago.

Nippon Indosari
Nippon Indosari Corpindo, the producer of the popular bread Sari Roti, saw its net income soar 28.6 percent last year, as the country’s emerging middle-class starts to look beyond rice as their staple food.

The company booked a net income of Rp 149.1 billion ($15.5 million) last year, up from Rp 115.9 billion a year earlier, while sales climbed 46.2 percent to Rp 634.4 billion, the company said in the statement published in the Investor Daily.

Costs at the company surged 37 percent to Rp 370.25 billion in 2012, as the price of wheat in the international market rallied last year due to severe drought in several major wheat-producing countries like the United States and Australia.

Indonesia depends heavily on imports to source wheat to fuel the increasing demand from the country’s noodle and bread industry. Bloomberg reported that Indonesia could see its wheat purchases climb 19 percent to seven million metric tons in 2013 from 5.9 million metric tons last year.

Indonesia is already the largest importer of wheat in the region.

The Jakarta-based company currently has six factories. Five are located in Java and one in Medan.

It plans to build three more factories and has secured $22.8 million in funding from Bank Central Asia, the country’s third largest lender, to build them. The factories will be located in Riau, West Java, and an undecided location in Kalimantan.

The company will produce two lines of products — white breads and sweet breads — at each of the new factories. Each white bread line will produce 36,000 breads per year, while the sweet bread line will make 144,000 pieces of bread per year.

The company currently has a total daily production capacity of 4.5 million bread products.

The company is also looking to tap into rising confidence from investors toward the country by selling Rp 1 trillion in bonds in the second half of this year. It plans to use the proceeds to finance its expansion as well as refinance maturing debt this year.

Shares of Nippon, traded under the ROTI ticker in the local exchange, rose 0.8 percent to Rp 6,000 on Wednesday.

Robinsons Land

Robinsons Land Corp. grew its net profit by about 3 percent to P1.19 billion in October to December last year on higher earnings from its shopping mall, office property and residential development businesses.

The figures during the three-month period, the first quarter in RLC’s fiscal year that ends in September, were based on unaudited numbers and were supported by a 9.2-percent growth in operating income or earnings before income tax during the year, RLC president Freferick Go said on Wednesday.

RLC’s revenue for the quarter rose by about 10 percent to P3.78 billion from year-ago level.

The property company has focused more on beefing up its shopping mall and office leasing portfolio and was selective in residential property development in the last 12 months.  However, RLC recently signified intention to boost its residential portfolio.  It has also gained a foothold in the country’s burgeoning gaming-oriented property development in partnership with Japanese pachinko mogul Kazuo Okada.

The $1-billion Manila Bay Resorts, an integrated entertainment and resort venture between Okada and RLC, is set to open in 2014 in Manila’s future gaming strip Pagcor City. The 44-hectare entertainment complex to be developed by Tiger Resort Leisure & Entertainment Inc. in Pagcor City will have three hotels, a shopping mall with cinemas, a trade hall, luxury retail stores and restaurants.

The gaming facility is targeted to have 30,000 square meters in gaming space, 500 gaming tables and 3,000 slot machines. A Las Vegas-style dancing water fountain will be part of the attraction while several residential towers will also be developed. RLC is still undergoing a due diligence on the residential component of the project and could not provide details yet.

Yesterday in Asia

Japan’s Nikkei 225 index rose 0.6 percent to 11,313.68. The Tokyo market shrugged off data showing the Japanese economy shrank for a third straight quarter in the last three months of 2012, as investors expected the yen’s recent weakness will boost company earnings.

The Bank of Japan ends a policy meeting Thursday but analysts said no new initiatives were expected in light of an impending leadership change.

Central bank governor Masaaki Shirakawa, who has appeared at odds with Prime Minister Shinzo Abe’s views, is resigning next month, giving the government an opportunity to find a successor more sympathetic to Abe’s push for ultra-loose monetary policy.

South Korea’s Kospi rose 0.4 percent to 1,984.63. Australia’s S&P/ASX 300 advanced 0.6 percent to 5,033.70. Hong Kong’s Hang Seng, opening after a three-day holiday, rose 1 percent to 23,448.71. Markets in Singapore and the Philippines fell while China and Taiwan remained closed for Lunar New Year holidays.

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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