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ASEAN STOCK WATCH Asean Affairs   13 January 2011

ASEAN is Set to Rally

Shayne Heffernan

ASEAN is Set to Rally Straits Asia Resources, SapuraCrest, SingTel, PTT

ASEAN Market will rally this morning after positive leads from the USA over night.

Best buys today are Straits Asia Resources, SapuraCrest, SingTel, PTT

Oil and Gas will feature today in ASEAN trading as will agricultural stocks. Overall demand for ASEAN goods and Services is on the rise.

Wall Street stocks rose broadly on Wednesday after a successful bond auction in Portugal eased worries about Europe's debt crisis. Financial shares jumped on hopes that banks would start raising their dividends this year.

Portugal borrowed $US1.6 billion ($1.62 billion) at a lower long-term interest rate than many expected. That helped reassure investors concerned that Portugal may become the third European country to require a bailout after Greece and Ireland.

Analysts cautioned that it's still possible Portugal could need a financial lifeline if its economy slips back into recession this year.

Financial stocks led the market higher after an analyst at Wells Fargo Securities issued a report saying bank earnings should grow much faster than other companies this year. He also said banks were likely to distribute more of their earnings to shareholders as dividends.

JPMorgan Chase & Co rose 2.6 per cent to $US44.71 after the company's CEO, Jamie Dimon, told CNBC late Tuesday that the bank hopes to raise its dividend in the second quarter. JPMorgan's stock led the 30 large companies that make up the Dow Jones industrial average.

Other banks also rose. Bank of America gained 1.8 per cent to $US14.96. US Bancorp rose three per cent to $US26.82.

At the close, the Dow was up 83.56 points, or 0.72 per cent, at 11,755.44.

The Standard & Poor's 500 index had gained 11.48, or 0.9 per cent, at 1285.96.

The Nasdaq composite was 20.5 points higher, by 0.75 per cent, at 2737.33.

In Singapore shares ended marginally higher on Wednesday as investors remained cautious ahead of several key European bond auctions this week amid still-present concerns about problems in the eurozone.

The key Straits Times Index (STI) rose 3.45 points to 3,244.94. Overall volume traded was 1.87 billion shares worth S$1.69 billion. Gainers outnumbered losers 300 to 186.

Among the gainers, SingTel rose 0.7% to S$3.09 while Singapore Exchange gained 0.6% to S$8.46.

Among the banks, OCBC dropped 1.4% to S$10.14, DBS rose 0.7% to S$14.84 and UOB gained 0.1% to S$19.18.

Shayne Heffernan has issued a strong buy on Straits Asia Resources SGX:SAR with a price target of $5 in 2012.

Straits Asia is an unique company with a simple business model – mining thermal coal for export to major power utilities in Asia.

In November 2006, Straits Asia was the first coal company to be listed in Singapore and remains in that unique status.

We own 2 producing mines, both in Indonesia: Sebuku mine on Sebuku Island in South East Kalimantan, and Jembayan mine near Samarinda in East Kalimantan.

Our small head office in Singapore oversees marketing, accounting and other group corporate activities. We have a technical and administrative support office for our mines in Balikpapan and an Indonesian head office in Jakarta that handles, central government relations, tax and legal matters.

Straits Asia Group has a culture that demands us to maintain international standards and professionalism at all levels of business. We fully recognize our obligations to local communities where we mine and to the environment, demonstrated by awards we have received from country Presidents for bringing work and benefits to communities and for environmental rehabilitation.

Straits Asia Resources Limited (“Straits Asia”, SGX: SAR) is announced today that the Minister of Forestry has issued the Principle Licence (Izin Prinsip) for the Northern Leases at Sebuku.

The Izin Prinsip is the precursor to the Izin Pinjam Pakai (Borrow and Use Licence) and its main purpose is to confirm rights to conduct extraction of coal provided certain final conditions are met. The Izin Prinsip sets out the conditions and, once they are fulfilled, mining and exploration may commence in the permitted area.

The Northern Leases are a key part of Straits Asia’s long-term strategy for mining its concessions at Sebuku. The area lies immediately to the North of the mine’s Tanah Putih pit and the same coal seams are continuous into the Northern Leases.

Straits Asia already holds a general body of information about the coal and geology in the Northern Leases and expects to commence work in the Northern Leases relatively quickly after the Borrow and Use Licence is issued, which will lead to the long-awaited ramp up of production from Sebuku mine.

In Bangkok Stock Exchange of Thailand (SET) composite index on Wednesday gained 6.12 points or 0.60 per cent to close at 1,019.51 points. The market value was 42.09 billion baht, with 3.74 billion shares traded.

Top five most active values were as follows;

IVL closed at 45.00 baht, down by 3.50 or 7.22 per cent.

PTT closed at 329.00 baht, up by 10.00 or 3.13 per cent.

SCB closed at 98.25 baht, up by 0.50 or 0.51 per cent.

BANPU closed at 846.00 baht, up by 30.00 or 3.68 per cent.

IRPC closed at 5.95 baht, down by 0.10 or 1.65 per cent.

In Jakarta, JCI rose 99.64 points, or 2.9 percent, to close at 3,554.77. About 7.5 billion shares valued at Rp 6.9 trillion ($766 million) changed hands.

Gainers outnumbered decliners 197 to 53.

Praska said Indonesian stocks may advance further this week after the four-day drop because shares had been oversold on concerns about inflation.

He also said foreign investors would not leave the Indonesian market because they were confident of sound economic growth.

Among gainers, Medco Energi Internasional, Indonesia’s biggest listed oil company, jumped 4.8 percent to Rp 3,300, while Benakat Petroleum Energy advanced 2 percent to Rp 102.

Energy stocks were lifted by crude oil rising 2.1 percent to $91.11 a barrel on Tuesday in New York.

International Nickel Indonesia, the nation’s largest producer of the metal, advanced 3.3 percent to Rp 4,650 and Aneka Tambang, the No. 2 producer, soared 6.7 percent to Rp 2,400. Nickel futures surged 3.5 percent to $24,700 a metric ton in London the day before.

Toll-road operator Jasa Marga rose 1.7 percent to Rp 3,150 after its president director, Frans Sunito, said it would spend Rp 4.5 trillion on capital expenditure this year from Rp 3.1 trillion last year, Investor Daily reported.

Meanwhile, the rupiah inched up to 9,050 against the dollar on Wednesday from 9,061 the day before. Analysts attributed the gain to the news that Asia’s top two economies would buy European bonds.

In Manila Philippine Stock Exchange index added 4.86 points or 0.12 percent to 4,037.23.

The recovery was led by the industrial and mining/oil counters, which surged by 1.9 percent and 2.21 percent, respectively.

Only the interest rate-sensitive property counter traded in the red alongside increasing expectation of a monetary tightening in the latter part of this year as Asian central banks' concern shifts to rising inflation from appreciating local currencies.

Value turnover surged to P6 billion from a little over P4 billion in the last few days.

There were 91 advancers as against 55 decliners and 34 unchanged stocks.

The stocks that actively gained on heavy volume were Manila Electric Co., Cyber Bay Corp., Semirara Mining Corp., Alliance Global Group Inc., San Miguel Corp., Universal Robina Corp., Cebu Air Inc., First Philippine Holdings Corp., Metro Pacific Investments Corp., Ayala Corp., Nickel Asia Corp., Philippine Long Distance Telephone Co., Empire East Land Holdings Inc. and DMCI Holdings Inc.

On the other hand, investors sold down shares of Metropolitan Bank & Trust Co., Aboitiz Power Corp., Megaworld Corp., Manila Water Co. Inc. and Ayala Land Inc.

In Kuala Lumpur the Bursa Malaysia KLCI (FBM KLCI) rose 3.55 points or 0.23 per cent to 1,566.49, after opening 1.42 points higher at 1,564.36.

The local market started the day on a positive note as investors took cue from the higher overnight close on Wall Street.

A dealer said the announcement by the government on the 19 Entry Point Projects valued at RM67 billion under the Economic Transformation Programme, had boosted buying interest in the local market, especially in oil and gas-related stocks.

However, the gains were limited, due to some profit taking activities in banking and plantation-related stocks.

The Finance Index fell 5.70 points to 14,303.19, the Plantation Index slipped 5.44 points to 8,207.92 and the Industrial Index eased 4.64 points to 2,907.09.

The FBM Emas Index meanwhile, rose 41.13 points to 10,806.19 and the FBM70 Index jumped 118.35 points to 11,628.19.

The FBM Ace Index, however, shed 1.80 points to 4,452.57.

Advancers led decliners by 460 to 406 while 273 were unchanged, 249 untraded and 39 others suspended.

Volume declined to 2.473 billion shares worth RM2.703 billion from the 2.706 billion shares valued at RM2.637 billion on Tuesday.

Among the most active stocks, Metronic Global shed half sen to six sen and Talam Corporation inched down one sen to 11.0 sen but SAAG Consolidated was unchanged at 14 sen.

Of the heavyweights, Maybank lost six sen to RM8.88 while CIMB Group added one sen to RM8.78.

Petronas Chemicals rose four sen to RM6.02 while Genting increased 42 sen to RM11.84 but Axiata slipped one sen to RM4.87.

Oil and gas-related counters, SapuraCrest jumped 33 sen to RM3.78, KNM added 15 sen to RM3.17, Kencana gained 13 sen to RM2.86 and Dialog added five sen to RM2.21.

On the Main Market, volume fell to 2.171 billion shares worth RM2.636 billion from the 2.312 billion shares valued at RM2.550 billion on Tuesday.


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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This year in Thailand-what next?

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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