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ASEAN STOCK WATCH Asean Affairs   14 January 2011

ASEAN Market Outlook

Shayne Heffernan

ASEAN markets should slow a little today but still should remain positive, Jakarta has been oversold and should rebound, best buys today are Astra Agro Lestari, Garuda IPO.

Overnight in USA trading a decline in the US dollar helped limit stock losses. The greenback lost 1.2 per cent against an index of six currencies after successful bond auctions by Spain and Italy pushed the euro higher. The US dollar's slide helps US companies that rely on exports by making their prices more competitive overseas.

The Dow Jones industrial average was down 23.54 points, or 0.2 per cent, at 11,731.9 at the close. The Standard and Poor's 500 had lost 2.2 points, or 0.17 per cent, at 1283.76. The Nasdaq composite fell 2.04 to 2735.29.

In one sign of how mixed trading was, half of the 10 company groups that make up the S&P 500 rose while the other half fell. Industrial companies had the largest move, gaining 0.3 per cent.

Marathon Oil Corp rose 8.1 per cent to $43.83 after the company said it would spin off its refining and marketing businesses. A day earlier ITT Corp, a large defence conglomerate, announced its own plans to split up into three separate companies.

Intel Corp reports results after the market closes. Analysts are expecting that the chipmaker's income rose. One question facing the company is whether tablet computers like Apple Inc's iPad are hurting sales of PCs.

Share prices on the Singapore Exchange closed higher on Thursday, with the benchmark Straits Times Index (STI) edging up 10.93 points, or 0.34 percent, at 3,255.87.

A total of 2.06 billion shares changed hands on a market turnover of 1.68 billion Singapore dollars (1.3 billion U.S. dollars).

Flagship carrier Garuda Indonesia on Thursday began a series of investor meetings in Singapore to gauge demand for its initial public offering.

Garuda president director Emirsyah Satar said the airline’s plans received a warm response.

“We are meeting with 26 institutions in Singapore,” he said from the city-state. “So far the response is positive. However, don’t ask about a price range. We did not talk about price but value.”

Singapore is the company’s first stop as it tries to woo international investors, with meetings also planned for Hong Kong, London and New York.

The Garuda road show started on the same day Mandala Airlines grounded its fleet due to financial problems, though Emirsyah said investors shrugged off the news.

The Stock Exchange of Thailand (SET) composite index on Thursday moved up 15.57 points or 1.35 percent to close at 1035. 08 points.

The Stock Exchange of Thailand (SET) composite index could soar above 1,700 points, but high fuel prices and China's potential economic slowdown could slow the Thai economy, Finance Minister Korn Chatikavanij said on Thursday.

"I believe Thai stocks will be on the rise and there is certainly a chance that the index will reach 1,754 points, but I cannot say when.

"The SET is one of the two stock markets in Asia that have yet to reach their peaks following the tom yum gung economic crisis [in 1997]," Mr Korn said.

He said the Thai bourse had risen from 300 to over a thousand points in two years and it would not be that surprising if increases by 300 points a year because companies had performed well while the economy continued expanding.

However, the Thai economy and stock market would be affected if China's economic growth for this year is a six per cent ,after it grew eight to nine per cent previously.

He said the measures to control foreign capital inflow would not affect the SET as the baht's value had already weakened to 30 baht per US dollar.

"I think investors are more worried about fuel prices because further depreciation of the baht would hit the economy," he said.

The Bank of Thailand Monetary Policy Committee’s decision to raise the policy interest rate by 0.25 percentage points to 2.25 per cent to curb inflation indicated that the central bank was clearly concerned about inflation.

Some 2.92 billion shares worth 39.06 billion baht (about 1.30 billion U.S. dollars) changed hands.

The Malaysia stock market ended higher on Thursday. The Kuala Lumpur Composite Index (KLCI) rose 5.07 points or 0.32 percent to 1,571.56, and the Emas was at 10,854.89 up 48. 69 points or 0.45 percent.

Turnover increased to 2.70 billion shares worth 3.00 billion ringgit Malaysia (981.68 million U.S. dollars).

In Manila, Philippine Stock Exchange index closed higher for the second time this week at 4,070.11, a gain of 32.88 points. The broader all-share index was also up by 0.35 percent or 10.75 points to 3,022.66.

Trading volume reached 4.4 billion shares valued at P6.76 billion ($152 million) with 93 issues advancing, 52 declining and 39 were unchanged.

Of the six counters, only the industrial sector bucked the buying momentum and finished the session 0.07 percent lower.

DBP-Daiwa Securities, Inc. said there was more buying " conviction" in today's trading on the back of positive Philippine exports data which the government reported to have grown by 11.2 percent to $4.13 billion in November.

This brings 11-month figure to $47.22 billion, already surpassing the government's full-year target by $4 billion.

The easing debt concern in Europe also helped improve investors ' sentiment after news that Portugal was able to successfully conduct a bond auction.

"(This) lifted the spirits of investors in the region, which eased concerns over the lingering debt woes in neighboring countries," DBP-Daiwa Securities, Inc. said.

"In our view, investors will continue to be cautiously optimistic as the market remains to be sensitive on inflationary issues given the volatility of commodity prices in the global market," it added.

But as seen from Wednesday and today's performance, investors seem to have the appetite to accumulate oversold issues especially after the local index touched the psychological level of 4,000.

Today, most stocks in the 30-company index closed higher. There was rotational buying on beat down stocks such as property firm Robinsons Land Corp. and Aboitiz Power, while Manila Electric Co. and Jollibee Foods Corp. ended lower on profit-taking.

In Jakarta the Index climbed for a second straight day despite profit-taking dominating the second session of trading.

The index rose 0.3 percent to close at 3,564.94 after climbing more than 2 percent in the morning session on Thursday.

About 4.9 billion shares worth Rp 6.9 trillion ($766 million) changed hands. Decliners outnumbered gainers 119 to 93.

Adhi Karya gained 7.1 percent to Rp 900 after the state builder said it had won three contracts worth a total of Rp 902.7 billion to build coal-fired power plants.

Astra Agro Lestari, Indonesia’s largest listed plantation company, surged 3.4 percent to Rp 25,800. Palm oil futures rose 1.3 percent to 3,698 ringgit ($1,210) per metric ton in Kuala Lumpur.

Martina Berto, a cosmetics maker, dropped 10.8 percent to Rp 660 on its trading debut. The company sold 355 million shares at Rp 740 each, with proceeds reaching about Rp 262 billion, during its initial public offering.

Analysts said the company’s shares were relatively expensive and that few investors were interested in cosmetics. It set its prices while the JCI was soaring at the 3,600 to 3,700 level.

The rupiah rose to 9,048 against the US dollar as of the market’s close on Thursday.


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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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.

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