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ASEAN STOCK WATCH Asean Affairs   19 January 2011

ASEAN Stock Outlook

Shayne Heffernan

Best buys in ASEAN today, Bank Danamon, Philex Mining, Axiata, SGX, PTT, IVL

The Stock Exchange of Thailand (SET) composite index on Tuesday gained 1.35 points or 0.13 per cent to close at 1,024.54 points. The market value was 26.16 billion baht, with 4.09 billion shares traded.

Food – Auto – Electronics – Energy – Big Players in Thailand Next Year

The industrial sectors expected to drive Thailand economic growth next year are processed foods, automobiles and auto parts, electronic components, hard-disc drives and parts (HDD), and energy productions, said the secretary-general of the Board of Investment (BoI), Atchaka Sibunruang.

BoI expected to grant privileges for the applications valued at approximately 400 billion baht, the same level as this year, if political dissent remains moderate and BoI incentive policy remains stable.

Major impact on investment in 2011 is also whether the large upstream steel project worth hundreds of billions of baht can occur with the support from the government.

In the first 11 months of this year BoI granted privileges for investment totaled 378 billion baht, a 6% increase year on year, while the number of applications totaled 1,400 projects, a 42% increase from last year.

“Second-Wave” Investment from Japan

Siam Cement Group’s president and CEO Kan Trakulhoon said Japan was in a second-wave period for investing overseas thanks to the strengthening Japanese yen and Saturation of domestic consumption. “More investment will come from small and medium-sized Japanese enterprises (SMEs).

Top five most active values were as follows;

PTT closed at 334.00 baht, up by 6.00 or 1.83 per cent.

IVL closed at 44.50 baht, down by 0.75 or 1.66 per cent.

SCB remained at 99.00 baht.

PTTCH closed at 150.00 baht, up by 0.50 or 0.3 per cent.

TRUE closed at 6.95 baht, down by 0.15 or 2.11 per cent.

In Singapore the Straits Times Index added 0.3% to 3,249.58 yesterday.

Singapore Exchange (SGX) will remove the 90-minute lunch break and will introduce continuous all day trading from 9am to 5pm from March 1.

SGX said in a statement that this will enhance access to companies listed on the exchange and its trading hours will also overlap more with those of other Asian exchanges.

The exchange added that this will allow investors, especially those who trade pan-Asian securities, to respond to regional market movements and news flow.

Analysts said this will translate into higher daily turnovers for the stock exchange.

With continuous trading hours, SGX said investors can react quickly to market news and price movements. It added with an extra 90 minutes of trading, daily trading volumes could rise by up to 12 per cent.

SGX is the latest stock exchange to do away with the lunch break. The SGX derivatives market is already trading continuously.

Shayne Heffernan of Ebeling Heffernan has confirmed a strong buy issued on  UOB Bank Singapore with a price target of $26 in 2011.

United Overseas Bank Limited (UOB or the Bank) is principally engaged in the business of banking in all its aspects, including the operation of an Asian Currency Unit under the terms and conditions specified by the Monetary Authority of Singapore (MAS).

The principal activities of its major subsidiaries include commercial banking, merchant banking, leasing, insurance, investment, investment management, gold/futures dealing, property, property management and travel.

The Bank provides a range of financial services through its global network of branches, offices, subsidiaries and associates, personal financial services, private banking, commercial and corporate banking, investment banking, corporate finance, capital market activities, treasury services, futures broking, asset management, venture capital management, insurance and stockbroking services.

In August 2009, the Bank announced that its subsidiaries, UOB.Com Pte. Ltd. and FEB Realty Company Pte Ltd commenced voluntary liquidation and since then has continued to consolidate operations.

The FBM KLCI index lost 4.45 points or 0.28% on Tuesday.

Actively traded stocks include SAAG, TAMBUN, HWGB, KUB, TALAM, MULPHA, SPSETIA-WB, KINSTEL, RAMUNIA and IRCB-WA. Trading volume decreased to 1703.63 mil shares worth RM2020.36 mil as compared to Monday’s 1906.94 mil shares worth RM2201.39 mil.

The Losers GENM (-8 sen to RM3.51), PETCHEM (-7 sen to RM6.28), TENAGA (-4 sen to RM6.49), AXIATA (-2 sen to RM4.90) and AMMB (-5 sen to RM6.95).

The Winners were KLK (+18 sen to RM22.76), TM (+2 sen to RM3.77), PPB (+8 sen to RM17.50), MAXIS (+1 sen to RM5.40) and DIGI (+2 sen to RM25.30). Market breadth was negative with 174 gainers as compared to 731 losers.

The Finance Index fell 0.33% to 14338.34 points, the Properties Index dropped 2.13% to 1125.87 points and the Plantation Index down 0.26% to 8208.92 points. The market traded within a range of 8.51 points between an intra-day high of 1576.42 and a low of 1567.91 during the session.

In Jakarta the JCI rose 12.92 points, or 0.4 percent, to close at 3,548.65. About 4.2 billion shares worth Rp 4.2 trillion ($466 million) changed hands. Gainers outnumbered decliners 113 to 93.

Indika Energy, Indonesia’s third-largest coal producer, gained 1 percent to Rp 4,875, while coal miner Harum Energy rose 2.2 percent to Rp 9,250.

Shares rose after thermal coal prices hit their highest since September 2008, jumping 5.1 percent to $138.50 per metric ton on Friday at the port in Newscastle, Australia, the benchmark for Asia.

Mining firm Aneka Tambang rose 2.2 percent to Rp 2,375. Its shares gained as three-month copper rose 0.6 percent to $9,687 per metric ton as the market opened on the London Metal Exchange on Tuesday.

Bank Danamon Indonesia, the nation’s sixth-largest lender by assets, soared 11.2 percent to Rp 5,950.

Bahana Securities analyst Teguh Hartanto said the shares rose amid speculation that DBS Holdings would buy a stake in the bank, though Danamon finance director Vera Eve Lim said there were no plans for a change in the lender’s ownership.

Krakatau Steel, Indonesia’s largest steel maker, rose 0.9 percent to Rp 1,170.

Marketing director Irvan Kamal Hakim said 2011 revenue could rise to as much as Rp 21 trillion from last year’s estimate of Rp 18 trillion to Rp 19 trillion, Bisnis Indonesia reported.

The rupiah rose to 9,053 against the US dollar from 9,078 on Tuesday, with investor confidence growing after Moody’s Investors Service upgraded the government’s debt ratings on Monday.

“The market reacted positively to the rating review because it underscores the fact that the Indonesian growth story is still solid,” said Lindawati Susanto, head of foreign-exchange trading at Bank Resona Perdania.

“However, the reaction wasn’t as good as we expected because investors are still watching for inflation.”

In Manila the Philippine Stock Exchange index added 75.57 points or 1.82 percent to 4,072.59.

The most battered sectors were the industrial, holding firms, property and financial counters, which slid by 3.02 percent, 2.53 percent, 1.9 percent and 1.42 percent, respectively.

Only the mining/oil counter bucked the downtrend, rising by 1.7 percent.

There were 105 decliners that overwhelmed 44 advancers while 38 stocks were unchanged.

Value turnover amounted to P5.15 billion.

Investors cashed out of Megaworld Corp., Metropolitan Bank & Trust Co., Manila Electric Co., Filinvest Land Inc., SM Investments Corp., DMCI Holdings Inc., Alliance Global Group Inc., Energy Development Corp., San Miguel Corp., Aboitiz Power Corp., Cebu Air Inc., APC Group Inc., Cyber Bay Corp., Bank of the Philippine Islands and Universal Robina Corp.

Among the few stocks that bucked the downturn were Philex Mining Corp., Belle Corp., Leisure & Resorts World Corp. and Lepanto Consolidated Mining Co.


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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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.

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