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ASEAN STOCK WATCH Asean Affairs   24 January 2011

In Asia in February

Shayne Heffernan

Three words sum up my Asian outlook this week, buy, buy, buy. Singapore, Thailand,

Kuala Lumpur and Jakarta all look over sold this week. Singapore will get a lift from strong performance in agriculture, shipping and financial services.

Singapore is also rolling out new services in 2011 and is attracting world class IPO’s like Hutchinson Whampoa.

Trading Outlook

Goldman Sachs Group, Inc. NYSE:GS, Freeport-McMoRan Copper & Gold Inc. NYSE:FCX, ConocoPhillips NYSE:COP, Chevron Corporation NYSE:CVX, NYSE:GS, NYSE:FCX, NYSE:CVX, S&P 500

Last week we saw a much needed slowdown around the World. Many markets are now near multi year highs and investor sentiment has seen its strongest test of the rally and the rally still seems to have some legs.

“Investors are tough this earnings season, good results are not getting much attention, average results are being punished.” Shayne Heffernan said today.

With market sentiment so fickle it is not a surprise that the S&P 500 just ended its first down week in eight after some very average news from Goldman Sachs and Freeport McMoRan helped the index lower.

This week energy giants like Chevron Corp and ConocoPhillips will be reporting and once again expectations are running high, providing plenty of room for disappointment, this is a week to buy the downtrodden.

S&P 500 analysts’ earnings estimates for the current quarter were revised up 1.16 percent over the last 90 days, according to data from Heffernan Capital Management

Earnings estimates in the materials sector were raised 5.7 percent; in energy, they rose 4.8 percent, and in technology, 2.3 percent.

These sectors led the falls last week, and may well lead the way early this week making them the best buys on Wall St. The S&P index of materials shares lost 3.3 per- cent over the week.

Global Markets will also look to Wednesday afternoon from the Federal Open Market Committee, which Heffernan Capital Management believe may declare that there are signs of improvement in the U.S. economy, most importantly with consumers and factories.

Other Economic data this week include consumer confidence, durable goods orders, January consumer sentiment, and fourth-quarter USA gross domestic product.

Trading in February

February has proven to be historically weak in terms of Wall St. and that may keep markets around the world fairly flat.

Should the market drift on bad earnings in February it could fall as much as 7 percent according to HCM’s Shayne Heffernan, the upside is somewhat limited, this is a month to be buying quality on the dips.

The bottom of the S&P 500 estimates appears to be around 1,227 at this point our technical analysts see as strong support for the market, anything under 1239 would be an ideal entry point on dividend and other large caps.

For now 1,240 would be the most probable stop for the benchmark, said Shayne Heffernan. That coincides with the current 50-day moving average and the 23.6 percent retracement of the rally from September 1 to the recent high on January 18.

Heffernan Capital Management remains bullish on the Index regardless of the first weekly drop in eight weeks. Shayne Heffernan says the S&P could reach 1,327 by the middle of March before seeing another sell off.

Remember when you are trading this week that February is on the horizon, February is historically the second weakest month of the year for the S&P 500, with the index down 0.2 percent on average for that month since 1950.


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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