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ASEAN STOCK WATCH Asean Affairs   28 January 2011

ASEAN will finish the week well

Shayne Heffernan

ASEAN will finish the week well with strong local economic indicators and a solid lead from Wall St overnight.

The S&P 500 faces technical resistance near 1300, an area where closing and session highs clustered during August 2008. Technical analysts also view 12,000 on the Dow as a possible sell trigger as the blue-chip average closes in on nine straight weeksof gains.

Caterpillar shares rose 1.5 percent to $US97.15 after it reported a stronger-than-expected quarterly profit.

Movie rental company Netflix Inc soared 15 per cent after hitting a lifetime high of $US211.30 and electronics test equipment maker Teradyne Inc jumped 10.5 percent to $US16.17. Both posted results Wednesday after the close.

The market is being driven by earnings.

Shayne Heffernan's Best Buys today are ASEAN Stocks, Keppel, Sembcorp, Timah, San Miguel

In Kuala Lumpur the index added 6.96 points or 0.46 percent on Thursday.


Leading Movers were CIMB (+8 sen to RM8.42), PCHEM (+16 sen to RM6.12), KLK (+40 sen to RM21.30), SIME (+4 sen to RM9.24) and PTGAS (+18 sen to RM11.38).

Lagging Movers were AXIATA (-1 sen to RM4.70), GENTING (-2 sen to RM10.90), MAYBANK (-1 sen to RM8.70), BAT (-10 sen to RM48.10) and RHBCAP (-3 sen to RM8.42).

Market breadth was positive with 538 gainers as compared to 238 losers. Trading volume decreased to 1410.19 mil shares worth RM2216.60 mil as compared to Wednesday’s 1419.50 mil shares worth RM2601.47 mil.

The Finance Index rose 0.37 percent to 13978.88 points, the Properties Index added 1.25 percent to 1092.55 points and the Plantation Index gained 1.04% to 7917.61 points. The market traded within a range of 5.07 points between an intra-day high of 1530.81 and a low of 1525.74 during the session.

In Manila the Philippine Stock Exchange index added 58.85 points, or about 1.5 percent, to finish at 3,990.49. The rebound was led by San Miguel Corp., whose share price went up by 10.9 percent to P178 a share.

The market was led by the property, investment firms and industrial sectors.

Last week, the market was spooked by reports that the BIR would slap a capital gains tax of up to 10 percent on share transactions of companies falling the minimum public float.

Value turnover amounted to P7.46 billion. Given the prospective resolution of tax concerns, foreign investor appetite improved, resulting in net foreign buying of around P1 billion for the day.

There were 87 advancers against 48 decliners, while 46 stocks were unchanged.

In Bangkok the Stock Exchange of Thailand (SET) composite index went up 8.64 points or 0.88 percent to close at 986.71 points at the end of trading session on Thursday afternoon. The trade value was 29.09 billion baht.

Siam Cement Group (SCG) may increase its five-year investment budget from 100 billion baht as the country’s top industrial conglomerate is spreading its investments outside Southeast Asia with ongoing talks to acquire a petrochemical company in the US.

SCG projects total revenue will rise by about 10 percent this year. Yesterday, it reported a 26 percent jump in total revenue to 301.3 billion baht for 2010, well above the 10 percent forecast.

The industrial conglomerate also posted a record-high net profit of 37.38 billion baht last year, a rise of 54 percent year-on-year with earnings growth in most key businesses and dividends.

SCG Chemicals accounted for almost half of the group’s revenue, with sales of 144 billion baht, up 43 percent. Its earnings surged 80 percent to 22.6 billion, thanks to an 8.8-billion-baht extraordinary profit from the divestment of its shares in PTT Chemical in the final quarter.

The paper business earned 51.7 billion baht in revenue, rising 21 percent, as net profit grew 53 percent to 3.49 billion.

The cement unit, meanwhile, reported a 3 percent drop of earnings to 6 billion despite the 5 percent increase in revenue to 48.95 billion.

In last year’s fourth quarter, the group’s earnings jumped by 213% to 16.67 billion baht on sales of 76.25 billion, an increase of 23% from the same period of 2009.

Top five most active values were as follows;

PTT closed at 344.00 baht, up 7.00 baht (2.08 percent)

BANPU closed at 764.00 baht, up 14.00 baht (1.87 percent)

SCC closed at 316.00 baht, up 3.00 baht (0.96 percent)

PTTCH closed at 142.00 baht, up 4.50 baht (3.27 percent)

IVL closed at 40.00 baht, up 1.50 baht (3.90 percent)

In Singapore the STI was flat waiting on new leads from international markets.The Straits Times Index (STI) finished at 3,219.83.

Shayne Heffernan strong buy SembCorp Marine gained 14 cents to S$5.52, while the other strong buy Keppel Corp moved up 20 cents to S$12.12 after it announced winning a contract worth US$416 million from Discovery Offshore to construct two jack-up rigs.

Traders pointed to resistance in the STI at around the 3,220 to 3,225 level.

Shayne Heffernan strong buy Shipping firm Neptune Orient Lines rose 8 cents to S$2.26, as investors continued Wednesday’s bargain hunting, following a sharp 6.4 percent drop in the company’s shares over the past five sessions.

In the broader market, losers outnumbered gainers by 258 to 203. Volume totaled 1.58 billion shares worth S$1.68 billion.

Shayne Heffernan has issued a strong buy CNOOC Limited (ADR) NYSE:CEO, Sinopec Shanghai Petrochemical Co. (ADR) NYSE:SHI , China Unicom (Hong Kong) Limited (ADR) NYSE:CHU

China has issued a directive for firms to increase the dividends paid to as high as 15 percent, the finance ministry said , a move that will harness a bigger share of their profits for government spending on everything from education to the military.

In a statement on its website, the ministry said it was mainly firms in the resource, power and tobacco sectors that would pay the highest dividends at 15 percent of their after-tax profits, up from 10 percent now.

Shayne Heffernan

These companies include PetroChina, China National Offshore Oil Corp (CNOOC),Sinopec Corp, China National Tobacco Corp and mobile operator China Unicom.

Companies that fall into the next dividend bracket of 10 percent include most steelmakers such as Baosteel and airlines including Air China.

Firms with the smallest dividend burden — at 5 percent — include weapon and heavy machinery makers such as China National Nuclear Corp and China Aerospace Science Industry Corp.

Until now, most Chinese state firms have paid 5 percent dividends. The increased rates, which have been approved by the State Council, or cabinet, will start from next year.

The ministry said only two firms need not pay any dividends: China Grains Reserves Corp and China Cotton Reserves Corp.

Many development organizations including the World Bank have called on China’sgovernment to increase its share of state-owned firms’ profits so as to plough the money into social spending.

In Jakarta the JCI rose 12.91 points, or 0.4 percent, to close at 3,514.62. About 4.8 billion shares valued at Rp 6 trillion ($666 million) changed hands. Gainers outnumbered decliners 114 to 93.

The rupiah inched up to 9,022 against the US dollar as the market closed on Thursday from 9,026 the day before. It rose amid speculation that Bank Indonesia will raise interest rates.

Bumi Resources, Asia’s biggest exporter of power-station coal, advanced 0.8 percent to Rp 3,025.

Perusahaan Perkebunan London Sumatra Indonesia, Indonesia’s second-biggest listed plantation company, rose 0.4 percent to Rp 12,000.

Shares rose after July-delivery rubber advanced as much as 3.2 percent to 474.8 yen per kilogram ($5,722 per metric ton) on the Tokyo Commodity Exchange.

International Nickel Indonesia, the nation’s largest producer of the metal, gained 0.5 percent to Rp 4,875. Nickel gained 0.5 percent to $26,640 per ton as the market opened on the London Metal Exchange on Thursday.

Timah, Indonesia’s biggest tin producer, jumped 4.6 percent to Rp 2,825. Tin for three-month delivery gained 1.5 percent to $28,625 a metric ton in London on Wednesday.


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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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.

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