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ASEAN STOCK WATCH Asean Affairs   6 January 2011

ASEAN Markets will rally

Shayne Heffernan

ASEAN Markets will rally today, Best Buys, Genting, Golden Agri, PTTEP, IRPC, IVL, Sembcorp marine

Signs that the economy is improving weakened demand for low-risk investments. Treasurys prices slid, pushing their yields higher. The yield on the 10-year Treasury note rose to 3.49 per cent from 3.33 per cent late Tuesday. The yield helps set interest rates on many kinds of loans including mortgages.

The higher rates in the Treasury market helped push the dollar up against other currencies. The dollar rose 1.1 per cent against an index of six other currencies. The Dow was 40.57 points higher in late afternoon trading, by 0.35 per cent, at 11,731.75.

The Standard & Poor's 500 index was up 6.74, or 0.53 per cent, at 1,276.94. The Nasdaq rose 19.95, or 0.74 per cent, to 2,701.2.

Financial companies led the 10 groups that make up the S&P index with a one per cent gain. Utilities did the worst, losing 0.7 per cent.

Europe's main stock markets come off early lows after a better-than-expected US jobs report, with London managing to break into positive territory, but Paris and Frankfurt still fell on profit-taking.

London's FTSE 100 index of leading shares advanced 0.50 per cent at 6043.86 points but in Paris, the CAC 40 slipped 0.29 per cent to 3904.61 points and in Frankfurt the DAX fell 0.51 per cent to 6939.82 points.

Lower commodity prices and disappointing earnings news sent mining and retail stocks down, dealers said.

British entertainment chain HMV and fashion retailer Next revealed that their sales fell sharply during the crucial Christmas period because of heavy snow and tough trading conditions. HMV also said it would shut 60 of its British stores over the next 12 months as it continues to streamline the business.

Investors were also still unnerved by Tuesday's report that inflation in the EU is now running at 2.2 per cent, the first time in two years that it has gone above the European Central Bank's red line of 2 per cent.

But European stocks began to rally after private payrolls firm ADP reported that the US private sector added 297,000 jobs in December, more than three times the number created in November.

Swiss stocks ended the day up 0.38 per cent and Milan finished nearly flat with a 0.02 per cent gain.

Amsterdam slid 0.44 per cent, Brussels ended down 0.61 per cent, Lisbon fell 0.68 per cent and Madrid dropped 0.88 per cent.

Yesterday the Stock Exchange of Thailand (SET) composite index went up 6.55 points or 0.63% to close at 1,048.96 points at the end of trading session on Wednesday morning. The trade value was 18.28 billion baht.

Today the SET should break 1050, best buys PTTEP, UVAN, IVL

Top five most active yesterday were as follows;

TMB closed at 2.42 baht, up 0.04 baht (1.68%)

BANPU closed at 862.00 baht, up 20.00 baht (2.38%)

SCB closed at 106.50 baht, up 2.00 baht (1.91%)

PTT closed at 331.00 baht, up 1.00 baht (0.30%)

IVL closed at 54.50 baht, down 1.75 baht (3.11%)

Perennial intends to list a business trust in Singapore that will comprise mostly shopping malls in China, said the sources, who declined to be named because the matter has not been made public.

Perennial Real Estate, a firm set up by former CapitaLand retail chief Pua Seck Guan, has hired Goldman Sachs, DBS and Standard Chartered to help it raise as much as S$1 billion ($777 million) in a property trust IPO, sources with knowledge of the deal said on Wednesday.

Pre-marketing of the deal is scheduled to begin later this month with the formal launch of the initial public offering slated for the end of March, the sources added.

A spokeswoman for Perennial, which is involved in the development and management of malls as well as property funds, said the firm had businesses in China, India and Singapore and it “continues to explore opportunties in these markets”.

The three banks either declined comment or could not be reached.

Under Singapore law, a real estate investment trust (REIT) faces restrictions on its level of borrowings and is obliged to distribute at least 90 percent of its income.

By putting its assets in a business trust, Perennial has greater scope to invest in properties under development and retains the flexibility of paying out a smaller portion of rental income to shareholders, two of the sources said.

Pua, who is widely credited with building CapitaLand’s malls business, resigned from Southeast Asia’s biggest developer in September 2008, sparking a 7 percent fall in the firm’s share price.

His firm is currently leading the re-development of three commercial properties in Singapore and backers of his unlisted China funds include Beijing Hualian Group. Besides China and Singapore, Singapore-based Perennial, whose management includes several former CapitaLand executives, is also active in India where it advises property giant DLF on the retail business.

Based on the indicative timeline, Perennial’s IPO will come to market around the same time as Mapletree Commercial Trust, which plans to raise over $1 billion through a REIT IPO in Singapore.

Mapletree Commercial Trust, whose assets include Vivocity, Singapore’s largest mall, is managed by Mapletree Investments, a wholly owned unit of state investor Temasek . DBS and Goldman Sachs are also on the Mapletree deal, along with Citigroup and Deutsche Bank.

In Singapore the STI closed higher on Wednesday although investors were mostly cautious.

On the street traders told Heffernan Capital Management that the market was awaiting fresh data from the US especially the unemployment report due on Friday The ST index edged up 3.96 points to 3,254.25 on a volume of 2,028 million shares.

In the broader market, there were 247 advances against 244 losers.

The softer trend in regional stocks affected sentiment in the local exchange and concerns over the European debt situation continued to hang over the market.

Renewed interest in Global Logistic Properties (GLP) gave some support but sentiment was dampened by profit-taking on oil and commodity-related plays.

Shares of warehouse operator GLP attracted buying interest after it said it will buy a 53 percent stake in China’s Airport City Development Ltd. The counter added 2 cents to end at $2.16.

Golden Agri-Resources fell 1.5 cents to 80 cents while First Resources lost 4 cents to $1.55.

Among other active counters, Genting Singapore fell 4 cents to $2.19 while CapitaLand added 10 cents to $3.86.


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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