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ASEAN STOCK WATCH Asean Affairs 11 January 2013

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ASEAN Equity Preview, GT Capital, POI, Saratoga, Bangkok Bank, F&N

U.S. data showed claims for unemployment benefits rose last week, though seasonal volatility made it difficult to get a clear picture of the labor market's health.

Also, U.S. wholesale inventories rose more than expected in November and sales rose by the most in more than 1-1/2 years. The market's reaction to both reports was muted.

China's foreign trade for 2013 will be better than that of last year despite uncertainties, a General Administration of Customs spokesman said on Thursday.

Spokesman Zheng Yuesheng said global economies have launched stimulus policies to prevent growth rates from slumping, adding that China's domestic efforts to boost the growth of foreign trade will have more visible effects this year.

The export managers index for December stood at 34.2 percent, up 2.1 percentage points from November and marking the first rebound since June, Zheng said.

China will still face a hostile foreign trade environment as a result of sluggish demand, increasing production costs, fewer orders and trade protectionism, Zheng said.

China's exports rose 7.9 percent in 2012 from the previous year, while imports climbed 4.3 percent year on year, the General Administration of Customs said Thursday.

The foreign trade surplus widened to $231.1 billion last year, 48.1 percent greater than that of 2011.


Charoen Sirivadhanabhakdi extended his $7.2 billion offer to take over Singapore property and drinks conglomerate Fraser and Neave Ltd (F&N) (FRNM.SI) for the sixth time, until January 15.

Charoen is F&N's largest shareholder with a 34 percent stake, held through Thai Beverage PCL (TBEV.SI) and TCC Assets Ltd. The tycoon is trying to increase his stake in F&N to more than 50 percent to foil a rival bid by a group led by Singapore-listed Overseas Union Enterprise Ltd (OVES.SI).

The Overseas Union group made a S$13.1 billion ($10.7 billion), or S$9.08 per share, counterbid for F&N in November, higher than the Thais' S$8.88 offer in September to acquire F&N shares that they did not already own. The consortium had extended its offer to January 14.

Since the Overseas Union group announced its counterbid, F&N shares have been trading above both offer prices as investors bet that higher bids would emerge. The stock last traded at S$9.69, up around 6 percent since November 15.


Bangkok Bank Pcl, is aiming for loan growth of between 7 percent and 9 percent in 2013, reflecting the country's economic growth, President Chartsiri Sophonpanich said on Tuesday.

In December, Chairman Kosit Panpiemras said he aimed for loan growth of 6-7 percent this year and maintained a forecast for 2012 loan growth of 6-8 percent.


Saratoga Capital, a private equity fund controlled by businessmen Edwin Soeryadjaya and Sandiaga Uno, plans to take its unit through an initial public offering in the middle of this year.

The news confirms earlier media reports of an IPO this year.

“Yes, we are exploring an IPO for Saratoga Investama Sedaya for mid 2013,” Catharina Latjuba, a representative of Saratoga, told the Jakarta Globe in an e-mail on Wednesday.

However, she refused to disclose any further details including the size of the stake sale, total proceeds from the IPO and which investment banks would arrange the IPO.

“Any further details are a bit too early at this stage,” Catharina said.

Catharina was the first named Saratoga official to make any comments on the IPO plan. Calls and text messages sent by the Jakarta Globe did not get a response from officials on Tuesday.


Fitch Ratings has upgraded Malaysia's Pacific & Orient Insurance's (POI) insurer financial strength (IFS) rating to 'BBB+' from 'BBB'.

The international rating agency said on Thursday the Outlook was Stable.

"The upgrade reflects POI's improving capitalisation and continued favourable underwriting result after the realignment of business composition within the automobile sector," it said.

For FY ended Sept 30, 2012, the company's combined ratio remained healthy at below 90%, despite higher claims experience.

Fitch said the rating was based on the company's solid distribution coverage in motor insurance, its stable cost structure, and its disciplined underwriting strategy.

It expected POI's business strategy and capital management policy to remain unchanged despite the divestment in Q4 2012 of a 49% stake by its immediate parent, Pacific & Orient Bhd, to South African financial services group, Sanlam Limited (IDR 'AA-(zaf)'/Stable).

Fitch pointed out POI's conservative investment strategy enabled it to consistently maintain excellent liquidity to meet its insurance claim payments.


GT Capital Holdings Inc. sold P14.3 billion worth of shares to offshore institutional investors via private placement, making history for completing the largest ever overnight equity deal in the country.

This placement deal widened GTCap’s public float to 40 percent from 30 percent.

It raised fresh funds for investment in automotive unit Toyota Motor Philippines and other capital expenditures.

Taking advantage of a buoyant stock market valuation, GTCap sold 23.027 million shares to institutional investors at P620 per share, a 5-percent discount to the 20-day volume-weighted average in the market. Its share price has performed well since debuting on the Philippine Stock Exchange in April last year at P455 per share.

Lauro Baja, managing director of sole bookrunner UBS Philippines, said in an interview that demand for the offering hit an “unprecedented” level of $1.1 billion. Due to the strong demand, the issue was increased by $50 million from the original size of $300 million.

About 100 global investors were in the order book. About 75 percent of the investors came from Asia, 15 percent from the United States and the rest from Europe. “The quality of the book is really world-class,” Baja said.

“They hit it at the right time,” Baja said, noting that GTCapital benefited from the Philippine macroeconomic backdrop which, he said, was still “in a sweet spot.”

Also, he said the good reputation of the management team and the investors’ familiarity with the name had contributed to the successful deal.

In a disclosure, GTCap said the deal raised about P10.1 billion in primary proceeds for the company, while controlling shareholder Grand Titan Capital Holdings Inc. will generate secondary proceeds worth P4.2 billion.

The primary component of the equity deal was via a top-up structure, where Grand Titan lent its shares to allow a quicker fund-raising. It is concurrently subscribing to 16.3 million new shares to be issued by GTCap at the same price as the placement.

“We are extremely pleased with the continuous support and confidence that the global investor community has given to GT Capital since our IPO,” said GTCap chairman Arthur Ty.

“We are optimistic about the growth prospects for GTCap given the strong macro-fundamentals of the Philippines,” said GTCap president Carmelo Maria Luza Bautista.

GTCap earlier announced an agreement to acquire an additional 30-percent stake in Toyota Motors Corp. from its banking unit, Metropolitan Bank and Trust Co., for P9 billion. This will be funded with the proceeds of the private placement.

Yesterday in Asia

Tokyo closed up 0.70 percent, or 74.07 points, at 10,652.64 while Sydney gained 0.32 percent, or 14.9 points, to end at 4,723.0 and Seoul climbed 0.75 percent, or 14.99 points, to 2,006.80.

Hong Kong jumped 0.59 percent, or 135.84 points, to 23,354.31 and Shanghai added 0.37 percent, or 8.32 points, at 2,283.66.

– Singapore closed up 0.18 percent, or 5.84 points, to 3,226.25.

DBS Bank gained 0.88 percent to Sg$14.83 while conglomerate Fraser and Neave, a takeover target between a Thai tycoon and an Indonesian rival, dropped 0.10 percent to Sg$9.69.

– Taipei rose 0.94 percent, or 73.0 points, to 7,811.64.

Taiwan Semiconductor Manufacturing Co. was 1.0 percent higher at Tw$101.0 while Fubon Financial Holding added 3.33 percent to Tw$37.2.

– Jakarta slipped 1.04 percent, or 45.56 points, to 4,317.36.

Palm oil producer Astra Agro Lestari fell 3.22 percent to 19,550 rupiah and car maker Astra International lost 4.55 percent to 7,350 rupiah, while food manufacturer Cahaya Kalbar rose 3.27 percent to 1,580 rupiah.

– Kuala Lumpur fell 0.32 percent, or 5.36 points, to 1,684.57.

IOI lost 1.8 percent to 5.03 ringgit, Sime Darby shed 0.3 percent to 9.57 while British American Tobacco gained 0.4 percent to 61.10.

– Bangkok lost 1.23 percent, or 17.47 points, to 1,405.99.

Telecoms company Advanced Info Service fell 1.99 percent to 197 baht, while oil firm PTT dropped 1.21 percent to 327 baht.

– Manila fell 1.19 percent, or 72.61 points, to 6,018.57 as profit-taking ended a seven-session rally.

GT Capital Holdings dropped 0.89 percent to 666 pesos.

Ayala Corp. dipped 0.55 percent to 547 pesos and SM Investments Corp. shed 2.85 percent to 920 pesos.

– Wellington ended 0.38 percent higher, adding 15.54 points to 4,119.08.

Fletcher Building was up 2.6 percent at NZ$8.67 and Trade Me rose 1.8 percent to close NZ$3.98.

– Mumbai ended flat, down 0.02 percent at 19,663.55, after some investment banks warned of slowing growth in emerging markets.

Indian engineering giant BHEL fell 2.19 percent to 231.8 rupees while ailing Kingfisher Airlines rose 9.96 percent to 14.79 percent.

Shayne Heffernan Ph.D.
Economist/Hedge Fund Manager

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This year in Thailand-what next?

AseanAffairs   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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