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ASEAN STOCK WATCH Asean Affairs 15 January 2013

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Economic activity is picking up or steadying in the United States, the euro zone and in China, the OECD said on the basis of leading indicators of activity in the main industrialized economies.

“Composite leading indicators point to stabilizing economic growth in most major economies,’’ the Organization for Economic Cooperation and Development said.

The OECD's monthly indicator summarizing signals from economies showed that growth is “firming’’ in the United States, that a downturn in the euro zone is “stabilizing’’ and that there are “tentative signs of a turning point [upwards] in China.’’

In the OECD area, which comprises 34 countries, growth is “firming,’’ the OECD concluded.

In the United States and UK, which is not a member of the euro zone, the overall indicator “continues to point to economic growth firming,’’ the OECD said. “In China and India, signs of a turning point are more marked than in last month's assessment.’’

The indicators for Italy, Germany, France and the eurozone as a whole “point to a stabilization in growth prospects,'' it said. “Likewise, in Brazil and Japan, tentative signs of stabilizing growth are emerging.’’

But the figures for Canada and Russia “continue to signal weak growth prospects,’’ the OECD said.


Golden-Agri told the Singapore stock exchange last month it appointed Hickman as its new head of global vegetable oils and oilseeds starting on Jan 2 although it did not say in the statement if his team would follow.

Golden-Agri's subsidiaries include Jakarta-listed SMART TBK , which manages all of Golden-Agri's oil palm plantations and expects 2013 output to rise as much as 10 percent on the year to about 2.4 million tonnes.

Five former Cargill traders have joined Singapore-listed palm oil firm Golden-Agri Resources Ltd early this year, a source with direct knowledge of the matter told Reuters on Monday.

The source, who asked not to be identified as he was not authorised to speak to the media, said the four traders and veteran dealer Paul Hickman started trading last week.

Indonesia's Widjaja family controls both firms, which dominate the Indonesian plantation sector, together with Singapore-listed competitors Indofood Agri Resources and Wilmar International.


The peso fell on the first trading day of the week as investors sold some of their portfolio assets to generate gains from the local currency’s rise last week.

Closing 5 centavos weaker than the finish of 40.61:$1 on Friday, the peso ended Monday’s trading at 40.66 against the greenback.

Intraday high hit 40.58:$1, while intraday low settled at 40.675:$1.

Volume of trade amounted to $538.6 million compared with $1.13 billion previously.

Traders said some investors resorted to profit-taking, encouraged by the rise of the local currency last week to its highest in nearly five years.

They said the peso might remain firm against the US dollar this year as the favorable sentiment on the Philippine economy would bring in more inflows, such as in the form of foreign portfolio investments and foreign investments in the country’s services sector.


Nok Air chief executive Patee Sarasin said it is all a part of the eight-year-old carrier's strategic plan to raise billions of baht in fresh capital to support growth.

Details of the planned IPO have yet to be finalised, though Mr Patee said as much as a 30% stake in the company would be offered with existing shareholders' holdings reduced pro rata.

Nok Air's IPO plan is being firmed up as the airline posted an unaudited net profit of 480-500 million baht, a major turnaround from 2011 when its operation was hit by the great flood in October and November.

Nok Air also plans to resume international services this year after they nearly pushed the airline into bankruptcy five years ago. It suspended loss-making international flights to Vietnam and India as part of a turnaround programme, but now wants to relaunch in two countries _ Myanmar and China.


 Hong Leong Financial Group Bhd (HLFG) has launched a conditional voluntary takeover offer to acquire all the shares not already owned by them in Hong Leong Capital Bhd (Hong Leong Cap) at cash offer price RM1.71 per share.

The offer price works out to a 20.4% premium over Hong Leong Cap's last traded price of RM1.42 per share before it was suspended last Friday.

HLFG currently owns 79.1% or 195.3 million shares in Hong Leong Cap.

“HLFG does not intend to maintain the listing status of Hong Leong Cap and does not have intention to undertake any steps to address the shortfall in its public shareholding spread requirement,” said the notice of the takeover.

It is understood that this exercise is part of the group restructuring that should reduce the number of the listed financial entities under the Hong Leong umbrella and also see the investment bank, which is currently parked under Hong Leong Cap into Hong Leong Bank Bhd.


Pertamina Geothermal Energi, a subsidiary of Pertamina, announced on Saturday that it has broken ground on two geothermal projects, which would increase the country’s electricity generation capacity by 50 megawatts.

Pertamina Geothermal Energi will invest about $105 million to add another 30 megawatts to its Kamojang geothermal power plant in the Garut district of West Java, company spokesman Adiatma Sardjito said on Sunday.

The current capacity at the Kamojang geothermal plant, which has been in operation since 1982, is 200 megawatts, with four turbines already in operation.

“The power plant [expansion] is expected to commence operations in 2014,” Adiatma said.

The company also broke ground on the development of geothermal assets in Tomohon, North Sulawesi, which would supply energy to the nearby Lahendong 20-megawatt power plant owned by state utility firm Perusahaan Listrik Negara.

Adiatman said the investment cost would be around $60 million. He added that the geothermal assets have a potential to generate 300 megawatts of electricity.

Husen, director of upstream business at Pertamina, said in a statement that the company is determined to maximize the utilization of renewable energy like geothermal for electricity.

“We welcome the government’s decision to entrust us in the development of geothermal energy for the welfare of the Indonesian people,” Husen said.

Pertamina has 14 geothermal assets spread across Indonesia, with three in operation. It generates 402 megawatts of electricity from geothermal resources and has laid out an ambitious plan to generate 2,200 megawatts, or the equivalent of 100,000 barrels of oil, by 2014.

The company has no plans to open a new plant this year, Adiatma said.

“We will focus on exploration activities, engineering, procurement and construction,” he said, adding that the company has allocated Rp 2.1 trillion ($218 million) for capital expenditure.

Yesterday in Asia

Shanghai surged 3.06 percent, or 68.74 points, to 2,311.74 after the head of China’s securities regulator, Guo Shuqing, said the investment quota for foreigners in the domestic equity market could be increased 10-fold.

Hong Kong rose 0.64 percent, or 149.19 points, to 23,413.26, Seoul added 0.52 percent, or 10.37 points, to 2,007.04 and Sydney closed up 0.22 percent, or 10.2 points, at 4,719.7.

But Singapore slipped 0.31 percent, or 9.91 points, to 3,206.59, pulled down by property stocks after the government introduced new measures at the weekend to cool the local market.

Tokyo was closed for a public holiday.

– Wellington rose 0.54 percent, or 22.16 points, to 4,153.92.

Fletcher Building added 1.61 percent to NZ$8.86, Telecom Corp rose 1.08 percent to NZ$2.335 and The Warehouse gained 0.66 percent to NZ$3.07.

– Taipei was flat, edging up 4.82 points to 7,823.97.

Taiwan Semiconductor Manufacturing Co. gained 1.0 percent at Tw$102.0 while leading smartphone maker HTC climbed 5.1 percent to Tw$291.0.

– Manila advanced 0.70 percent, or 42.15 points, to 6,093.90.

Top-traded Bloomberry Resorts Corp. gained 1.54 percent to 13.16 pesos while BDO Unibank rose 2.46 percent to 77 pesos.

– Kuala Lumpur gained 0.11 percent, or 1.93 points, to 1,684.63.

YTL Power International added 3.8 percent to 1.66 ringgit, while Felda Global Ventures Holdings rose 0.7 percent to 4.61. Telekom Malaysia lost 0.5 percent to 5.79 ringgit.

– Bangkok added 0.92 percent, or 13.01 points, to 1,425.07.

Oil company PTT gained 2.15 percent to 333 baht, while telecoms firm Advanced Info Service lost 1.74 percent to 197.50 baht.

– Jakarta ended up 1.78 percent, or 76.59 points, at 4,382.50.

Miner Aneka Tambang jumped 4.35 percent to 1,440 rupiah and cigarette maker Gudang Garam rose 4.02 percent to 54,400 rupiah, while palm oil producer Sinar Mas Agro Resources and Technology slid 0.76 percent to 6,500 rupiah.

– Mumbai jumped 1.23 percent, or 242.77 points, to 19,906.41.

Property firm DLF rose 7.72 percent to 247.8 rupees, while IT outsourcer Infosys added 3.49 percent to 2,807.25.

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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