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ASEAN STOCK WATCH Asean Affairs 18 January 2013

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ASEAN investors will now turn to economic reports from China on Friday, including fourth-quarter GDP, December industrial output, retail sales and house price, which will offer clues on the health of Asia's biggest economy.

Data showing demand for new cars in recession-bound Europe fell to a 17-year low in 2012 reminded investors of the challenges facing the global economy, after the World Bank sharply cut its outlook for world growth this year to 2.4 percent from 3 percent, citing a slow recovery in developed nations.

US data showed the number of Americans filing new claims for unemployment benefits fell to a five-year low last week, while groundbreaking for homes rose to the fastest pace in four years last month.

Strength in the housing and labor markets is key to sustained growth and higher corporate profits. Job market improvement helps stimulate consumer spending while a recovery in housing means more purchases of appliances, furniture and other household goods as well as a source of employment.

Chinese GDP is expected to increase by more than 8 percent in 2013, a high-level adviser said on Wednesday.

Zheng Xinli, vice-chairman of the China Center for International Economic Exchanges, said according to the organization's estimation, Chinese GDP started to rise on the forth quarter of 2012 after 11 quarters' straight decline.

He made the remarks during the government think-tank's New Year reception in Beijing.

The Chinese economy achieved a soft landing last year, with average growth of 7.7 percent and CPI decreasing by 2.6 percent, he said.

This year will see bigger international and domestic markets in China, said Zheng, urging the related parties to take advantage of the opportunities and develop with the country.

"Chinese development means opportunities for both Chinese people and all those willing to conduct investment, trade and cooperation with China," he said.

Ambassadors and counselors from about 50 countries and representatives from international organizations joined the reception.


GT Capital Holdings has entered into a deal to buy an additional 15-percent stake in Toyota Motor Philippines from banking arm Metropolitan Bank and Trust Co. for P4.5 billion, securing majority control of the car firm.

In a disclosure to the Philippine Stock Exchange, GT Capital said it had signed the agreement to buy additional shares in Toyota Motors, raising its stake to 51 percent.

Metrobank last year agreed to sell a 30- percent stake in the car company to GT Capital for P9 billion. The first half of this deal was consummated last December.

The transaction is in line with the consolidation of major businesses under the group of taipan George Ty into the holding company while taking the non-allied business off the books of Metrobank.

The acquisition of more shares in Toyota Motor is part of GT Capital’s long-term program of increasing its holdings in core businesses. For Metrobank, the deal will strengthen its balance sheet and capital position in preparation for the implementation of Basel III.

Basel III introduces a complex package of reforms designed to improve the ability of banks to absorb losses, extend the coverage of financial risks and have stronger firewalls against periods of stress.

Earlier this month, GT Capital sold P14.3 billion worth of shares to offshore institutional investors via private placement, making history in completing the largest ever overnight equity deal in the Philippines. Most of the primary proceeds were meant for the acquisition of shares in Toyota Motor.

Other companies under GT Capital are Federal Land, Global Business Power and Philippine AXA Life Insurance Corp. However, only Federal Land and Global Power are fully consolidated into GT Capital while Toyota Motor, Metrobank and AXA are carried through equity accounting. After this transaction, Toyota Motor can be fully consolidated into GT Capital.

As of the first half of 2012, Toyota Motor booked a 35-percent year-on-year increase in net income of P1.5 billion for the period due to an increase in volume, sales and marketing initiatives.


The massive floods that hit Jakarta have paralyzed economic activities and may disturb the capital’s economic growth, an official said on Thursday.

“This is due to absent employees,” Deputy Chairman of the Jakarta Chamber of Commerce and Industry (Kadin) Sarman Simanjorang told on Thursday. “As the center of the national economy, Jakarta’s economy has been disturbed by the floods that, up until now, the government still has no clear solution for.”

Sarman claimed that economic losses could reach anywhere from Rp 1 billion to 1.5 billion per hour.

He added that business people expect the Jakarta administration and the central government to draft a plan with a definite timetable to solve the crisis.

Torrential rain from Wednesday night until Thursday morning had paralyzed the capital, with floodwaters up to one meter deep rendering several roads impassable.  

The TransJakarta busway halted operations on Thursday morning while trains from Bogor were only able to travel to Manggarai as the Kota and Sudirman stations were inundated as well.

Many workers, including civil servants and employees with companies workers, could not reach their offices.

Sarman declared that the floods could not be tolerated in the capital.

“In this case, we hope the central government will fully support the Jakarta administration in solving [this problem],” Sarman said. “If necessary, the president should establish a united team that coordinates facility and infrastructure development to free Jakarta from flooding.”


 Khazanah Nasional Bhd has confirmed it has teamed up with Sun Life Financial Inc. to acquire 98% of the insurance and takaful business from CIMB Group for RM1.8bil.

Khazanah, which is the government's strategic investment fund, said on Thursday the purchase of CIMB Aviva Assurance Bhd and CIMB Aviva Takaful Bhd would see it venturing into the insurance and takaful businesses.

Both Khazanah and Canadian Sun Life will acquire 49% of CIMB Aviva Assurance and CIMB Aviva Takaful from Aviva International Holdings Ltd and CIMB Group Holdings Bhd. CIMB Aviva is a joint venture between Aviva International Holdings Ltd and CIMB Group's CIG Bhd.

Under the deal, Khazanah and Sun Life will each pay RM900mil and this includes entering into a new 20-year bancassurance agreement with CIMB Bank Bhd. The remaining 2% will be retained by CIMB Group.


Global Logistic Properties (GLP) said on Thursday it would exercise an option to sell three Japanese properties to Tokyo-listed GLP J-REIT for US$142 million (S$174 million), Dow Jones Newswires reported.

The deal is part of a November transaction in which the Singapore-based company sold 30 Japanese warehouses to the real estate investment trust for 209 billion yen (S$2.8 billion), in a precursor to the trust's December listing in Japan.

The three assets are located in Tokyo, Osaka and Sendai, GLP said, adding that it expected to complete the sale on Feb 1.

GLP, which is 50.6 per cent owned by the Government of Singapore Investment Corp, sponsored GLP J-REIT's listing and currently owns 15 per cent of the trust.


PTT Exploration & Production Pcl (PTTEP) is planning to raise and spend about US $12 billion abroad over the next five years on exploration, production and buying new assets, it says.

Of that amount, the company targets to invest about 20 percent in Southeast Asia and the bulk of that will be assigned to Burma, notably the Zawtika gas field in the Gulf of Martaban.

“More than $2 billion is planned for Myanmar [Burma], for Zawtika and also for exploration in our other block licenses and potential new ones,” a PTTEP executive said, speaking on condition of anonymity.

“Myanmar will continue to be a major source of gas for Thailand and this will certainly grow when the Zawtika field begins producing.”

Apart from the Zawtika field, PTTEP is carrying out exploratory surveys and drilling in three other offshore blocks, the M-3, M-7 and M-11, also in the Gulf of Martaban, plus two onshore blocks in central Burma in the Naypyitaw region.

Yesterday in Asia

Tokyo edged up 9.20 points to 10,609.64, after heavy losses in the previous session on the back of a strengthening yen.

Seoul lost 0.16 percent, or 3.18 points, to 1,974.27 but Sydney added 0.38 percent, or 18.2 points, to 4,756.6.

Shanghai fell 1.06 percent, or 24.59 points, to 2,284.91, while Hong Kong ended flat, dipping 17.23 points to 23,339.76.

– Taipei lost 1.09 percent, or 83.79 points, to 7,616.64.

Leading smartphone maker HTC fell 3.29 percent to Tw$279.5 while Taiwan Semiconductor Manufacturing Co. was 0.1 percent higher at Tw$99.3.

– Manila closed 0.41 percent higher, adding 24.66 points, to 6,072.18.

Philippine Long Distance Telephone Co. gained 0.59 percent to 2,714 pesos while Ayala Land rose 2.39 percent to 27.80 pesos.

– Wellington rose 0.66 percent, or 27.58 points, to 4,196.81.

Fletcher Building was up 2.47 percent at NZ$9.11 and Telecom gained 0.85 percent to NZ$2.37 while Air New Zealand was down 1.17 percent at NZ$1.27.

– Singapore closed down 0.42 percent, or 13.40 points, to 3,195.10.

Real estate developer CapitaLand gained 1.58 percent to Sg$3.86 while OCBC Bank fell 1.64 percent to Sg$9.57.

– Kuala Lumpur shares fell 1.86 points, or 0.11 percent, to 1,681.09.

Maxis lost 0.3 percent to 6.54 ringgit, while IOI shed 0.2 percent to 4.99.

– Bangkok added 0.34 percent, or 4.81 points, to 1,420.95.

Siam Cement lost 0.47 percent to 426 baht, while power giant Electricity Generating Public Co. dropped 0.98 percent to 152 baht.

– Jakarta fell 0.29 percent, or 12.58 points, to 4,398.38.

Miner Aneka Tambang fell 2.86 percent to 1,360 rupiah and food manufacturer Indofood Sukses Makmur slipped 0.81 percent to 6,100 rupiah.

– Mumbai rose 0.74 percent, or 146.40 points, to 19,964.03.

Indian Oil Corp rose 6.6 percent to 315.9 rupees while Hindustan Petroleum Corp rose 6.06 percent to 345.6 rupees.

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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