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ASEAN STOCK WATCH Asean Affairs  3 January 2013

ASEAN Market Preview

Even though India and China will no longer provide enough steam to drive Asia’s growth to pre-crisis levels, Southeast Asia is a bright spot in the otherwise gloomy scenario. According to Economist Shayne Heffernan The Philippines, Malaysia, Thailand and Indonesia are all expected to have steady growth rates and with inflation showing signs of cooling policymakers across the region can shift their focus to spurring growth.
The survey showed Asian economies will either cut rates or leave them on hold for this year. Analysts as a whole have also delayed their expectations for rate hikes in the region.
Unlike their counterparts in the West, most Asia central banks still have plenty of room to cut interest rates and most governments are in a fairly good position to roll out fiscal stimulus measures to help their economies. But analysts said such steps can only do so much to shield the region from what looks to be a prolonged global downdraft.

As Europe’s debt crisis drags on and the US economy slows, weighing on Asia’s exports, economists are cutting their growth forecasts for most of the economies in the region.
But they remain cautiously optimistic that Asia would start to recover by the end of this year, even if some are skeptical about the pace at which it would do so.


 Singapore's Keppel Corp Ltd , the world's largest oil rig builder, on Thursday reported a 35 p e rcent r i se in second-quarter net profit, lifted by contributions from its property division.

Keppel earned $520.9 million in the three months ended June, compared with $384.9 million a year earlier. This came in ahead of average analyst forecast of $383 million.

Keppel Corp said its offshore and marine division secured $1.5 billion of new orders in the first half of the year and net order book now stood at $7.6 billion with deliveries extending into 2015.

"The division continues to see good prospects for the Offshore & Marine industry with the projected increase in exploration and production (E&P) expenditure by major oil companies and rising rigs utilisation," it said in a statement.

Keppel Corp's property arm, Keppel Land, reported on Wednesday a 87.5 per cent rise in second-quarter net profit, lifted by its high-end residential project in Singapore and a real estate investment trust it sponsors.

Keppel Corp's property business contributed nearly 15 per cent of total revenue in 2011.

Before the results, out of 24 analysts covering Keppel Corp, 20 had 'strong buy' or 'buy' ratings, while four had 'hold'recommendations.

The Thai economy remains in a strong position to continue outperforming this year, even as other emerging markets struggle with global macroeconomic headwinds.

As central banks across the planet moved in coordinated fashion this week in an attempt to bolster the global economy — which looks increasingly weak in light of recent manufacturing numbers, a handful of Southeast Asian economies remain stable.

While developed countries attempt to cope with staggering unemployment rates, the Thai economy has an unemployment rate, astoundingly, under 1%, although these figures will likely rise seasonally as recent graduates enter the workforce.

As well, stable foreign exchange rates, declining oil prices, reasonable inflation, and strong domestic demand have put the economy in a strong position to deal with a European-caused global slowdown.

The latter is what has really helped the Thai economy during the global credit crunch. As a result of the devastating floods a year earlier, the Thai government has dedicated significant capital to rebuilding infrastructure that was ruined the year before.

Because inflationary pressures have dissipated, the Thai central bank has the flexibility to cut rates further in the event that the Thai economy does begin to suffer the fate of other global nations.

The Thai economy is so insulated from the current global economic crisis that consumer confidence has actually increased, whereas most citizens throughout the world are becoming less and less positive about their respective economies.

While the Thai economy is unlikely to reach the growth rates this year that it has in past boom times, it is likely to continue at a respectable pace.

For American investors looking for exposure to the Thai economy, the best way to play is through the iShares MSCI Thailand Index Fund. This ETF is currently trading right at its 50-day moving average; if THD can hold its 50-day, and break through its 100-day moving average, the fund could move substantially higher.


ice President Boediono has called for strengthening of the country’s food resilience because of increasing worries over possible global food shortages.

“Indonesia is currently in the midst of a global food situation which is vulnerable to shocks as a result of climate change,” he said at the conference of the Food Resilience Council on Wednesday. “Thus, we must strengthen our food security. There is no room for relaxation.”

He said that a similar economic and political crisis had occurred in 2007 and 2008, when El Nino created drought and crops failure in Argentina and Australia.

In 2010, the world also witnessed a drought in Russia that led to the skyrocketing prices of wheat, he said.

“Now, North America is suffering from drought and the price of soybeans have shot up, along with corn,” he said.

Boediono said the main target of the national food resilience policy was to ensure the availability of staple foods which could be affordable for the people.

To achieve it, the main strategy is to ensure supply and self-sufficiency to be able to meet consumption, he said.

“Long-term sustainable supply through self-sufficiency can only be achieved one way, namely by increasing the productivity of every plot of land with the use of technology,” he said.

Boediono said that achieving a rational and sustainable consumption pattern required a food diversification program and a rational incentive and pricing policy so the people’s consumption pattern in the long term would not surpass the national food capacity. Their consumption needs could be met by domestic capacity.

Boediono used the meeting to praise 10 provincial governors, 17 district heads and 19 mayors who were able to increase rice production by more than 5 percent.


The FBM KLCI index lost 0.40 points or 0.02% on Thursday. The Finance Index increased 0.22% to 14730.36 points, the Properties Index up 0.09% to 1049.95 points and the Plantation Index rose 0.37% to 8848.34 points. The market traded within a range of 3.71 points between an intra-day high of 1647.94 and a low of 1644.23 during the session.

Actively traded stocks include CYBERT, LUSTER, GPRO, SKPETRO, GLOTEC, AXIATA, SKPETRO-CB, PERISAI, MTRONIC and DVM. Trading volume decreased to 1109.81 mil shares worth RM1591.27 mil as compared to Wednesday’s 1126.46 mil shares worth RM1457.83 mil.

Leading Movers were IOICORP (+9 sen to RM5.38), PBBANK (+8 sen to RM14.32), TENAGA (+2 sen to RM6.75), PETDAG (+20 sen to RM21.44) and MAYBANK (+1 sen to RM8.78). Lagging Movers were YTL (-5 sen to RM1.90), BAT (-116 sen to RM56.72), GENTING (-5 sen to RM9.39), TM (-4 sen to RM6.21) and SIME (-2 sen to RM9.94). Market breadth was positive with 389 gainers as compared to 378 losers.


The country’s balance of payments (BOP) surplus dropped to $14 million in June, bringing the first-semester surplus to $1.316 billion, according to the Bangko Sentral ng Pilipinas.

BSP data showed that the BOP remained positive after recovering to $138 million in May following two months of deficit.

However, foreign currency net inflows in June was just 6 percent of the $222 million recorded in the same month of 2011.

Also, the latest figure meant that the BOP for the first semester was just about a quarter of the $5.016-billion surplus attained in the same period last year.

Central bank officials attribute the surplus largely to the BSP’s income from its investments in foreign currency-denominated securities which are mainly US treasuries, as well as proceeds from its foreign exchange trading.

The BOP is a closely watched economic indicator because it shows a country’s level of foreign exchange liquidity, which is necessary to engage in commercial transactions with the rest of the world.

Factors that help boost the country’s BOP include foreign investments, income from exports, remittances sent by overseas Filipinos, and foreign currency-denominated loans extended to the government and income by the BSP from its investments abroad.

Earlier this week, the BSP released data that show that remittances from overseas Filipinos coursed through banks reached $1.8 billion in May, 5.1 percent higher year on year.

This brought the cumulative remittances in the first five months to $8.3 billion, an increase of 5.3 percent over the same period last year.

A surplus in the BOP builds up the country’s stock of foreign exchange or gross international reserves (GIR), which has reached $76.3 billion as of June.

Yesterday in Asia

Tokyo rose 0.79 percent, or 68.81 points, to 8,795.55, Seoul gained 1.56 percent, or 28.05 points, to 1,822.96, and Sydney climbed 2.02 percent, or 83.1 points, to 4,206.7.

Hong Kong was up 1.66 percent, or 319.17 points, at 19,559.05, and Shanghai closed up 0.73 percent, or 15.74 points, at 2,184.84.

– Singapore closed up 0.39 percent, or 11.75 points, at 3,028.96.

Fraser and Neave sank 4.52 percent to Sg$7.60 while DBS Group gained 1.46 percent to Sg$14.55.

– Taipei closed 1.41 percent, or 99.52 points, higher at 7,148.57.

Taiwan Semiconductor Manufacturing Co. gained 3.61 percent to end at Tw$77.5, while Hon Hai Precision was 1.49 percent higher at Tw$88.3.

– Manila fell 0.60 percent, or 31.18 points, to 5,189.37.

Ayala Corp. was down 1.10 percent at 430.20 pesos while SM Investments slipped 0.69 percent to 720 pesos.

– Wellington closed 0.34 percent, or 11.72 points, higher at 3,485.78.

Telecom rose 0.6 percent to NZ$2.54 and Fisher & Paykel Appliances added 0.9 percent to NZ$0.57 but Fletcher Building was down 0.17 percent at NZ$5.84.

– Jakarta closed 0.36 percent, or 14.56 points, higher at 4,096.20.

Bank Danamon rose 1.6 percent to 6,300 rupiah, Bank Mandiri gained 2.7 percent to 7,600 rupiah and Aneka Tambang added 0.74 percent to 1,370 rupiah.

– Kuala Lumpur closed flat at 1644.60, just 0.40 points lower.

Petronas Dagangan gained 0.9 percent to close at 21.44, while MMC Corp. added 0.8 percent to end at 2.55. YTL Corp. shed 2.6 percent to 1.90 and British American Tobacco (Malaysia) slipped 2.0 percent to close at 56.72.

– Bangkok slipped 0.59 percent, or 7.18 points, to 1,212.96.

Banpu dropped 0.86 percent to 460 baht, while PTT added 0.59 percent to 342 baht.

– Mumbai’s Sensex rose 0.55 percent or 93.84 points to 17,278.85.

Reliance Industries rose 1.73 percent to 727.75. Maruti Suzuki India plunged 8.74 percent to 1,117.35.

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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