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ASEAN STOCK WATCH Asean Affairs 8 January 2013

ASEAN Market Preview

China's budget deficit is likely to expand in 2013 as the government's increased expenditure and tax reform measures will lower the growth rate of its revenue, Jia Kang, head of the Ministry of Finance's Research Institute for Fiscal Science, said at an economic meeting on Sunday.

Jia said that China's budget deficit of GDP will increase to about 2 percent in 2013 from the targeted 1.5 percent in 2012. He did not disclose the volume of this year's budget deficit but said it will be bigger than the targeted 800 billion yuan ($127 billion) in 2012.

The Chinese government has been boosting spending in infrastructure construction to support economic growth as the world economy faces a slowdown.

Stocks lost ground on Monday, as investors drew back from recent gains that lifted the S&P 500 to a five-year high, in anticipation of sluggish growth in corporate profits.

The Dow Jones industrial average .DJI unofficially ended down 50.69 points, or 0.38 percent, at 13,384.52. The Standard & Poor's 500 Index .SPX slipped 4.62 points, or 0.32 percent, to 1,461.85. The Nasdaq Composite Index .IXIC edged down 2.84 points, or 0.09 percent, at 3,098.81.


Thoresen Thai Agencies Public Company Limited ("TTA") would like to confirm the establishment of Thoresen Shipping Denmark APS, a wholly owned subsidiary of Thoresen Shipping Singapore Pte. Ltd. ("TSS"). Details of which are as follows:

Company Name : Thoresen Shipping Denmark APS Country of Incorporation : Denmark

Date of Incorporation : 6 December 2012
Date of Business Commencement : 2 January 2013
Type of Business : Commercial dry bulk shipping activities
Registered and Paid-up Capital : DKK 80,000

Shareholder : TSS

Source of Funds : From working capital of TSS Rationale for the Investment

TSS has positioned approximately half of its fleet in the Atlantic Ocean, which provides higher yields than the Asia Pacific region but requires a focus on premium service and cargos from a diverse set of clients, including European industrial majors. While the bulk of TSS' commercial activities will continue in its Singapore hub, the opening of its Copenhagen office is expected to give TSS an opportunity to expand and provide better service to its European client base.

Size of the Transaction

The consideration invested by TSS in Thoresen Shipping Denmark APS was DKK 80,000, or Baht
424,300 (Baht Four Hundred Twenty Four Thousand and Three Hundred) using a DKK/THB
exchange rate of 5.30375.

The transaction is not subject to the notification of the Capital Market Supervisory Board No. TorJor.

20/2551 re: Rules and Regulations for Executing Significant Transactions Categorized as an Acquisition or Disposal of Asset, and Notification of the Board of Governors of The Stock Exchange of Thailand re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets B.E. 2547 (2004.)

When the transaction is combined with other acquisition transactions during the last 6 months, it is not subject to both Notifications as mentioned above.
Yours faithfully,


Singapore rigbuilders Keppel Offshore & Marine (O&M) and Sembcorp Marine have secured a slew of contracts this year.

Analysts have said the two companies could see another strong set of orders in 2013, driven by robust demand for ultra-deepwater rigs.

Keppel O&M booked about US$8 billion worth of contracts this year - its second highest on record.

This follows a record S$10 billion worth of contracts which Keppel O&M secured in 2011.

Keppel O&M said over 65 per cent (US$5.36 billion) of the orders in 2012 came from Brazil.

Looking ahead, Keppel said it is developing a new product that will enable drilling in deeper and harsher environments.

Tong Chong Heong, chief executive officer of Keppel Offshore & Marine, said: "There are also new frontiers, new areas where more rigs are required, and with the emergence of areas such as the Caspian, Black Sea, Mexico and many parts of Southeast Asia, demand for rigs has gone up."

Keppel O&M along with Sembcorp Marine are big players in the offshore rig building industry, accounting for some 70 per cent of the global market share for jack-up rigs.

Analysts said the growing demand for ultra-deepwater drilling vessels and equipment will continue to support business growth.

Low Pei Han, investment analyst at OCBC Investment Research, said: "O&M companies have seen very good order books, Keppel and Sembcorp Marine each secured about 10 billion dollars worth of orders this year. About 50 per cent of each came from Sete Brasil and Petrobras, which is what the market had more or less anticipated.

"Going into 2013, we expect Sete Brasil and Petrobras orders to remain about the same level as this year, which will be about S$4 billion to S$5 billion."

But the Singapore rigbuilders are likely to face stiffer competition from Korean and Chinese companies.

Analysts said some Chinese shipbuilders are offering similar products at a 20 per cent discount.

For example, earlier this month, Yangzijiang secured a US$170 million order for a jack-up rig, while a similar contract at Keppel O&M cost US$205 million.

According to the China Association of the National Shipbuilding Industry, China hopes to capture 20 per cent of the global market for rigs, production facilities and offshore products by 2015.

But some analysts said Singapore rig builders are not likely to lose their competitive edge anytime soon.

Janice Chua, head of equity research (Singapore) at DBS Vickers, said: "It is a tall order for the Chinese yards to try and get the global market share for rigs.

"In order for the Chinese yards to have a bigger market share globally, what is more important is the soft skills of project management, engineering, design expertise, as well as ensuring that they can deliver the projects on time and according to the clients specification. That will take at least three years to build for any of these offshore structures."

Increasing shale gas production in the US could also present a new competitive landscape for rigbuilders.

Jason Waldie, associate director at Douglas Westwood, said: "The wild card here is whether the US is going to export, or how much the US is going to export.

"Certainly I know the US government is planning to export a very good share of its gas to the market. Now what impact does that have for the yards?"

Analysts expect the demand for rigs to come under some pressure should the US decide to export a substantial amount of shale gas.


 Scomi Group Bhd's oilfield services business has increased to over RM1.7bil with the latest RM380mil contract to provide drilling fluids and services.

It said the project was the first cooperation between Scomi and Total E&P Indonesie (TEPI) for a three-year mega project starting in July 2013.

Its president of market units for Scomi Oilfields services division, Wan Ruzlan said: "This latest win is our single largest work in terms of contract value, in Indonesia to-date."

Recently, it secured a RM93.6mil contract in Myanmar and a RM130mil contract in Qatar.

In total, Scomi has secured RM603.6mil in drilling fluids and drilling waste management contracts from major clients for these recent wins.

"To-date, the oilfield services has a healthy order book of over RM1.7bil and participated in tenders in excess of RM3.0bil," he said.


Multi Agro Gemilang, a crude palm oil producer, plans to sell four billion shares, equivalent to 44.44 percent of its equity, at a price range of Rp 100 to Rp 120 per share.

The proceeds target is Rp 400 billion. Brent Securities and Valbury Asia Securities have been hired as underwriters to manage the share sale.

It is scheduled to list its shares on the Indonesia Stock Exchange (IDX) on Jan. 16.


The peso inched up slightly on the first trading day of the week as investors manifested appetite for local securities amid a favorable outlook on the domestic economy.

The local currency closed at 40.89 against the US dollar, up by 2 centavos from Friday’s finish of 40.91:$1.

Intraday high hit 40.87:$1, while intraday low settled at 40.93:$1.

Volume of trade amounted to $840.93 million from $1.44 billion previously.

The rise of the peso came as higher demand for equities pushed the Philippine Stock Exchange Index to register a new all-time high, doing so for the first four consecutive trading days of 2013.

The PSEi closed at 6,044.91, up by 73.46 points.

The increased demand for peso-denominated securities and the resulting rise of the peso occurred amid views that the Philippines would post yet another robust economic growth in 2013 and that it would finally get an investment grade.

The government expects the Philippine economy to grow by 6 to 7 percent in 2013. In the first three quarters of 2012, the economy grew by 6.5 percent.

“The economy is in an unprecedented growth momentum, supported by solid fundamentals,” Francisco Sebastian, chairman of First Metro Investments Corp., said in a press briefing on Monday.


Tokyo—which on Friday hit its highest level since before the quake and tsunami of March 2011—slipped 0.83 percent, giving up 89.10 points to 10,599.01. Sydney shed 0.14 percent, or 6.5 points to 4,717.3 and Seoul was flat, dipping 0.68 points to 2011.26.

Hong Kong finished flat, dipping 1.34 points to 23,329.75, but Shanghai closed up 0.37 percent, or 8.37 points, at 2,285.36, with traders optimistic about upcoming data, including inflation and trade figures, due out of Beijing soon.

– Singapore slipped 0.22 percent, or 6.96 points, to 3,218.26.

Property developer Keppel Land gained 0.24 percent to Sg$4.13 while United Overseas Bank dropped 0.81 percent to Sg$19.64.

– Taipei fell 0.65 percent, or 50.90 points, to 7,755.09.

Taiwan Semiconductor Manufacturing Co. was 0.99 percent lower at Tw$100.5 while leading integrated circuits design house MediaTek Inc dropped 1.31 percent to Tw$301.5.

– Manila surged 1.23 percent, or 73.46 points, to 6,044.91.

The index finished above the 6,000 for the first time thanks to growing confidence in the economy, with many expecting the Philippines will see its credit rating lifted to investment grade.

San Miguel rose 3.13 percent to 108.70 pesos and Megaworld jumped 8.8 percent to 3.33 pesos.

– Wellington closed 0.24 percent higher, adding 9.80 points to 4,084.84.

Ryman rose 2.4 percent to an all-time high of NZ$4.80, while Telecom was up 0.69 percent at NZ$2.195 and Air New Zealand was flat at NZ$1.31.

– Jakarta eased 0.40 percent, or 17.64 points, to 4,392.38.

Miner Aneka Tambang fell 0.74 percent to 1,340 rupiah and car maker Astra International slid 1.27 percent to 7,750 rupiah.

– Kuala Lumpur was flat, edging up 1.58 points to 1,694.16.

Genting rose 2.0 percent to 9.70 ringgit while UMW Holdings was up 2.0 percent to end at 12.46. British American Tobacco slipped 2.2 percent to 60.14 ringgit.

– Bangkok was also flat, nudging down 1.34 points to 1,415.32.

Shayne Heffernan Ph.D.
Economist/Hedge Fund Manager

Live Trading News
Thomson Reuters
Knightsbridge Law
Heffernan Capital Management
Heffernan Shipping

Chinese Society of Economists
American Economic Society
Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
3 Raffles Place #07-01
Bharat Building Singapore 048617
Tel: +65 6329 6408 Fax: +65 6329 9699
Email :
New York 347 5th Avenue, Suite 1402-508 NY, NY 10016


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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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