ASEAN KEY DESTINATIONS
Asean Stock Watch- July 13
Overnight, Wall Street had its worst day in nearly a month with the Dow Jones Industrial Average suffering a steep decline following a stalemate in US budget talks and worsening euro zone debt problems, which has spread to Italy. The Dow plummeted 151.44 points, or 1.20 percent to 12,505.76.
Indonesia’s benchmark stock index fell for a second day on Tuesday on concern that Italy might become the next European country to face a debt crises, curbing global economic growth.
The Jakarta Composite Index shed 57.57 points or 1.4 percent, to close at 3,938.02, extending the 0.2 percent decline on Monday. About 5.07 billion shares valued at Rp 4.81 trillion ($562.8 million) were traded as decliners beat gainers by 195 to 48. Foreign investors sold Rp 231 billion more in shares than they bought.
“Markets responded negatively to the worries over Italy in the US market on Monday night and in our regional bourses,” said Cece Ridwanulloh, a market analyst with Ekokapital Sekuritas.
On the Indonesia Stock Exchange, mining and agribusiness were among the biggest losers. Cece said that as bad news spread, investors reduced risky investments, including commodity-related stocks. Prices for coal, nickel and crude palm oil dropped on futures exchanges worldwide.
Bumi Resources, the country’s largest coal producer, dropped 2.5 percent to Rp 2,925, while rival Adaro Energy fell 3.9 percent to Rp 2,475 as coal prices dropped.
International Nickel Indonesia, the country’s largest nickel producer, fell 2.3 percent to Rp 4,350. Aneka Tambang, the second-biggest, lost 1.2 percent to Rp 2,025.
Astra Agro Lestari, Indonesia’s largest listed plantation firm, lost 0.4 percent to Rp 22,900. The plantation unit of Indofood, Salim Ivomas Pratama, closed 2.5 percent lower at Rp 1,190.
Shares of newly listed firms that started trading on Tuesday rose. Indo Straits, a mining logistics company, surged 5.3 percent to Rp 1,000. Sidomulyo Selaras, an inland transportation firm, climbed 6.7 percent to Rp 240, while paper converter Alkindo Naratama jumped 11 percent to Rp 250.
The rupiah weakened 0.4 percent against the US dollar on Tuesday to trade at 8,562.
The FBM KLCI was up in Wednesday's early trade, gaining 0.04 points to to 1,578.14 at 9.15am. Cafe chain operator and coffee beverage manufacturer OldTown Bhd, which made its debut on Bursa Malaysia today, was most actively traded stock, rising 6 sen to RM1.31.
Regional bourses were mostly higher. Tokyo's Nikkei 225 was up 0.47 percent to 9,972.20 and Hong Kong's Hang Seng Index rose 0.61 percent to 21,794.37.
Shanghai's A index was flat at 2,754.45 while Taiwan's Taiex Index rose 0.09 percent to 8,498.48. Seoul's Kospi Index gained 9.64 percent to 2,119.37, and Singapore's Straits Times Index gained 0.13 percent to 3,081.21.
Nymex crude oil lost 37 cents to US$97.06 per barrel. Spot gold fell US$1.20 to US$1,566.50 per ounce. The ringgit was quoted at 3.024 to the US dollar.
Philippine share prices fell further on Tuesday while the exchange rate slipped back to the P43-to-a-dollar level on renewed concerns over the health of the global economy as the US and Europe struggle to contain their respective debt problems.
At the Philippine Stock Exchange, the composite index dropped 25.77 points, or 0.59 percent to 4,350.09, while the broader all-shares index lost 22.59 points, or 0.74 percent to 3,045.70. Decliners outnumbered advancers, 97 to 50, while 35 stocks were unchanged. A total of 4.26 billion stocks worth P4.36 billion changed hands.
Freya Natividad, investment analyst at 2TradeAsia.com, said the soft session was expected following weak headlines from the US and Europe.
“Economic superpowers Europe and US struggle with their respective debt woes, leading investors to find safety in precious metals and emerging markets,” said Maria Arlysa Narciso of AB Capital Securities Inc.
The absence of fresh catalysts also contributed to the decline of local equities, providing investors a good reason to book profits after share prices reached record levels in the previous week, said Astro del Castillo, managing director at First Grade Holdings Inc.
The Philippine market has succumbed to profit-taking for the second consecutive day as external pressures remain, but the sell-off could begin tapering off by Thursday.
“The index could experience a mild drop tomorrow. Fed is supposed to release its FOMC minutes and this could provide guidance on where markets are heading depending on details about the US economy,” said Narciso, referring to the Federal Open Market Committee of the US Federal Reserve. Immediate support is at the range of 4,270 to 4,300 levels with resistance at the 4,450 mark, Natividad said.
Asian currencies also closed weaker against the US dollar Tuesday amid fears that Italy and Spain may give way to Europe’s debt crisis.
At the Philippine Dealing System, the peso fell back to 43 to a dollar level, losing 32 centavos to close at 43.23 from Monday’s 42.91 finish.
“Asian markets are set to fall amid concerns about the stalemate on the US budget and rekindled fears on the euro zone debt crisis triggering demand for safer assets such as debt,” a trader said.
The dollar-peso pair opened at 43 and moved weaker to a high of 43.23 and a low of 43. Trading volume surged 75 percent to $1.131 billion from $646.08 million Monday.
The currency pair is expected to trade between 42.90 and 43.20 today, with weekly range of 42.50 to 43.20.
Singapore shares opened higher on Wednesday, with the benchmark Straits Times Index at 3,085.2 in early trade, up 0.25 percent, or 7.84 points.
Around 241.4 million shares exchanged hands
Thai composite stocks index closed on Tuesday at 1,062.39, down 14.85 points, or 1.38 percent amid Bt 28.16 billion turnover.
Blue chip SET-50 index was at 742.51, down 11.08 points, or 1.47 per cent. Top five active (value) stocks: PTT, PTTCH, BBL, TOP, BANPU.
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