ASEAN KEY DESTINATIONS
Asean Stock Watch- July 15
The Dow Jones Industrial Average rose 44.73 points, or 0.36 percent to 12,491.61, but extending its gains could be a challenge after Moody’s said it could slash the US’ triple-A credit rating, which it has held since 1917.
Indonesia’s benchmark stock index rose for a second day on Thursday, with consumer-related companies and retailers advancing on expectations that sales will increase as people purchase goods during the upcoming fasting month of Ramadan.
The Jakarta Composite Index advanced 16.80 points, or 0.4 percent, to close at 3,997.64. More than 5.98 billion shares valued at about Rp 4 trillion ($468 million) changed hands. Gainers beat decliners 127 to 84. Foreign investors bought Rp 40 billion more in shares than they sold.
“Investors want to buy retail and consumer goods stocks because they have the potential to gain from consumer spending in the fasting month,” said Mohammad Alfatih, of Samuel Sekuritas.
Ramadan begins in a fortnight and consumers traditionally stock up on food and clothing and make purchases on vehicles and other durable goods before the end of the month.
Retailers and consumer-products makers were among the biggest gainers. Supermarket operator Matahari Putra Prima rose 7.5 percent to Rp 1,290. Unilever Indonesia, the nation’s largest maker of home products, crept forward 0.7 percent to Rp 14,850. Food producer Mayora Indah gained 3.2 percent to Rp 14,500.
Retailer Hero Supermarket surged 19 percent to Rp 6,300. It was reported on Thursday that the retail giant plans to open hundreds of new stores.
Bank Central Asia, the largest bank by market capitalization, added 0.6 percent to Rp 8,000. The bank is planning to sell bonds in the second half of the year in an effort to push its capital adequacy ratio below 13 percent, Panin Sekuritas said in a note to investors on Thursday. The lender’s ratio is currently at 14.8 percent, and the central bank requires a minimum of 8 percent.
The rupiah strengthened against the dollar, reaching 8,530, gaining 0.2 percent. Alfatih warned that the central bank might interfere when the rupiah reaches 8,200 to the dollar.
Share prices on Bursa Malaysia opened broadly lower on Friday on continued pessimism over the global economic outlook.
Against this backdrop, most traders remained sidelined, a dealer said.
After 30 minutes of trading, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) stood 1.35 points lower at 1,578.49 after opening 0.9 of a point easier at 1,578.94.
The local bourse also tracked the weak performance on Wall Street which saw the Dow Jones Industrial Average trim 54.49 points to 12,437.12, the S&P 500 index shed 8.85 points to 1,308.87 and the Nasdaq dropped 34.25 points to 2,762.67.
"Concerns over US economic policies and worries over a possible cut in its credit rating soured investor sentiment," said a dealer.
HwangDBS Vickers Research Sdn Bhd expects the local bourse to see fairly limited downside risk in the short-term.
"Against the prevailing jittery market sentiment, the benchmark FBM KLCI will probably find immediate support at around the 1,575 level," it said in a research note today.
The Finance Index fell 15.4 points to 14,844.89, the Plantation Index eased 22.98 points to 7,768.59 and the Industrial Index decreased 3.61 points to 2,850.95.
The FTSE Bursa Malaysia Emas Index shed 8.19 points to 10,823.05, the FTSE Bursa Malaysia Mid 70 Index declined 12.97 points to 11,766.19 and the FTSE Bursa Malaysia Ace Index shed 2.06 points to 4,123.19.
Market breadth was negative with 90 advancers, 118 losers while 173 other counters were unchanged.
Trading volume stood at 59.5 million shares valued at RM55.86 million.
Actives, Daya Materials rose 1.5 sen to 21.5 sen, Astral Supreme-ORD Rights fell two sen to two sen and MSM-CA:CW (C) was down two sen at 30.5 sen.
Heavyweights, Maybank was flat at RM8.86, CIMB shed three sen to RM8.76 but Petronas Chemicals added one sen RM7.08.
Philippine share prices on Thursday extended gains on Wall Street’s rise overnight, while the peso recovered amid renewed risk appetite after Moody’s warned it may cut the US’ credit rating. At the Philippine Dealing System, the peso moved back to the 42-to-a-US dollar level to finish at 42.94, gaining 11 centavos from 43.05 the previous trading day.
The dollar-peso currency pair opened at 42.95 and moved two centavos higher to 42.97, with a low of 42.83.
Traders said the market succumbed to selling and eventually reached 42.83 where the Bangko Sentral ng Pilipinas was seen bidding to curb the sudden movement.
“They seemingly bought about $200 million throughout the day to slow the peso’s appreciation,” a trader said.
Total trading volume reached $1.057 billion from $1.257 billion the previous trading day. BSP Gov. Amando Tetangco Jr. said there could be some near-term negative impact on US Treasuries and the dollar as portfolios are expected to position defensively after Moody’s warning on the US.
“But the reality is the US market is still the largest and most liquid.
With the ample liquidity in the global system and Europe facing its own problems, we can probably expect any adverse movement to be short-lived. That said, we’ll be carefully watching how US lawmakers would handle this warning from Moody’s. I think Moody’s would look for concrete steps from the US Congress on how to avoid similar situations in future,” Tetangco said in a text message to reporters.
He added that Moody’s action will affect currency movements, especially the peso and other emerging currencies.
“We could be impacted by possible shift to our markets, as emerging markets are seen to continue to be the global growth drivers,” the BSP chief said.
In its Economic Weather Report for the third quarter, the Metropolitan Bank and Trust Co. projects the peso to average 42.50 against the greenback toward yearend on the back of sustained capital flows amid solid macroeconomic fundamentals.
According to Metrobank, the key drivers of flows in currency markets, including the peso, were attributed to excess global liquidity, renewed dollar weakness and consolidation in commodity markets.
At the Philippine Stock Exchange, the composite index added 19.55 points, or 0.44 percent to 4,423.55, while the broader all-shares gained 9.42 points, or 0.31 percent to 3,076.01.
Gainers beat losers, 76 to 63, while 45 stocks were unchanged. A total of 7.15 billion stocks worth P5.26 billion changed hands.
“Philippine shares went against the general trend in the Asia Pacific region, rising on sustained optimism as well as an overnight rise in the Dow, extending gains to a second day,” said Jun Calaycay of Accord Capital Equities Corp.
“A possible downgrade of the world’s largest economy’s credit rating by Moody’s adds fears over a still-unsettled borrowing ceiling issue may push the US toward a technical default,” said Calaycay.
Following a breach of the 4,320 resistance level, this has become a major support for the local composite index. Short-term resistance is at the 4,450 level, analysts said.
“We have a lot of potential external developments that can make or break the market. We also have to look at the release of second quarter earnings results, which should start trickling in next week,” said AB Capital Securities Inc.
The PSE on Thursday announced it will extend trading hours beginning October to increase liquidity in the local stock market and prepare the bourse for the cross-border trading that would be launched next year.
Effective October 1, trading will be extended by an hour or until 1 p.m., excluding a 10-minute run-off period.
By January, trading will begin 9:30 a.m., break off at 12 p.m., resume at 1:30 p.m. and end at 3:30 p.m.
“We are cognizant of the benefits of extended trading, and we are also well aware of the challenges that it provides,” said Hans Sicat, PSE president and chief executive. Year-to-date value turnover averages P5.30 billion a day. The PSEi reached a new all-time high on July 5 at 4,439.61.
“It is an added step to getting more investors so we could capture the window of opportunity in other markets,” said Astro del Castillo, managing director at First Grade Holdings Inc.
The PSE is part of the Asean trading link, which aims to electronically interconnect the participating markets and facilitate cross border order trading seamlessly.
Singapore, Malaysia and Thailand are expected to join the Asean electronic network by the end of the year. The Philippines will be a part of the linkage early next year followed by Indonesia and Vietnam in 2013.
Singapore shares opened lower on Friday, with the benchmark Straits Times Index at 3,085.94 in early trade, down 0.09 percent, or 2.76 points.
Around 80.6 million shares exchanged hands.
The Stock Exchange of Thailand is closed today for the Buddhist Lent holy day.
The Stock Exchange of Thailand (SET) composite index on Thursday gained 2.51 points, or 0.23 percent, to close at 1,079.91 points. The market value was 21.38 billion baht, with 3.87 billion shares traded.
The SET50 index rose 2.43 points, or 0.32 percent, to stay at 756.45 points, with a total transaction value of 14.47 billion baht.
The SET100 index ended the session at 1,647.11 points, up 4.60 points, or 0.28 percent, with a total trade value of 17.35 billion baht.
The SETHD index increased 2.92 points, or 0.29 percent, to stay at 1,016.41 points, with a total market value of 5.46 billion baht.
The Market for Alternative Investment (mai) index went down 2.22 points, or 0.72 percent, to close at 306.82 points, with a total turnover of 802.78 million baht.
Top five most active values were as follows;
CPF closed at 28.50 baht, down by 0.50 baht, or 1.72 percent.
PTT closed at 334.00 baht, up by 2.00 baht, or 0.60 percent.
PTTEP closed at 181.00 baht, up by 3.00 baht, or 1.69 percent.
BANPU closed at 728.00 baht, up by 8.00 baht, or 1.11 percent.
BBL remained at 162.00 baht.
The performance of a few blue chips helped prop up the HCM City Stock Exchange again on Thursday, lifting the VN-Index to a close of 418.93 points – a gain of 0.18 per cent over the previous day's close.
Among the 10 leading shares by capitalisation, insurer Bao Viet Holdings (BVH), PetroVietnam Finance (PVF) and Vietcombank (VCB) all rose to their ceiling prices, while real estate developer Hoang Anh Gia Lai (HAG) and Phu My Fertilisers (DPM) both closed up 1.4 per cent.
Others declined, however, with developer Vincom (VIC) down 4 per cent and software giant FPT, Sacombank (STB), Vinamilk (VNM) and steelmaker Hoa Phat Group (HPG) all off by less than 1 per cent.
On the HCM City market overall yesterday, trades were sluggish and mixed, with decliners edging advancers by 101-95 overall. The volume of trades declined 18 per cent from Wednesday's level, reaching just VN459.8 billion ($22.3 million) on a volume of nearly 24 million shares.
On the Ha Noi Stock Exchange, the HNX-Index lost 0.1 per cent to close at 71.88 points. The value of trades totalled a very anaemic VND216 billion ($10.5 million) on a volume of only 19.6 million share.
Losers outnumbered gainers by 128-101, while Kim Long Securities Co (KLS) was again the most-active stock nationwide, closing unchanged after nearly 2.6 million shares changed hands.
Bao Viet Securities Co analyst Tran Hai Yen blamed the unimpressive second-quarter earnings results of listed companies and official forecasts of rising inflation in July for further depressing investor sentiment, predicting an even steeper market slump once negative news were officially released
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