ASEAN KEY DESTINATIONS
Asean Stock Watch- July 19
Worries that US lawmakers and President Barack Obama will not be able to reach a deal on raising the US debt limit and curbing the government's budget spilled over to Wall Street Monday.
With two weeks to go on a US Treasury deadline to increase the nation's debt ceiling, the uncertainty weighed on investors and pushed down the three major stock indices. The president and the White House were ironing out details with Republican leaders and members of Obama's Democratic Party for a fallback measure to raise the debt ceiling before the August 2 deadline, spokesman Jay Carney said.
The blue-chip Dow Jones Industrial Average slid 94.57 points, or 0.76 percent, to 12,385.16. The broader Standard & Poor's 500 Index lost 10.7 points, or 0.81 pe cent, to 1,305.44. The technology-heavy Nasdaq Composite Index fell 24.69 points, or 0.89 percent, to 2,765.11.
The US currency picked up against the euro to 70.88 euro cents from 70.64 cents on Friday. The dollar slid against the Japanese currency to 79.05 yen from 79.12 yen.
Indonesia's benchmark index hit a new high on Monday amid optimism of further economic growth after a central bank report showed consumer confidence at a two-year high.
The Jakarta Composite Index gained 9.77 points, or 0.2 percent, to close at 4,032.97. More than 4.1 billion shares valued Rp 4.26 trillion ($498 million) changed hands. Foreign traders purchased Rp 308 billion more in shares than they sold.
Bank Indonesia released its consumer confidence index on Friday. The index was up 3.7 points to 109, its highest level in more than two years, suggesting that consumers are upbeat about the future of the nation’s economy in the next six months.
“There were more domestic factors driving the index on Monday — anticipation of economic growth and earnings reports, and selective buying of blue chips,” said Pardomuan Sihombing, head of researcher at investment firm Recapital Securities.
Recapital forecasts economic growth of 6.5 percent this year, in line with the government’s projection. The economy expanded 6.1 percent in 2010.
Miscellaneous industry — which includes automotive and textile makers — led gains on Monday with a 2.7 percent advance. The manufacturing and trade and service sectors each rose 0.9 percent.
Astra Daihatsu Motor reported a 6 percent increase over last June’s wholesale sales, sending Astra shares up 3.2 percent.
Mayora, Indonesia’s largest listed biscuit and cracker maker, added 2.1 percent, and Salim Ivomas Pratama, a cooking oil maker, climbed 3.2 percent.
Recapital’s Pardomuan said the consumer goods sector had been steadily advancing since last week as investors eyed a bump in revenue during the Islamic fasting month of Ramadan, when people traditionally spend more.
Adaro Energy, the nation’s second-largest coal producer, rose 2 percent. Adaro plans to spend $100 million to expand its loading port capacity in Central Kalimantan by 45 percent to 80 million tons per year, Investor Daily reported on Monday.
The rupiah fell 0.3 percent to trade at 8,553 against the dollar. According to Pardomuan, the central bank may intervene to keep the currency from strengthening further.
“Foreign inflow is heavy, so Bank Indonesia does not want any shocks in the exchange market,” he said.
At Bursa Malaysia, decliners outpaced advancers 291 to 101 while 179 other counters were traded unchanged. There were 136.99 million shares traded with a total turnover of RM192.33 million. Among financial stocks, CIMB was down 12 sen to RM8.44 while among oil and gas stocks, Esso shed 8 sen to RM4.72, Dialog lost 8 sen to RM2.45 and SAAG was half-a-sen lower at 7 sen.
Axiata gained 1 sen to RM5.04 and Mudajaya added 1 sen to RM1.06.
KLK fell 18 sen to RM21.28 and, Parkson slid 8 sen to RM5.81 and Carlsberg dropped 8 sen to RM7.63.
Spot gold was US$2.69 lower at US$1,602.10 per ounce while silver fell 24 cents to US$40.31. Nymex crude oil in electronic trade gained 20 cents to US$96.13 per barrel while Brent crude added 15 cents to US$116.20.
The ringgit was quoted at 3.009 to the US dollar and 4.248 to the euro.
Philippine share prices on Monday climbed to fresh highs, ignoring debt woes in Europe and the US that dragged other Asian bourses.
At the Philippine Stock Exchange, the composite index jumped 17.27 points, or 0.39 percent to 4,476.01, surpassing the previous record of 4,458.74 on Friday.
The broader all shares index gained 7.94 points, or 0.26 percent to 3,101.68.
Advancers beat decliners, 104 to 45, while 41 issues were unchanged. A total of 4.85 billion stocks worth P5.73 billion changed hands.
“Local share prices shrugged off the general decline in Asian equities, spooked by a growing perception that the European debt crisis is deteriorating further,” said Jun Calaycay of Accord Capital Equities Corp.
Investors ignored the recent results of stress tests on 90 European banks, which showed eight failing the test meant to determine how they would fare in another recession. Another 16 were close to failing the test.
The Philippines’ main share index recovered after a 7.05-point drop in the first hour to post gains at the end of the session. Year to date, the PSE is 274.87 points, or 6.54 percent ahead.
Calaycay advised caution as activity shifts to third liners, which dominated Monday’s trades, since only a handful of these stocks could sustain the run through the next couple of weeks. “As first and second liners recede to the background of investors’ interest, it may be well worth taking a second look at these issues and take appropriate positions heading into the earnings season,” Calaycay said.
“We believe that funds will slowly begin to shift to these counters as momentum fades in the short-run plays,” he added.
The PSEi will test the 4,500 mark with support at 4,430.
It was a different story at the currency market, with worries about the debt crisis in the US and EU causing Asian currencies to weaken Monday, reducing demand for emerging market assets. South Korea’s won and Malaysia’s ringgit led the slide among Asian currencies.
At the Philippine Dealing System, the peso declined by the most in almost a week before European leaders meet in Brussels on July 21 to step up efforts to stem the contagion from Greece. The local unit fell back to the 43 level, closing at 43.04 against the US dollar, down 10 centavos from last Friday’s 42.94 finish.
“Overall trading for the day was lethargic as players looked for fresher leads on Europe and the US,” a trader said.
The dollar-peso pair opened at 43.05 and moved to a high of 43.095 and to a low of 43. Another trader said the worries about Europe’s banking woes have dragged down the peso. The stress test of European banks showed that around 16 required further capital for buffer purposes.
“Although the results were somewhat better off than what the market expected, they remain skeptical over the performance of certain EU banks. In addition, sovereign debt problems in the euro zone still have some significant weight in the market,” a trader said.
Total trading volume for the day reached $845.82 million, up from last week’s $654.72 million. The currency pair is expected to trade within the 42.85 to 43.20 range this week.
Singapore shares opened lower on Tuesday, with the benchmark Straits Times Index at 3,079.62 in early trade, up 0.02 percent, or 0.67 points.
Around 186.1 million shares exchanged hands.
The Stock Exchange of Thailand (SET) composite index on Monday gained 4.03 points or 0.37 per cent to close at 1,083.94 points. The market value was 22.45 billion baht, with 3.84 billion shares traded.
The SET50 index ended the session at 758.86 points, up 2.41 points or 0.32 percent, with a total trade value of 15.23 billion baht.
The SET100 index rose 5.90 points or 0.36 percent to stay at 1,653.01 points, with a total transaction value of 18.14 billion baht.
The SETHD index stood at 1,019.34 points, up 2.93 points or 0.29 percent, with a total market value of 7.03 billion baht.
The Market for Alternative Investment (mai) index moved up 2.79 points or 0.91 percent to close at 309.61 points, with a total turnover of 559.63 million baht.
Top five most active values were as follows:
PTT closed at 338.00 baht, up by 4.00 baht or 1.20 percent.
CPF closed at 27.75 baht, down by 0.75 baht or 2.63 percent.
BANPU closed at 736.00 baht, up by 8.00 baht or 1.10 percent.
TOP closed at 73.75 baht, up by 0.75 baht or 1.03 percent.
KBANK remained at 127.50 baht.
Shares rose on the HCM City Stock Exchange but declined on the Hanoi market, with trading volumes continuing depressed on both bourses.
On the southern exchange, the VN-Index closed at 415.77, a gain of 0.25 percent over Friday's close, despite declines in value by a majority of codes.
The value of trades dipped by 8.4 percent from Friday's level to just VND346.2 billion (US$16.8 million) on a volume of 19.3 million shares.
"This is the second consecutive session that trading volume has held below 20 million shares, and this will likely continue in the next few sessions," said Dang Anh, a securities analyst for a Ha Noi-based financial media company.
Of the 10 leading shares by capitalisation, five advanced, helping lift the VN-Index into positive territory. Real estate developer Vincom (VIC) hit its ceiling price of VND124,000 per share, while insurer Bao Viet Holdings (BVH), software giant FPT, Eximbank (EIB) and Sacombank (STB) all closed up by 0.2-2.9 per cent. STB was the most-active share with around two million traded.
Vietcombank (VCB) also rose to its ceiling price as it reached the ex-date for shareholders to participate in VCB's dividend payout. The dividend will be paid in shares, increasing the overall number of VCB shares listed on the HCM City bourse, currently at around 163.2 million shares.
On the Hanoi Stock Exchange, the HNX-Index fell by 0.7 per cent yesterday to close at 71.02 points. Market value jumped by 35.6 percent compared to Friday's session to VND228.8 billion ($11.1 million), while the volume of trades also rose by 51.2 percent to 24.2 million shares.
"However, this figure was mostly attributable to the bulk of 7.2 million Habubank (HBB) shares traded through the negotiation method," Anh said.
Kim Long Securities Co (KLS) was the most-active share, with 1.4 million shares changing hands. It closed the day down 1.9 percent, while losers outnumbered gainers overall on the northern bourse by 165-71.
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