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ASEAN STOCK WATCH Asean Affairs   28  July  2011

Asean Stock Watch- July 28



U.S stocks closed sharply lower amid ongoing debt talks. The Dow Jones Industrial Average ended 198.75 points, or 1.59 percent lower at 12,302.55, The S&P 500 dropped 27.05 points, or 2.03 percent, to close at 1,304.89 while the Nasdaq composite fell 75.17 points, or 2.65 percent, to finish at 2,764.79.

Gold rose to a new high at US$ 1,614.50 an ounce.

U.S. crude oil prices settled at $96.92 a barrel, while London Brent crude slipped under $118 a barrel.


The benchmark index soared past 4,100 for the first time on Wednesday as a heavy equipment maker and a leading retailer joined a slew of companies reporting large gains in first-half earnings.

And with a fortnight of results still to come, analysts say the market may continue to reach new highs, but warn a slowdown during Ramadan could temper advances in the short-term.

The Jakarta Composite Index gained 41.34 points, or 1 percent, to close at 4,174.11 on Wednesday, extending the previous day’s 1.1 percent advance.

“The index is still benefiting from the positive sentiment of the first-half earnings reports,” said Abidan Saragih, an analyst with Pacific 2000 Securities. Shares are expected to continue gaining ground until the second week of August, when companies finish turning in their results.

Companies have benefited from an improving economy and a leap in consumer spending in an environment of steady borrowing costs. The economy is forecast to grow 6.1 percent this year by Bank Indonesia, after expanding 6.8 percent last year. Interest rates have remained steady since February, encouraging Indonesians to take out loans.

Shares in United Tractors climbed 7.6 percent to Rp 27,700. The company reported that first-half profit zoomed 35 percent to Rp 2.54 trillion ($300 million) from a year earlier on higher sales of large equipment such as backhoes, farm tractors and bulldozers.

Mitra Adi Perkasa, which owns the franchise store rights for retailers including Starbucks and Zara, advanced 5.2 percent to Rp 4,525. Net income in the first half jumped 58 percent to Rp 157 billion from a year earlier as sales increased 24 percent.

Financial stocks rose 2.4 percent, leading gains by sector, as investors maintained their positive sentiment toward the banking industry’s performance.

Bank Mandiri, Indonesia’s largest lender by assets, added 2.6 percent to close at Rp 8,050. Bank Rakyat Indonesia, the second-biggest, gained 3.8 percent to Rp 6,900. Both banks are scheduled to report their income statements as early as today.

Consumer goods producer Unilever Indonesia rose 1.7 percent to close at Rp 15,250.

More than 8.14 billion shares worth Rp 6.28 trillion changed hands at the Indonesia Stock Exchange on Wednesday. Gainers beat decliners 126 to 108. Foreign investors bought Rp 423 billion more in shares than they sold.

Analysts expressed concern recent gains may exceed profit potential, making stocks expensive. The JCI has risen 7.3 percent in July, but gains could be limited next month during Ramadan. “In the fasting month, historically speaking, the market is sluggish,” Abidan said.

The rupiah gained 0.2 percent to 8,485 against the US dollar.


Asian markets were mostly down in morning trade Thursday taking their cue from the weak overnight markets in the US.

The Malaysian bourse will probably not be spared from the selling pressures, Hwang DBS said in its morning note, adding that the benchmark FBM KLCI was expected to retreat further, possibly testing its immediate support line of 1,550 ahead.

At 10a.m., the FBM KLCI was down 10 points or 0.7 percent to 1,547.3 while the other Asian markets were all down an average of 1 percent each.

"Given the bearish underlying market tone, and coupled with the thin news flows on the corporate scene, investors may not be in the mood to buy equities at this moment," Hwang DBS noted of the local market.

One company that could see added interest today is Malaysia Airports, which is scheduled to announce its financial results for the Apr Jun quarter in the early afternoon, it said. At 10 am, MAHB was flat at RM6.50 while large cap stocks such as RHB Cap and CIMB were dragging the index to lower territory.

Nymex crude oil lost 43 cents to US$96.97 per barrel.

Spot gold added US$1.90 to US$1615 per ounce.

The ringgit was quoted at 2.956 to the US dollar.


Despoye the lack of progress in US debt talks, Philippine share prices bounced back Wednesday, buoyed by favorable expectations of second-quarter earnings results.

At the Philippine Stock Exchange, the composite index added 17.02 points, or 0.38 percent to 4,482.89, while the broader all-shares index added 9.31 points, or 0.30 percent to 3,107.86.

Advancers beat decliners, 72 to 70, while 44 stocks were unchanged. A total of 3.12 billion stocks worth P5.13 billion changed hands.

“Share prices rebounded from its listless mood to close up as optimism about second-quarter corporate results overshadowed external jitters over the US debt ceiling uncertainties,” said AB Capital Securities Inc.

Aboitiz Equitiy Ventures Inc. and Banco de Oro Unibank Inc., added 5.32 points and 3.13 points to the main index, respectively.

Overnight, US stocks continue to falter as mixed earnings reports failed to offset worries over the impasse in debt negotiations. The Dow Jones Industrial Average closed down 91.50 points, or 0.73 percent to 12501.30.

Stocks will remain pressured Thursday on heightened risk aversion and this will persist until a resolution is reached over the debt situation in the US.

“If we are to make a bet, we believe that there will be a short-term deal that will raise the debt ceiling. Its just too risky for a no deal scenario to take place,” said AB Capital, adding that a resolution to the debt stalemate could propel stocks higher to retest record levels.

Support for the PSEi is at 4,450.

At the Philippine Dealing System, the peso closed at 42.110 up 11.5 centavos from 42.225 the previous trading day.

The dollar-peso pair opened high at 42.20 and tested a low of 42.08.

Total trading volume slowed to $899.72 million from Tuesday’s $1.103 billion.


SINGAPORE shares opened lower on Thursday, with the benchmark Straits Times Index at 3,169.39 in early trade, down 0.76 percent, or 24.15 points.

Around 150.9 million shares exchanged hands.


The Stock Exchange of Thailand main index went up 9.08 points or 0.81 percent to close at 1,130.71 points at the end of trading session on Wednesday Afternoon. The trade value was 31.52 billion baht, with 7.06 billion shares traded.

The SET50 index ended at 792.82 points, up 6.63 points or 0.84 percent, with a total trade value of 18.96 billion baht.

The SET100 index rose 14.53 points or 0.85 percent to stand at 1,727.42 points, with a total turnover of 24.19 billion baht.

The SETHD index went up 8.18 points or 0.76 percent to stand at 1,079.82 points, with total trade value of 6.55 billion baht.

The MAI index went down 0.19 points or 0.06 percent to close at 317.88 points, with total transaction value of 1.65 billion baht.

Top five most active values were as follows;

SCB closed at 126.50 baht, up 3.00 baht (2.43 percent)

CPF closed at 31.25 baht, up 1.00 baht (3.31 percent)

KBANK closed at 141.00 baht, up 1.50 baht (1.08 percent)

PTT closed at 351.00 baht, up 3.00 baht (0.86 percent)

PTTCH closed at 163.50 baht, up 1.50 baht (0.93 percent)


The VN-Index closed essentially unchanged Wednesday at 409.40 points, but the value of trades on the HCM City Stock Exchange improved, increasing by 66 percent over Tuesday's session to VND510.8 billion (US$24.8 million), with 30 million shares changing hands.

However, negotiated trades accounted for over half of this volume, with over 16 million shares exchanged by this method, worth about VND252 billion ($12.2 million).

Sacombank (STB) alone saw over 9.9 million shares traded by negotiation, for a value of VND138.6 billion ($6.7 million). A rumor circulated on the market yesterday that Dragon Capital, which holds an 8.7 percent stake in STB, had decided to sell its entire holdings in the lender.

The performance of other blue chips yesterday was mixed. Software producer FPT hit its ceiling price, and Vietinbank (CTG) closed up by 4.3 percent, but Phu My Fertilisers (DPM), PetroVietnam Finance (PVF), and insurer Bao Viet Holdings BVH) all declined.

Decliners outnumbered advancers by 113-84 overall, while Investment and Trading of Real Estate Co (ITC) was a surprise as the most-active share, albeit on a volume of just 590,000.

On the Hanoi Stock Exchange, the HNX-Index also remained largely unchanged from the previous session, closing at 69.92. Ninety-five codes managed gains on the northern bourse, while 128 lost ground.

Trading value rose slightly to VND175.6 billion ($8.5 million) on a volume of 16.5 million shares, with Kim Long Securities Co (KLS) claiming the highest trading volume nationwide, with 1.5 million shares changing hands.

A number of analysts predicted that second-quarter earnings, which were helping investors differentiate among stocks, could help prop up indices in the short term, but the market would likely decline over the next few sessions without any supporting news.

Bao Viet Securities Co analyst Pham Van Khoa believed the current market doldrums could continue for some time.

"According to market movement principles, if cash flow is weak, the accumulated stocks in investor accounts will lead to pressure to sell as soon as the market recovers a little," Khoa wrote in a note.

Foreign investors increased their buys yesterday, concluding the session as net buyers on both bourses. They acquired a combined net of around a million shares worth VND25.8 billion ($1.3 million).


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