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ASEAN Markets Consolidate Gains

Shayne Heffernan

Over Night trading in the USA will bring some pressure to regional exchanges today however, the trend of late in ASEAN has been to consolidate during soft periods on the US exchange followed by gains during USA rallys. So, today is a good day to be buying in ASEAN.

The Jakarta Composite Index posted the biggest gain among major Asian stock markets on the day as some of the biggest companies reported healthy earnings, despite discouraging economic news from the United States on Wednesday.

The JCI rose 39.34 points, or 1.3 percent, to close at 3,096.82. Volume was unusually heavy, with 6.7 billion shares worth Rp 6.76 trillion changing hands. Gainers trounced losers 147 to 72.

The index has risen 22.2 percent this year, making it the best performer among Asia’s 10 biggest markets.

Meanwhile, the rupiah rose to its highest level since July 2007, trading at 8,973 to the US dollar as of the stock market’s close. The currency has appreciated 4.7 percent this year, after gaining 16 percent in 2009.

Brian Jackson, a Hong Kong-based senior emerging-markets strategist at Royal Bank of Canada, said he expected the exchange rate to reach 8,800 by the end of the year. “Foreign investors are very positive toward Indonesia and they like the medium- to long-term growth story,” he said. “Inflation is picking up and we expect the central bank to raise rates by 50 basis points in the second half. The higher yield should further support the rupiah.”

Among outperformers on the stock market, PT Astra International, the country’s biggest listed company, climbed 3 percent, hitting a record Rp 52,800 after its first-half net profit rose 50 percent due to surging auto sales and higher coal prices.

Astra, controlled by Singapore’s Jardine Cycle & Carriage, reported a net profit of Rp 6.44 trillion ($715) in the first half. This compares with a net profit of Rp 4.24 trillion in the same period last year. Analysts forecast a full-year result of Rp 12.5 trillion.

Consumer goods firm PT Unilever Indonesia rose 3.6 percent and instant noodle maker PT Indofood Sukses Makmur gained 5 percent as the consumer sector entered a period of high earnings in the July-September quarter, dealers said.

PT Bank Central Asia, the country’s biggest lender by market value, said its first-half profit rose 20 percent as strong domestic demand lifted its loan growth.

BCA, controlled by conglomerate Djarum Group, said it earned Rp 3.9 trillion in the first half, which compared with a net profit of Rp 3.3 trillion for the same period last year.

BCA’s shares closed up 3.3 percent at Rp 6,200 before the company released its results. Its shares rose 23 percent in the first half, outperforming a 15 percent jump in the JCI, but underperforming the 28 percent rally for the biggest state lender, PT Bank Mandiri, in the same period.

Investors have pumped $414 million into local stocks this month, lifting net purchases for the year to $1.27 billion.

The government predicts the economy will expand 6 percent in the second half, after growth of 5.8 percent in the first six months, and economists surveyed by Bloomberg estimated that inflation reached 5.8 percent in July.

Shares in Singapore closed higher on Thursday, with the benchmark Straits Times Index at 2,997.65, up 0.41 per cent, or 12.27 points.

Around 1.4 billion shares exchanged hands.

Gainers beat losers 253 to 187.

The Monetary Authority of Singapore (MAS) said it posted a net profit of 10.12 billion Singapore dollars (about 7.4 billion U.S. dollars) during the financial year ending March 31. MAS Managing Director Heng Swee Keat presented the sterling results at the MAS annual report press conference on Thursday.

He said that the increase could be attributed to the stronger Singapore dollar, interest and dividend income, as well as gains in the valuation of assets.

On the economy, he said that the strong pace of growth seen in the first half of this year is not expected to be sustained. Growth is likely to have peaked at the middle of this year, and will moderate to a more sustainable rate.

For the year as a whole, Consumer Price Index inflation is projected to average between 2.5 percent and 3.5 percent.

He also said that considerable risks remain in the global economy, and that the central bank will continue to focus on three areas: first, sustaining macroeconomic stability in the post- crisis period; second, strengthening the financial system; and third, maintaining the growth of Singapore’s financial services sector.

To help banks’ management of liquidity, he also announced initiatives to ensure this.

MAS will issue MAS bills in the second quarter of next year, with the Bills phased in gradually, with up to 20 billion Singapore dollars (14.6 billion U.S. dollars) initially, It will also continue to enhance the Standing Facility, which is the key liquidity facility for banks.

With immediate effect, MAS will extend the list of issuers of Singaporean dollar debt securities to AAA-rated and zero risk- weighted public sector entities.

The Stock Exchange of Thailand (SET) composite index gained 0.81 point or 0.09 per cent to close at 854.59 points. The market value was 27.62 billion baht, with 5.79 billion shares traded. The strength of the Thailand Market puts it on track to break 1000 before March 2011 according to Shayne Heffernan of Ebeling Heffernan.

Top five most active values were as follows;

TRUE closed at 4.28 baht, down by 0.10 baht or 2.28 per cent.

CPF closed at 24.20 baht, down by 0.10 baht or 0.41 per cent.

SCB closed at 90.25 baht, down by 0.25 baht or 0.28 per cent.

PTTEP remained at 149.00 baht.

PTT remained at 256.00 baht.

Thai Union Frozen Products Plc (TUF) is set to become one of the world’s largest seafood producers after it agreed yesterday to buy the French canned seafood business MWBrands for 680 million (about 28.5 billion baht) in cash.

Thailand’s largest canned and frozen seafood processor and exporter by sales will purchase MWBrands from New York-based Trilantic Capital Partners, formerly the private equity arm of the now-defunct bank Lehman Brothers.

MWBrands is a European leader in tuna and other seafood products through its well-known brands – John West, Petit Navire, Hyacinthe Parmentier and Mareblu – and holds leading market positions in France, the United Kingdom, Ireland, the Netherlands and Italy.

Trilantic acquired MWB through a dispersal of various entities from the US food producer HJ Heinz in 2006. For the latest fiscal year ending on March 31, 2010, MWB generated sales of 448 million. The book value of its total assets was 559 million.

TUF will fund the acquisition through loans from international and Thai banks. It will also issue up to 60 million in convertible bonds.

The listing of OfficeMate Plc, the country’s first e-commerce office stationery retailer, is expected to inspire other online operators to mobilise funds from the stock market and upgrade credibility in the future.

Shares of OfficeMate (OFM) yesterday gained 46.9% from the initial public offering price of 4.90 baht to close at 7.20 baht on the Market for Alternative Investment, in brisk trade worth 388 million baht.

Managing director Worawoot Ounjai said that the company’s listing would strengthen its reputation and trust among customers.

“Establishing business credibility helps e-commerce operators to grow more quickly,” he said.

The local e-commerce market is expected to grow by at least 30% annually over the next five years.

“But Thai e-commerce is a sleeping market, given the small number of online purchasers – only 500,000 of them, or about 3% of the 16-17 million internet users right now,” said Mr Worawoot.

Bursa Malaysia ended higher for the day with the benchmark index rising 3.22 points to 1,358.41., 386 were up, 345 were down while 279 remained unchanged. There were 999.6 million shares done at a total value of RM1.48 billion.

Among the heavyweights Axiata jumped 16 sen to RM4.31, Genting rose 5 sen to RM7.85 and DiGi added 22 sen to RM24.68.

Measat rose 27 sen to RM4.07, Petronas Dagangan added 23 sen to RM10.20 and Top Glove gained 15 sen to RM6.71.

Asian markets ended the day mostly higher.

Shanghai’s A share Index gained 0.55% to 2,648.12 and Japan’s Nikkei 225 slipped 0.59% to 9,696.02.

Hong Kong’s Hang Seng Index rose 0.01% to 21,093.82.

Crude palm oil third-month futures was RM24 higher at RM2,519 per tonne.

The ringgit was quoted at 3.1865 to the US dollar.


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