ASEAN KEY DESTINATIONS
Asean Stock Watch- July 5
US markets reopened Tuesday morning after the Fourth of July holiday.
Indonesia’s benchmark stock index climbed to record levels for a third straight day on Monday amid optimism that Greece would receive the aid it needs to avert a default and that the US economy would continue to grow.
The Jakarta Composite Index rose 26.42 points, or 0.7 percent, to close at 3,953.52, bringing its three-day advance to 3.7 percent.
About 4.7 billion shares valued at Rp 4.4 trillion (US$515 million) changed hands. Foreign investors bought Rp 434 billion more in shares than they sold.
On Saturday, finance ministers from the 17 euro zone countries agreed to 8.7 billion euros ($12.6 billion) in loans to Greece. The US economy showed signs of a rebound after manufacturing data for June released on Friday beat expectations.
“The global market gave positive sentiment to the region and to Indonesia,” said Deni Hamzah, an analyst at Corfina Capital.
“The market here is optimistic that the index can reach the critical level of 4,000. The psychological aspect of the market is supporting the moves.”
However, he warned that stocks could decline as some investors cash in on the gains they made from recent trading. “There could be a correction in two or three days,” Deni said.
Indofood Sukses Makmur, the nation’s biggest instant-noodle maker, rose 2.7 percent to Rp 5,750. Goldman Sachs Group cut its forecast for wheat prices by 26 percent after reports of higher inventory and acreage in the US.
Astra International, Indonesia’s largest auto distributor, gained 4.5 percent to Rp 68,500, while rival Indomobil Sukses Internasional raced ahead 20 percent to Rp 9,650.
The Indonesian Automotive Industries Association (Gaikindo) said on Sunday that car sales in the first half of the year rose to 415,276 units, up 12 percent from the same period in 2010.
The rupiah gained 0.3 percent against the dollar, trading at 8,520 per greenback. The currency has gained 5.2 percent this year.
Despite opening firmer on Tuesday morning, Bursa Malaysia's benchmark index, the FBM Kuala Lumpur Composite Index (FBM KLCI) gave up early gains as it slipped into the red in the absence of fresh leads.
At 10.20am, the key benchmark index slipped marginally into red. However, it has since recovered and stayed in positive territory. At 10.50am, the FBM KLCI added 0.47 points to 1,582.82 with a turnover of 168.3 million shares worth RM343.7mil.
Most stocks on Bursa Malaysia were lower. Losers led gainers 237 to 214, while 271 stocks were unchanged.
A dealer said mild selling pressure in early trade dragged the key index into the red zone while market breath was negative.
“The buying momentum was just not strong enough to sustain it,” he said, adding that the market remained volatile.
Another dealer expects the benchmark index to move in a narrow band for the rest of the day. HwangDBS Vickers Research said the local bourse would probably “swing sideways with a slight upward bias” today.
“This comes after the benchmark FBM KLCI surrendered all its initial gains of 7-point to end little changed yesterday, while Wall Street was closed for holidays overnight,” it said.
The research house said the news flows on tap today included the update of the Government's Economic Transformation Programme (ETP) By the Prime Minister and the external trade statistics for the month of May.
On Bursa Malaysia, Asia File Corp that topped the gainer's list jumped 25 sen to RM4.25. United Plantations added 24 sen, RM20.30 while Press Metal rose 17 sen to RM2.40.
Maybank was the second most heavily traded counters. It added 1 sen to RM8.95. RHB Capital was the top loser, shedding 15 sen to RM8.88
Philippine share prices on Monday hit a fresh all-time high, inspired by the strong US manufacturing figures and the resolution to the Greek financial crisis.
At the Philippine Stock Exchange, the composite index rose 69.93, or 1.61 percent to 4,421.56, surpassing its previous high of 4,397.30 recorded on November 4, 2010. Year to date, the PSEi is now up 5.25 percent.
The broader all-shares index added 34.66 points, or 1.14 percent to 3,069.23. Gainers beat decliners, 101 to 33, while 37 stocks were unchanged. A total of 2.11 billion stocks worth P7.29 billion changed hands.
“Monday’s rise can be attributable to the strong performance of US markets. Regional markets were also strong, benefiting the index,” said April Lee-Tan, head of research at Citiseconline.com.
Asian markets closed higher as regional exporters rose after US manufacturing surprisingly improved in June.
But the recent ratings upgrade on the Philippines proved to be the main catalyst for the surge that allowed the index to skyrocket to a historic high as it enhanced confidence among foreign investors, Tan said.
“Trading appears mixed during the second quarter but recently picked up due to investor confidence-boosting news provided by the country’s recent ratings upgrades from international ratings agencies,” Hans Sicat, PSE president and chief executive, said in a statement. Net foreign buying was at P620 million.
Tan said investors could look forward to a better second half as the correction of commodity and food prices could boost consumer spending. Another factor that investors could look forward to is the implementation of the Public-Private Partnership projects of the government. “In a way, we deserve to trade at a much higher level,” Tan said.
“Profitability today is at a much higher level than pre-financial crisis. Interest rates are also at a much lower than 2007 levels. It’s only appropriate that the market should go up,” she added.
Support is at the 4,250 level, as the PSEi looks to challenge the next ceiling of 4,500 against a backdrop of increasing foreign outflows and declining manufacturing output.
“The US deficit concerns and the Euro zone’s debt troubles still cast worries on investors. If all these factors turn better, the move towards 4,500 can be justified,” said Maria Arlysa Narciso of AB Capital Securities Inc.
While uncertainties abroad kept foreign investors on the sidelines, the PSEi advanced by 2.14 percent, or 90.07 points to end at 4,291.21 at end-June.
Foreign investors went into buying territory during the first half in the amount of P14.75 billion, lower than the P15.75 billion in the same period last year, according to preliminary figures released by the PSE.
Total value turnover rose 28.9 percent to P661.81 billion in the first six months as the combined market capitalization of listed issues rose 33.4 percent to P8.91 trillion.
Total capital raised grew to P62.59 billion for the January to June period from P38.98 billion in the same period last year due largely to the initial public offering of Megawide Construction Corp., the follow-on offerings of San Miguel Pure Foods Co. Inc. and San Miguel Corp., as well as the stock rights offerings of SM Development Corp., Metropolitan Bank & Trust Co. and Robinsons Land Corp.
In terms of sectoral indices, the Mining & Oil index emerged as the best performer as it climbed by 43.34 percent.
Asian currencies, including the peso, closed higher Monday also because of the report showing a rebound in US manufacturing, underpinning hopes that the slowdown in the world’s biggest economy was only temporary.
At the Philippine Dealing System, the peso rose to its highest in five weeks when it closed at 43.065 against the US dollar from 43.175 last Friday.
The dollar-peso currency pair opened at 43.050 and moved to a high of 43.10 and a low of 43.035. It averaged at 43.066 at the morning session.
Total trading volume reached $879 million from $844.140 million last week. According to traders, Asian currencies will experience a slow grind against the greenback downward owing to the US holiday and their respective central banks reportedly on the bid at key support levels.
Expect the dollar-peso pair to trade within a 43 to 43.50 range within the week.
Singapore shares opened higher on Tuesday, with the benchmark Straits Times Index at 3,154.33 in early trade, up 0.03 percent, or 0.89 points.
Around 55.7 million shares exchanged hands.
The Stock Exchange of Thailand (SET) composite index gained 48.80 points, or 4.69 percent, to close at 1,090.28 points on Monday. The trade value was 63.11 billion baht, with 8.57 billion shares traded.
The SET100 index soared 81.34 points, or 5.12 percent, to stay at 1,668.65 points, with a total turnover of 54.48 billion baht.
The SET50 index ended high at 767.74 points, up 37.96 points, or 5.20 percent, with a total trade value of 44.23 billion baht.
However, the Market for Alternative Investment (MAI) index dropped 6.26 points, or 2.06 per- cent, to close at 298.01 points, with a total transaction value of 700.99 million baht.
Top five most active values were as follows;
PTT closed at 351.00 baht, up by 16.00 or 4.78 percent.
BBL closed at 166.50 baht, up by 8.50 or 5.38 percent.
KBANK closed at 132.00 baht, up by 9.00 or 7.32 percent.
SCB closed at 120.0 baht, up by 9.00 or 8.11 percent.
ITD closed at 4.60 baht, up by 1.06 or 29.94 percent.
Benchmark indices on both national bourses yesterday pared losses early in the session to close in positive territory. However, the turnaround took place so fast that many cautious investors did not participate, and combined value of trades reached only a meager VND633 billion (US$30.7 million).
"I do not know why there was a small flurry of buying in the final minutes of the session, but I think the rally will help relieve the worries of investors," said a securities analyst in Hanoi who asked to remain anonymous.
The State Securities Commission yesterday revealed that the capital raised from share issues in the first half of the year had reached VND6.4 trillion ($310.7 million), a 40-percent plunge from the same period last year.
On the HCM Stock Exchange yesterday, the VN-Index closed up 0.03 percent from Friday's session to 425.42, although losers outnumbered gainers by 115-83. The value of trades reached VND419.1 billion ($20.3 million) on a volume of 23.9 million shares.
Of the 10 leading shares by capitalisation, only Eximbank (EIB) and Sacombank (STB) advanced modestly, while STB was the most-active share on a volume of 3.15 million.
Increased demand in banking shares "was not a good sign," said SME Securities Co analysts.
"Banking shares rose sharply last Friday, but they have not often lasted beyond three sessions," they said. "Therefore, we will have to wait for today's session to define a trend for banking shares."
However, the director for the research department of Kim Eng Group, Ong Seng Yeow, said that the Vietnamese stock market was backed by Government policies. "When the market recovers, banking shares will be the aim of investors," he said.
On the Hanoi Stock Exchange yesterday, the HNX-Index also managed to close up 0.34 per cent on the day to 73.01 points despite slumping early in the session.
Although more than a third of all listed codes were in the green, market value dropped by around 35 percent to VND214.1 billion ($10.4 million) on a volume of 19 million shares.
Kim Long Securities Co (KLS) was the most-active share, with 2.87 million shares traded. SME Securities Co analysts judged KLS as the most profitable share, along with fellow securities companies Saigon Securities Inc (SSI), VNDirect Securities (VND) and Bao Viet Securities (BVS).
Kim Long Securities Co has also appointed a new general director, who promises higher second-quarter earnings.
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