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ASEAN STOCK WATCH Asean Affairs   7  July  2011

Asean Stock Watch- July 7



Overnight, the Dow Jones Industrial Average fell 12.90 points, or 0.1 percent to 12,569.87. The Dow had risen by as much as 19 points on reports of higher orders for manufactured goods. US investors also opted to stay on the sidelines after President Barack Obama rejected a deal on extending debt limits, insisting on raising the federal borrowing ceiling with a balance between spending cuts and revenue increases.


The country’s benchmark stock index slipped for a second day on Wednesday on concerns Europe’s financial woes weren’t over after Portugal’s credit rating was cut to junk status.

The Jakarta Composite Index fell 15.17 points, or 0.4 percent, to 3,908.96, extending Tuesday’s decline of 0.7 percent.

Credit rating agency Moody’s Investors Service on Tuesday lowered Portugal’s long-term government bond rating four levels to junk status. Moody’s said the country could need more aid and growth might not meet expectations. The downgrade came after Greece’s parliament agreed last week to a round of austerity measures to avoid default.

“The European Union might have agreed to help Greece. Now the problem is spreading to Portugal,” said Mohammad Alfatih, an analyst at Samuel Sekuritas.

More than 4.4 billion shares worth Rp 3.7 trillion ($433 million) were traded. Decliners beat gainers 120 to 89.

Astra International, the nation’s largest listed auto retailer, lost 1.8 percent to Rp 65,100.

“Astra has the largest market capitalization on the Indonesia Stock Exchange, and it often determines the index’s movement,” Alfatih said. “It has grown significantly in the last two weeks and it’s down on profit-taking now.”

Bank Rakyat Indonesia, the country’s second-largest lender by assets, lost 1.5 percent to Rp 6,600.

Property developer Agung Podomoro Land gained 3 percent to Rp 340 as a report in Bisnis Indonesia suggested it planned to sell Rp 800 billion in bonds this year as alternative funding for capital expenditure.

The rupiah strengthened slightly, trading at 8,538 to the US dollar at Wednesday’s close from 8,535 the day before.


The "summer rally" in Bursa Malaysia has started with the key benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) today hitting an all-time high for the second time this month, said an analyst.

Affin Investment Bank's Head of Retail, Dr Nazri Khan said the sideways range bound market developed over the last four months has ended and the market was looking at the direction of 1,600 level in the near term.

The summer rally traditionally refers to the stock market's overall gain during the more positive month of July with the months of May until June said to be a typically weak period for the stock market, Nazri said.

He said the market was also expected to break another record high soon in line with Wall Street, which recorded its best week in two years last Friday despite a slow recovery in the global economy, high oil prices and the European debt crisis.

Progress in Malaysia's Economic Transformation Programme have also provided support to the market.

The only concern is the declining daily trade volume, but foreign participation in the local stock market has been encouraging, he said.

"All these suggest the start of summer rally," Nazri said.

The benchmark FBM KLCI on Wednesday closed at its peak of 1,591.34, up 9.49 points, after opening 0.36 of a point better at 1,582.21, supported by gains in the Petronas linked and banking stocks ahead of Bank Negara's Monetary Policy Committee Meeting on Thursday.

Meanwhile, HSBC Global Research says it expects global equities to bottom in the third quarter as the mid-cycle correction ends.

This also suggests investors should look gradually to take more risk and cyclical exposure during the next quarter - which should favor an export-sensitive region such as Asia, it said in its Pan-Asia Equity Strategy report.


The peso closed to its highest in the last nine weeks on Wednesday, bouncing back to the 42 level, buoyed by the continued positive outlook on the Philippines.

At the Philippine Dealing System, the local unit gained 16.5 centavos to close at 42.89 against the US dollar from 43.055 the previous trading day.

Marcelo Ayes, senior vice president at RCBC, said the renewed appetite for the peso was caused by the overall assumption that it would strengthen toward the end of the year as shown by the national government’s bond swap issuance reaching P100 billion.

“This is just a continuation of the momentum from last week, coupled with the overall positive sentiment for the Philippine economy. It even ignored Moody’s downgrading of Portugal,” Ayes said.

He said Fitch’s statement of faster economic growth prospects for the Philippines has contributed to investors’ confidence in the peso.

“So, with all these positive developments, investors flocked to Philippine assets, as shown by local bourse breaking a new high. These are capital flows coming into the country,” he said. The dollar-peso pair opened high at 43.05 and hit a low of 42.83. The peso last closed at 42.88 on May 11.

Total trading volume surged to $1.102 billion from Tuesday’s $754.59 million.

The Bangko Sentral ng Pilipinas said the fundamental factors that influenced the exchange rate are still positive for the peso, such as the balance of payments surplus, which means that more dollars are coming into the country.

“The prospects for continued economic growth are also still positive in light of the two credit rating upgrades in a period of one week. And the last one was in a period of six months. That is enough to attract more capital inflows,” BSP Governor Amando Tetangco Jr. told reporters on the sidelines of the 2011 Stakeholders Awards.

Given the overall assumption of a strong peso for the rest of 2011, Tetangco said monetary authorities “are not really to favor any exchange rate or direction.”

“Our policy is to smoothen the volatility in the movement of the exchange rate. So, if there is an appreciation we allow, and if there’s depreciation we also allow that, but we have to make sure that there are no sharp movements that can be destabilizing,” he said.

He added that the local currency is in the middle of the range in terms of both appreciation and volatility.

“We are basically moving together with the other currencies. In fact, if you look at the real effective exchange rate, we are in the middle of the pact. They have appreciated more than the peso,” the BSP chief said.

The dollar-peso pair is expected to trade at the 42.70 to 43.30 range for the two remaining trading days.

At the Philippine Stock Exchange, share prices on Wednesday retreated from record levels, succumbing to profit-taking, triggered by a downgrade of debt-plagued Portugal’s credit rating. The composite index fell 40.86 points, or 0.92 percent to 4,398.75, while the broader all-shares index lost 13.89 points, or 0.45 percent to 3,064.59.

Decliners outnumbered advancers, 79 to 64, while 38 stocks were unchanged. A total of 2.11 billion stocks worth P4.79 billion changed hands.

“Having run out of impetus to further push prices higher and consequently the index past new record highs, investors chose to book profits, pulling the index lower,” said Jun Calaycay of Accord Capital Equities Corp.

Adding to the selling pressure was the weakness in major global markets after ratings agency Moody’s slashed Portugal’s debt to junk status.

Overnight, the Dow Jones Industrial Average fell 12.90 points, or 0.1 percent to 12,569.87. The Dow had risen by as much as 19 points on reports of higher orders for manufactured goods.

US investors also opted to stay on the sidelines after President Barack Obama rejected a deal on extending debt limits, insisting on raising the federal borrowing ceiling with a balance between spending cuts and revenue increases.

The recent rally propelling the composite index to new highs significantly improved the market’s outlook from a technical standpoint. Support is at 4,320, said AB Capital Securities Inc.

“Fundamentally, the improving fiscal situation has attracted investors’ attention on the Philippines. Notwithstanding, external factors will still have a say on how sentiments go,” the brokerage said.

with report from Singapore

Singapore shares opened higher on Thursday, with the benchmark Straits Times Index at 3,123.61 in early trade, up 0.29 per cent, or 8.9 points.

Around 120 million shares exchanged hands.


The Stock Exchange of Thailand main index went down 11.91 points or 1.10 percent to close at 1,072.68 points at the end of trading session on Wednesday Afternoon. The trade value was 36.42billion baht.

The SET50 index ended at 752.01 points, down 10.52 points or 1.38 percent, with a total trade value of 24.20 billion baht.

The SET100 index rose 20.97 points or 1.26 percent to stand at 1,638.01 points, with a total turnover of 30.61billion baht.

The SETHD index went down 13.06 points, or 1.26 percent, to 1,021.31, with a total trade value of 9.68 billion baht.

The MAI index went up 6.07 points or 2.02 percent to close at 306.74 points, with total transaction value of 1.32 billion baht.

Top five most active values were as follows;

PTT closed at 340.00 baht, down 7.00 baht (2.02 percent)

PTTCH closed at 155.50 baht, up 0.50 baht (0.32 percent)

JAS closed at 3.22 baht, down 0.12 baht (3.59 percent)

PTTAR closed at 39.75 baht, up 0.50 baht (1.27 percent)

KBANK closed at 127.50 baht, down 3.00 baht (2.30 percent)


Shares on both national stock exchanges slumped Wednesday, ending a two-day rally. "The stock market is still at very low levels of market value," said Hoa Binh Securities Co analyst Nguyen Phuc Thinh. "The value and volume of trades at this stage depend mainly on a few blue chips."

Economic information and Government policies have been supportive for investment, Thinh said. "But caution has been the top priority of investors."

He called for more specific actions from State agencies to help boost the securities market.

On the HCM City Stock Exchange yesterday, the VN-Index slid by 0.63 percent from Tuesday's close to end the day at 428.30 points. The value of trades, however, rose 37.6 percent over the previous day to VND518 billion (US$25.2 million) on a volume of nearly 22 million shares.

During the three most recent sessions, demand has been more positive, Thinh noted, so there has been no major sell-off.

Blue chips struggled, with six of the 10 leading shares by capitalisation losing 0.3-2.6 percent of their value. Decliners outnumbered advancers overall by 173-49.

Saigon Securities Inc (SSI) was the most-active share, with 1.4 million traded, but SSI shares lost 0.6 percent to close at VND18,000 per share.

On the Hanoi Stock Exchange, the HNX-Index dipped by 1.17 per cent to 73.44 points, with nearly half of all codes on the northern bourse losing ground. The value of trades reached just VND258.4 billion ($1.3 million) on a volume of 22.5 million shares.

Kim Long Securities (KLS) saw the highest trading volume nationwide with over four million shares changing hands.

Foreign investors were sellers on the southern bourse by a modest net of just VND1.5 billion ($72,800). However, they were net buyers in Ha Noi, picking up a net of VND5.7 billion ($276,700) worth of shares.


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It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

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