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ASEAN STOCK WATCH Asean Affairs   14 June 2012

ASEAN Markets will open lower

 By Shayne Heffernan Ph.D.

ASEAN Markets will open lower today after Wall Street ended lower as fears ahead of the Greek elections over the weekend drove down a market that had been treading water through most of the day.

Equities slid after retail sales fell in May for a second month, prompting economists to cut forecasts for economic growth as limited job and income gains hold back consumers. Alexis Tsipras, whose Syriza party in Greece is vying for first place in pre-election polls, said he expects the European Union will do all it can to keep the nation in the euro even if he wins elections and carries out his promise to repeal the austerity measures required to receive emergency loans.


The Bank of Thailand kept its policy rate unchanged at 3.0 percent, as expected, but said it would monitor the growing risks to the global economy and take action if warranted.

    “Risks to global economy increased relative to the previous meeting, reflecting heightened uncertainty about the future of Greece in the eurozone and banking problems in Spain. As a result, the contraction of the eurozone economy was projected to be more protracted than previously anticipated. This could have repercussions on the US economic recovery as well as Asia, where export growth has moderated in line with the slowdown in China and the global economy,” the central bank of Thailand said in a statement following a meeting of its Monetary Policy Committee.

    But the Thai economy recovered faster than expected in the first quarter and domestic demand remained robust. Although price pressures moderated on the back of lower oil and commodity prices, there were still some inflation pressures.

    “The MPC assessed that the balance of risks for the Thai economy was skewed towards growth rather than inflation, primarily reflecting heightened global economic risks stemming from the large degree of uncertainty surrounding the economic problems in Europe,” the central bank said.

Prime Minister Yingluck Shinawatra has expressed worries over the Eurozone economic crisis and assigned relevant ministries to monitor the problem closely, given its possible impact on the Thai economy.

Ms. Sansanee Nakphong, Government Spokesperson, disclosed that PM Yingluck gave an opinion regarding the current economic situation before the cabinet meeting on June 12, saying she was concerned by the crisis in Europe which could affect Thailand’s economy in the future.

Mr. Kittiratt Na-Ranong, Deputy Prime Minister and Minister of Finance, explained in the cabinet meeting that the Euro currency is depreciating and will have an impact on Thailand’s export. Therefore, Prime Minister Yingluck instructed 7 economic ministries and related institutions to closely monitor the situation and be ready to cope with upcoming problems.

Trai Thien USA (OTC:TRTH)

Trai Thien USA (OTC:TRTH) today issued an excerpt from the LTN TV interview with Trai Thien USA CEO Haley Manchester. The full interview will air throughout Asia in July 2012.

Q: What are your plans to develop the Myanmar Business?

A: As Myanmar continues to open up and the economy grows -- and especially as trade between Myanmar and ASEAN grows as a result -- we believe there will be growing demand for Trai Thien's services on routes to-and-from Myanmar. Myanmar remains a prime opportunity for companies like ours that are already established in the market in that area, and we look forward to expanding our business relationships in Myanmar with the expectation of creating an early entry into the market.

Q: What trade routes in Asia are seeing the fastest growth?

A: In our area of the shipping business, the Intra-ASEAN and China-ASEAN trade routes are growing the fastest. It is our expectation that this trend will continue as the demand to move input commodities continues to grow as a result from rising domestic China needs. The current trend of increasing external investment made by Chinese firms into the ASEAN satellite countries makes this entire region prime for continued expansion.

Q: Is the company in a position to service ASEAN, China, India, Japan and Korea?

A: Our strategic plan is to employ the new 7,600 DWT vessels on both inter- and intra- South Asia and East Asia routes as they become available in 2012-13. This will make it possible for Trai Thien to service routes outside ASEAN and southern China, and remove the constraints based on our current fleet.

Q: How much expansion do you see for the company after ASEAN +3 in 2015?

A: Trai Thien's enhanced fleet configuration with the 7,600 DWT vessels should position it to benefit greatly from accelerated revenues and income generated as growing trade trends put upward pricing pressure on rates. Additional investments in our expanded fleet based on our business model can greatly expand operations and increase revenues.

Q: Has ASEAN increased trade so far?

A: We estimate ASEAN trade to be growing at a rate approximately two percent (2%) higher than the average annual aggregate regional GDP of the underlying countries.

Q: TRTH currently has a fleet of six, how many ships will be on the water in 2015?

A: TRTH's fleet development objective is to incorporate all six new 7,600 DWT vessels into the fleet by 2013. At that time, we also plan to discontinue leases on the smallest, oldest and least profitable vessels, and anticipate, with funding, adding six additional vessels, leaving the company with a fleet of 12 x 7,600 DWT and 2-3 4,000+ DWT vessels in 2015.


Goh Chok Tong says Myanmar has the opportunity to become the new regional economic powerhouse if the country can succeed in its political and economic reforms.

Mr Goh said both Singapore and Myanmar can complement each other for mutual benefits.

He gave this assessment at the end of his two-day visit in Myanmar.

Mr Goh noted that Myanmar and Singapore are at different stages of development.

Myanmar is just beginning to move from an egalitarian economy on the path of industrialisation.

He said both countries can work together, but hopes Myanmar will benefit more than Singapore.

A strong Myanmar will also be good for the region.

Mr Goh said: "So if Myanmar reforms on the right track, opening up, growing by 8 to 10 per cent per year for 10 years, can you imagine what that will do to ASEAN? ASEAN will be more integrated, ASEAN will be a more powerful regional economy and we are there in a prosperous region."

Mr Goh also believes that Myanmar's political reforms will stay on track and that the pace of reforms has been satisfactory.

He added that political parties in Myanmar have to compete in a way that will be beneficial to the country.

Mr Goh said one of the outcomes of his visit is to better understand what Myanmar needs in terms of technical assistance from Singapore. In this regard, Singapore will make the enhanced Technical Cooperation Programme it offers to Myanmar more substantive and more focussed on areas which are relevant to Myanmar.

During Myanmar's President Thein Sein visit to Singapore last January, the foreign ministries from both countries signed a Memorandum of Understanding on the Technical Cooperation Programme. Under the MOU, Singapore will be providing help in economic development, human resource development and public administration.

Many Singapore companies have expressed their interests in doing business in Myanmar.

Singapore Business Federation has already organised two business missions this year alone.

In view of this, Singapore's investment agency IE Singapore has plans to open an office in Myanmar in the near future.

Mr Teo Ser Luck, Minister of State for Trade and Industry, said: "In fact we have to do that quickly, to help facilitate or be the bridge for our business sector and also what the market needs here, and to provide those information and facilitate the whole process.

"But we can't decide for them which are the areas which is commercially viable for them. They have to make the decision themselves. I think for our part, we have to make sure that we get our resources on the ground, understand the marker better, and provide the information for the business sector to decide."

Singapore is also keen to tap on Myanmar's resources.

Singapore's Ministry of National Development will be sending a team from the Agri-Food and Veterinary Authority (AVA) to Myanmar to explore possibilities on importing fishery products.

Mr Khaw Boon Wan, Minister for National Development, said: "But they themselves are also keen to develop downstream industries and process because they are not just selling raw food or raw fishes. So, if you can process it, there will be better value-add for the villages, and so that they will also reduce the need for the villages to come all the way to the city to get jobs."

Singapore is Myanmar's fourth largest trading partner with bilateral trade amounting to some S$1.6 billion last year. Myanmar is strategically located between China and India. In addition, its own domestic market of about 55 million people provides business access to more than two billion customers.


Vietnam's state oil and gas group Petrovietnam plans to invite Japanese firms to join it in the joint development of about 20 oil and gas blocks in the South China Sea, the Nikkei business daily said on Wednesday.

Petrovietnam will hold a briefing session for Japanese firms in early July, the unsourced report said. Japanese firms will also be given a chance to invest in infrastructure projects, including oil refineries and coal-fired power plants, totalling $24.8 billion, it said.

State-owned Petrovietnam held a similar briefing in Tokyo in June 2010, inviting Japanese investments in 28 Vietnamese projects in downstream oil, power plants, finance and real estate, totalling $23.8 billion.

An official with the Japan External Trade Organisation (JETRO), which helped organise the 2010 briefing, said no new briefing had been planned as yet.

A number of Japanese firms have been involved in energy projects in Vietnam, including JX Holdings and Idemitsu Kosan Co in the upstream sector.

Japan's JX Nippon Oil and Energy, a unit of JX Holdings, has been also considering teaming up with Petrovietnam for the expansion plan of Vietnam's Dung Quat oil refinery.


KLCI index gained 0.16 points or 0.01% on Wednesday. The Finance Index fell 0.15% to 14104.68 points, the Properties Index up 0.10% to 991.79 points and the Plantation Index rose 0.38% to 8384.64 points. The market traded within a range of 4.32 points between an intra-day high of 1580.55 and a low of 1576.23 during the session.

Actively traded stocks include FOCUS, AMEDIA, MAS-CG, SKPETRO, AXIATA, NICORP, AGLOBAL, LUSTER, FAJAR and FOCUS-WB. Trading volume decreased to 677.02 mil shares worth RM1216.20 mil as compared to Tuesday’s 707.44 mil shares worth RM1072.72 mil.

Leading Movers were DIGI (+4 sen to RM4.10), IOICORP (+4 sen to RM5.12), AXIATA (+3 sen to RM5.40), TM (+7 sen to RM5.53) and TENAGA (+4 sen to RM6.48). Lagging Movers were PBBANK (-8 sen to RM13.66), GENTING (-10 sen to RM9.40), MAXIS (-3 sen to RM6.48), YTL (-3 sen to RM2.02) and PETCHEM (-4 sen to RM6.38). Market breadth was positive with 386 gainers as compared to 282 losers.

Share prices on Bursa Malaysia closed flat Wednesday on the back of a lacklustre market with the FTSE Bursa Malaysia KLCI (FBM KLCI) ending at its intra-day low level of 1,576.23.

As at 5 pm, the barometer index was up 0.16 of a point to 1,576.23 compared with yesterday's close of 1,576.07.

Dealers said concerns over weak market fundamentals globally heightened, and made most investors stay on the sidelines while waiting for good news from either United States on possible additional financial stimulus or further move by European economies to help Spain.

Elsewhere, regional bourses saw mixed performances with Japan's Nikkei 225 improving 51.12 points to 8,587.84, Hong Kong's Hang Seng jumping 153.96 points to 19,026.52 and Singapore's Straits Times Index slipping 10.16 points to 2,786.92.

On the local front, the Finance Index dropped 20.59 points to 14,104.68 but the Plantation Index improved 32.14 points to 8,384.64 and the Industrial Index added 1.45 points to 2,781.23.

The FBM Emas Index increased 7.49 points to 10,754.26, the FBM Mid 70 Index rose 25.63 points to 11,728.08, the FBMT100 was 5.37 points higher at 10,585.36 and the FBM ACE Index advanced 22.85 points to 4,202.16.


Singapore’s central bank says a survey of analysts shows the economy will likely grow 3 percent this year, more than the previous estimate.

The survey of 21 analysts released Wednesday by the central bank showed that growth will likely be led by construction expanding 6.2 percent and manufacturing up 3 percent.

Analysts had expected the economy would grow 2.5 percent this year in a March survey. The government expects gross domestic product to expand between 1 percent and 3 percent this year, down from 4.9 percent last year.

The survey predicts the inflation rate will probably fall to 4.2 percent this year from 5.5 percent last year while the exchange rate will end 2012 at 1.24 Singapore dollars per US dollar from a current SG$1.28.

Reliance Communications (RCom) on Wednesday said the Singapore stock exchange approved its undersea cable unit for an initial public offering (IPO) that could raise more than $1 billion.

Shares of RCom India’s second-biggest mobile phone carrier by subscribers, rose 4.4 per cent in Mumbai after the announcement.

The company, controlled by billionaire Anil Ambani, is looking to list the undersea cable unit as a business trust in Singapore and would use the proceeds from the proposed share sale to cut its debt burden, $7 billion as of March.

The Singapore exchange granted an “eligibility to list” the unit as a business trust, RCom said in a statement to the stock exchange.

The company did not say when it plans the IPO. However, the sources said the IPO could be launched in July, but that would be difficult in a volatile market.

Motor sport racing company Formula One has delayed its Singapore IPO worth up to $3 billion due to weak markets.

The undersea cable unit IPO is crucial for RCom, which has been trying to raise about $3 billion by selling its telecoms tower assets but has so far been unsuccessful.

In May, a year after the company received offers for the tower business, the company said potential suitors were awaiting clarity on government rules for the telecoms sector before they went ahead with a deal.

RCom plans to sell 75 percent of the wholly-owned undersea cable unit, which a person with direct knowledge of the transaction said would be listed as Global Telecommunications Infra-structure Trust.

The company is also looking to approach cornerstone investors before the launching the public offer.

Deutsche Bank, Standard Chartered, DBS and Industrial and Commercial Bank of China are the advisers for the public offering of shares.


Mayora Indah will double its revenue in the next three years after raising its production capacity to meet consumer demand.

Many of Mayora’s products have been well-known for decades among Indonesian consumers, including Roma crackers, Kopiko coffee-flavored candy, Beng-Beng chocolate wafers, Choki-Choki chocolate paste and Energen instant cereal.

Octavius Oky Prakarsa, an equity analyst at Mandiri Sekuritas, said he expected the company’s sales to grow an average of 26.5 percent annually.

“We think the company’s sales will be double in 2015, as its production capacity increases,” Octavius said.

Mayora issued Islamic bonds worth a total of Rp 750 billion ($80.3 million) in April to expand its factories this year. The company will use about 70 percent of the bond proceeds to develop a cookie factory and supporting facilities in Tangerang.

It also plans to use 20 percent of the proceeds to develop a confectionary for wafers, chocolate and sugar, while the rest of the funds will go toward expanding subsidiary Kakao Mas Gemilang’s cocoa bean processing plant in Tangerang.

Mayora’s revenue was Rp 9.45 trillion in 2011, a 31 percent increase from Rp 7.22 trillion a year earlier. Its revenue rose 31 percent in the first quarter this year to Rp 2.56 trillion, compared to Rp 1.96 trillion in the same period last year. Mayora expects Rp 12.2 trillion in revenue this year.

Octavius said that Mayora would benefit from a drop in prices, particularly for coffee, which is 30 percent cheaper than last year, because it could boost its margin on top of its plan to increase its sales price by 5 percent to 10 percent as an adjustment to inflation.

Mayora’s net profit per share could grow by an average of 37.9 percent every year, he added.

Last year, Mayora recorded a profit of Rp 471 billion, a 2.7 percent reduction from Rp 484 billion a year earlier due to an increase in production costs.

Mayora’s profit increased 53.6 percent in the first quarter this year to Rp 138.4 billion, compared Rp 90.1 billion during the same period last year, because the company was able to reduce costs. Mayora expects Rp 611 billion in profit this year.


Empire East Land Holdings Inc., the mid-income residential development arm of tycoon Andrew Tan, expects capital spending to reach as much as P20 billion for the next five years to fund projects within Metro Manila and the Calabarzon area.

For this year, Empire East expects net profit to rise 15-20 percent, supported by progress in ongoing residential projects. Last year, net profit attributable to parent equity holders amounted to P179.38 million.

This year, the company expects to launch 5,000 new residential units, up from 3,000 last year.

Empire East president Anthony Charlemagne Yu said the company was upbeat on prospects for 2012 because reservation sales, which already hit “phenomenal” levels in the first quarter of last year, were again 121-percent higher in the first three months of 2012.

Reservation sales amounted to P3.25 billion in the first three months compared to P1.47 billion in the same period last year.

Reservation sales may double to P15 billion from P7.52 billion this year, Yu said. “So we feel that there’s the momentum and there’s still huge demand and we think it can be sustained all the way to next year and hopefully further,” Yu said. “So we’re very confident about prospects for this year.”

The company’s condominium units are being sold from as low as P2.5 million to as high as P6 million, with monthly amortization of P12,000 to P30,000.

Empire East has six ongoing projects—The Sonoma (Sta. Rosa, Laguna), San Lorenzo Place (Makati), The Rochester (San Joaquin, Pasig City), Pioneer Woodlands (EDSA corner Pioneer Avenue, Mandaluyong), Little Baguio Terraces (Aurora Boulevard, San Juan City) and Kasara (Pasig City).

“All the projects we have online have been selling very fast and we don’t see any reason why there should be any slowdown,” Yu said.

In a report to stockholders, Yu said The Sonoma was now 53-percent sold while Rochester has only 25 percent available inventory remaining for sale. Sales take-up for Pioneer Woodlands, Little Baguio Terraces and San Lorenzo Place now stood at 76 percent, 67 percent and 60 percent, respectively.

Yesterday in Asia

Tokyo closed up 0.60 percent, or 51.12 points, at 8,587.84, while Hong Kong climbed 0.82 percent, or 153.96 points, to 19,026.52 and Shanghai gained 1.27 percent, or 29.13 points, to 2,318.92.

Seoul rose 0.25 percent, or 4.58 points, to close at 1,859.32, but Sydney slipped 0.22 percent, or 9.1 points, to finish at 4,063.8.

– Mumbai edged up 0.11 percent, or 17.71 points, to 16,880.51.

India’s largest private company Reliance Industries slipped 0.84 percent to 716.50 rupees while its biggest defence contractor, Larsen & Toubro, was up 2.60 percent at 1,349.75 rupees.

– Taipei closed 0.24 percent, or 16.75 points, higher at 7,088.83.

Smartphone maker HTC rose 1.45 percent to Tw$350.0 while Taiwan Semiconductor Manufacturing Co. ended up 0.76 percent at Tw$80.0.

– Manila closed 0.66 percent, or 33.76 points, up at 5,109.61.

SM Investments gained 0.14 percent to 701 pesos and DMCI Holdings added 0.18 percent to 56 pesos but Philippine Long Distance Telephone dropped 0.65 percent to 2,440 pesos.

– Singapore slipped 0.36 percent, or 10.20 points, to 2,786.88.

Singapore Telecommunications was down 0.32 percent to Sg$3.15 while real estate developer CapitaLand shed 1.83 percent to Sg$2.68.

– Bangkok edged down 0.41 percent, or 4.71 points, to 1,158.22.

Oil giant PTT added 0.31 percent to 326 baht, while energy firm Banpu dropped 1.27 percent to 466 baht.

– Kuala Lumpur ended 0.01 percent, or 0.16 points, higher at 1,576.23.

UMW Holdings gained 1.8 percent to 8.32 ringgit, Telekom Malaysia rose 1.3 percent to 5.53 and IOI Corp. added 0.8 percent to 5.12. YTL Corp shed 1.5 percent to 2.02 ringgit while MMC Corp. fell 1.1 percent to 2.65.

– Jakarta rose 0.2 percent, or 7.88 points, to 3,860.46.

Telkom jumped 3.3 percent to 7,900 rupiah, Bank Mandiri added 0.7 percent to 7,000 rupiah, while coal producer Bumi slid 5.0 percent to 1,130 rupiah.

– Wellington fell 1.28 percent, or 43.87 points, to 3,381.73.

Fletcher Building was off 2.4 percent at NZ$6.13, Telecom was down 2.3 percent at NZ$2.33 and Contact Energy slipped 1.9 percent to NZ$4.62.

Shayne Heffernan Ph.D.  

Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
3 Raffles Place #07-01
Bharat Building Singapore 048617
Tel: +65 6329 6408 Fax: +65 6329 9699
Email :
Suite 53 Athenee Tower
63 Wireless Road, Lumpini, Pathumwan, Bangkok 10330
New York 347 5th Avenue, Suite 1402-508 NY, NY 10016


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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

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.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


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