ASEAN KEY DESTINATIONS
Asean Stock Watch- June 1
US stocks were poised to rise. Dow futures were up 0.9 percent to 12,541 while S&P 500 futures were up 0.9 percent to 1,342.20.
Goldman Sachs said its recent growth forecast downgrades in economies of the United States, China and the euro zone would erode near-term returns among different asset classes, although its global growth estimate was still robust at 4.3 percent.
It expects the S&P 500 index to end the year at 1,450 — nearly 10 percent higher than now — Europe’s STOXX 600 at 320, TOPIX at 900 and MSCI Asia-exJapan index at 530.
The Jakarta Composite Index resumed its climb on Tuesday, thanks to interest in commodity stocks — coal in particular — and on expectations of a low inflation reading today.
“Increasing coal price boosted commodity shares,” said Suryadi Candra Kasih, from AM Capital Indonesia.
The JCI rose 10.83 points, or 0.28 percent, to 3836.97. More than 9.12 billion shares valued at Rp 7.29 trillion ($852.9 million) were traded. Gainers led decliners 128 to 99.
Driving gains in coal stocks was news this week that India would import five millions more tons from Indonesia, raising total exports to India to 90 million tons by 2013. Coal prices are hovering at $120 to $130 per ton.
Miner Adaro Energy’s shares rose by 3.2 percent to Rp 2,450, while rival Borneo Lumbung Energy climbed 1.33 percent to Rp 1,520. Energy consultancy Wood Mackenzie said on Tuesday that Indonesia would lead world growth in power station coal exports over the next decade.
Despite the strong outlook for coal, some miners’ shares retreated. Harum Energi fell 1.6 percent to Rp 9,150 on news that majority owner Karunia Bara Perkasa had sold a 10 percent stake. Sector leader Bumi Resources dropped 2.22 percent to Rp 3,300.
Suryadi said the market was counting on good news when the Central Statistic Agency (BPS) announced May inflation data today. “Investors are expecting the inflation rate to continue to ease.”
Economists see the rate easing to as low as 5.8 percent, from last month’s annualized 6.16 percent, due to recent good harvests.
The rupiah advanced for a fourth day on speculation Europe would approve additional debt assistance for Greece, spurring demand for emerging-market assets. The currency rose 0.2 percent to 8,537 per dollar, its strongest level since May 12.
RHB Capital Bhd shares surged early Wednesday, on news that banking heavyweights Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd have been given the nod to start merger talks with RHB Capital.
At 9.14am, RHB Capital surged 94 sen to RM10.16.
Bank Negara yesterday gave the nod to both Maybank and CIMB to separately commence talks with RHB Capital and its substantial shareholders for a possible merger of the businesses of the two banking groups.
This was announced by Maybank and CIMB in separate announcements to Bursa Malaysia yesterday. The approval to commence negotiations is valid for three months from Bank Negara's letter dated May 31, 2011.
Meanwhile, the FBM KLCI up 2.10 points to 1,560.39 at 9.02am. Regional markets mostly up. Nymex crude oil rose 30 cents to US$103.00 per barrel. Spot gold fell US$4.93 to US$1,530.88 per ounce. The ringgit was quoted at 3.011 to the US dollar.
Philippines share prices slumped on Tuesday as the slower-than-expected first-quarter economic growth and concerns on its merger transaction weighed on index heavyweight Philippine Long Distance Telephone Co. (PLDT).
At the Philippine Stock Exchange (PSE), the composite index lost 50.60 points, or 1.18 percent to 4,244.64, while the broader all-shares index slid 17.60 points, or 0.59 percent to 2,971.72. Gainers beat losers, 76 to 58, while 46 stocks were unchanged. A total of 5.11 billion stocks worth P7.67 billion changed hands.
“This time around, it was the lower than expected first quarter GDP growth that led to foreign selling,” Prince Anthony Yeung of AB Capital Securities Inc. said.
The government earlier said the country’s gross domestic product grew 4.9 percent in the January to March period, slower than the 8.4 percent a year ago.
In its Philippine Macro Update, Union Bank of Switzerland (UBS) said the first quarter figure “does not suggest the Philippine economy is booming.”
Also contributing to the sell-off was PLDT, which plunged 4.98 percent to P2,328 amid increasing opposition to its merger with Digital Telecommunications Philippines Inc.
“PLDT is the bellwether of the local stock market. Foreign institutions buy the stock when they are bullish on the Philippines and sell it when they aren’t,” Yeung said.
“Once the deal finally takes place, the value of PLDT will increase, which makes days like today an opportunity to accumulate shares,” he said.
It was a different story at the currency market, with the peso joining an Asian rally amid reports that Germany could make concessions to put together a bailout for Greece, thus increasing risk appetite.
At the Philippine Dealing System, the peso rose for a second day against the US dollar, closing at 43.25, up 6.5 centavos from Monday’s 43.315 finish.
The dollar-peso pair opened at 43.23 and moved to a high of 43.33 and a low of 43.18. Trading volume surged to $800.43 million from $582.50 million previously.
Traders, however, noted that Asian markets will continue to face a cautious week amid Greece’s debt woes.
Edward Teather, UBS economist, said the first-quarter growth appears to support gradual policy tightening by the Bangko Sentral ng Pilipinas (BSP).
“We continue to expect 50 basis points of policy rate increases in two 25 basis points steps over the next six months [taking rates to 5 percent from the current 4.5 percent]. This will leave monetary policy settings fairly easy but could give some support to the currency as BSP rate hikes have lagged those else wherein the region as a result of hitherto benign inflation pressures,” he said.
The currency pair is expected to trade within the 43.15 to 43.45 range this week.
Singapore shares opened higher on Wednesday, with the benchmark Straits Times Index at 3,162.38 in early trade, up 0.08 per cent, or 2.45 points.
Around 49.6 million shares exchanged hands.
Gainers beat losers 69 to 49.
Oil rose in Asian trade on Wednesday on hopes of a resolution to the Greek debt crisis, analysts said.
New York's main contract, light sweet crude for July delivery, rose 30 cents to US$103 (S$126.83) a barrel and Brent North Sea crude for July delivery gained 31 cents at US$117.04.
“In the beginning of this week, we saw cautious optimism that Greece might receive a second bailout... (which) caused crude prices (Nymex) to rise above US$102 per barrel yesterday,” a Singapore-based analyst said.
Thai stocks opened up 3.08 points at the start of trade Wednesday morning.
The Stock Exchange of Thailand main index opened at 1,076.91 points, up 3.08 points, or 0.29 percent from Tuesday’s close. The trade value was 920.99 million baht.
The SET50 index opened at 756.43 points, up 2.35 points or 0.31 percent, with a total trade value of 594.25 million baht.
The SET100 index rose 5.09 points, or 0.31 percent, to 1,647.89 points, with a total turnover of 742.35 million baht.
The MAI index opened up 1.17 points, or 0.40 percent, to stand at 297.10 points, with total transaction value of 118.27 million baht.
Top five most active values were as follows;
KTB stood at 19.00 baht, down 0.10 baht (0.52 percent)
TOP stood at 81.25 baht, up 0.50 baht (0.62 percent)
PTT stood at 356.00 baht, up 2.00 baht (0.56 percent)
PTTEP stood at 178.50 baht, up 1.00 baht (0.56 percent)
BBL stood at 163.00 baht, up 1.00 baht (0.62%)
The Stock Exchange of Thailand main index went down 2.67 points or 0.25 percent to close at 1,073.83 points at the end of the Tuesday trading session. The trade value was 31.14 billion baht.
The SET50 index ended at 754.08 points, down 2.93 points or 0.39 percent, with a total trade value of 20.68 billion baht.
The SET100 index fell 5.64 points or 0.34 percent to stand at 1,642.80 points, with a total turnover of 24.46 billion baht.
Stocks climbed for a fourth day on the HCM City Stock Exchange, tracking strong gains made by heavyweight codes in yesterday's session.
The VN-Index rose 2.25 percent to close at 421.37 points.
The value of the day's trading was modest at VND388.7 billion (US$18.5 million) on a volume of 22.8 million shares.
All 10 largest capitalised shares achieved substantial gains, with Phu My Fertiliser (DPM) surging the maximum regulated 5 percent. Food trader Masan Group (MSN) was up 4.7 per- cent, property developer Vincom (VIC) up 4.7 pe cent, insurer Bao Viet Holdings (BVH) up 4.5 percent and resort developer Vinpearlland (VPL) up 4.2 percent.
Other blue chips also made gains, including Eximbank (EIB) up 0.7 percent, PetroVietnam Finance (PVF) up 1.5 percent, property developer Hoang Anh Gia Lai (HAG) up 2.6 percent, VietinBank (CTG) up 2.7 percent, Vietcombank (VCB) up 3.7 percent and fertiliser producer Phu My (DPM) up 5 percent.
The most active stock was Saigon Securities Inc (SSI) with nearly 2 million shares traded. On the Hanoi Stock Exchange, the HNX-Index fell 0.19 percent to finish at 69.48 points.Value remained in the doldrums at VND299.2 billion ($14.2 million), with 28.6 million shares changing hands. PetroVietnam Construction (PVX) was the most heavily traded stock, closing up 2 percent with 3.1 million shares traded.
Analysts from HCM City Securities said that it had been a mixed day for the markets, with the weakness of the HNX-Index standing in contrast to gains on the VN-Index. "But the underlying tone was wholly negative with market breadth narrowing again," one analyst said.
The markets were drifting sideways, fuelled by the fact that another round of monetary tightening was on the cards.
With June 30 looming, the deadline for banks to report outstanding loans from the non-manufacturing sector to the State Bank, lending exposure to the stock market would be further cur¬tailed, they said, adding that the market was likely to fall over the coming weeks, at a more gradual pace this time.
Foreign investors concluded yesterday as net buyers in both domestic markets, picking up 1.5 million shares with a value of VND 32.5 billion ($1.5 million).
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