ASEAN KEY DESTINATIONS
Asean Stock Watch- June 2
Concerns that the U.S. economy is stalling sent the Dow Jones industrial average down 280 points Wednesday, erasing more than a quarter of the stock market's gains for the year. Treasury bond yields fell to their lowest level since December as traders put a higher value on safer investments.
The Dow Jones industrial average dropped 279.65 points, or 2.2 percent, to 12,290.14. It was the biggest point drop since June 4 of last year, and the largest percentage drop since August. The S&P index lost 30.65, or 2.3 percent, to 1,314.55. The Nasdaq composite fell 66.11, or 2.3 percent, to 769.19.
The yield on the benchmark 10-year Treasury note fell to 2.95 percent. Bond yields fall when prices rise.
Doubts about the economy's strength that built in May were compounded by weaker-than-expected reports on manufacturing and jobs. The Institute for Supply Management's manufacturing index fell to 53.5 in May from 60.4 in April. A reading of more than 50 indicates the manufacturing industry is growing, but the index had been as high as 61.4 in February. Private employers added just 38,000 jobs in May, down from 177,000 in April, according to payroll processor ADP.
Analysts had expected 180,000 new jobs.
"It looks like this recovery has hit its second "soft patch," which for a recovery that is less than two years old is troubling," said Paul Ashworth, chief U.S. economist for Capital Economics.
The manufacturing and jobs reports, plus a decline in automobile sales in May led several economists to lower their expectations for the year. JP Morgan was among a handful of investment banks that revised down its estimate for GDP growth in the second quarter to 2 percent. The downgrade followed one the bank issued last week. The Dow was down nearly 180 points in midday trading and lost another 100 points after noon as asset management firms sent notes to their clients announcing their economic revisions.
The latest reports on retail sales, first-time applications for unemployment benefits and factory orders will be released Thursday and analysts say any additional signs of economic weakness could push the market even lower.
On the heels of those readings, the Labor Department's more comprehensive jobs report, which includes hiring by both private employers and the government, will be released Friday. The ADP figures include about 24 million workers at the 430,000 companies that use ADP to process their payrolls while the government's numbers capture the entire workforce of about 140 million.
Analysts are already expecting those figures to be worse than they anticipated just a few weeks ago. Five stocks fell for every one that rose on the New York Stock Exchange. Consolidated volume came to 4.4 billion shares. The Dow is still up 6.2 percent for the year, the S&P 500 4.5 percent.
Shares of the following companies had unusual moves in Indonesian trading on Wednesday. Stock symbols are in parentheses, and prices are as of the noon Jakarta time-break.
The Jakarta Composite index climbed 10.49 points, or 0.3 percent, to 3,847.46, advancing for a second day. The market will be closed tomorrow for a public holiday.
Banks: PT Bank Rakyat Indonesia (BBRI IJ), the nation’s biggest lender by revenue, rose 0.8 percent to 6,400 rupiah. PT Bank Central Asia (BBCA IJ), the largest by market value, gained 1.4 percent to 7,200 rupiah. Financial stocks gained on the prospect cooling inflation will ease pressure on the central bank to raise interest rates.
Indonesia’s inflation slowed for a fourth straight month with consumer prices rising 5.98 percent in May from a year earlier, compared with a 6.16 percent gain in April, the central statistics office said today.
PT Alam Sutera Realty (ASRI IJ), an Indonesian property developer, jumped 9.7 percent to 340 rupiah, set for the highest close since its December 2007 trading debut, after the company said first-quarter net income more than doubled from a year earlier to 158.5 billion rupiah ($18.6 million).
PT Timah (TINS IJ), Indonesia’s largest tin producer, rose 1.9 percent to 2,650 rupiah, on course for the steepest increase since May 18. Tin futures rose 1.6 percent to $27,940 a metric ton in London yesterday.
Share prices on Bursa Malaysia finished easier Wednesday as losses in Maybank and CIMB put pressure on the broader market.
At 5pm, the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) shed 1.87 points to 1,556.42 after opening steady at 1,561.01.
A dealer said Maybank and CIMB continued to lose shine, losing 14 sen and two sen to RM8.77 and RM8.35 respectively after expressing their interest to merge with RHB Capital.
He said the 68 sen increase in RHB Capital to RM9.90 as well as gains in plantation-related stocks like Kuala Lumpur Kepong and Sime Darby managed to lend some support to the market.
The Finance Index increased 18.78 points to 14,497.14, the Plantation Index gained 13.7 points to 7,787.52 and the Industrial Index rose 5.89 points to 2,728.47.
However, the FTSE Bursa Malaysia Emas Index declined 14.8 points to 10,676.37 and the Ace Index eased 19.01 points to 4,233.28. The Mid 70 Index advanced 6.6 points to 11,512.99.
Losers outpaced gainers by 494 to 280 while 288 counters traded unchanged.
The day's turnover decreased sharply to 795.164 million shares valued at RM1.735 billion from 1.296 billion shares valued at RM4.279 billion Tuesday.
Among active stocks, Karambunai closed 1.5 sen lower at 19 sen, Tenaga Nasional lost one sen to RM7.10, Malaysia Airlines jumped seven sen to RM1.45 and KNM shed five sen to RM2.08. Sime Darby gained one sen to RM9.20 and Kuala Lumpur Kepong rose 20 sen to RM22.20 while IOI Corp was flat at RM5.30.
Petronas Chemicals and Axiata were both unchanged at RM7.24 and RM5.00 respectively.
Volume on the Main Market dropped to 596.845 million shares valued at RM1.706 billion from 1.085 billion units worth RM4.243 billion.
Turnover on the ACE Market rose to 134.048 million shares valued at RM17.075 million from 97.445 million shares valued at RM16.641 million.
Warrants decreased to 62.657 million units worth RM10.788 million from 112.406 million units worth RM18.109 million.
Consumer products accounted for 38.5 million shares traded on the Main Market, industrial products 113.9 million, construction 28.5 million, trade and services 216.5 million, technology 9.3 million, infrastructure 7.4 million, finance 72.9 million, hotels 1.7 million , properties 88.9 million, plantations 17.6 million, mining 54,800, REITs 1.6 million and closed/fund 21,400.
Philippines share prices bounced back on Wednesday, encouraged by an overnight rally in Wall Street as investors became more optimistic on a new bailout plan for debt-plagued Greece.
At the Philippine Stock Exchange, the composite index added 41.82 points, or 0.99 percent to 4,286.46, while the broader all-shares index gained 29.77 points, or 1 percent to 3,001.49. A total of 3.37 billion stocks worth P4.79 billion changed hands.
Gainers outnumbered losers, 78 to 62, while 33 stocks were unchanged.
“The PSEi closed strongly, partially encouraged by the foreign market’s outcome last night,” said Maria Arlysa Narciso of AB Capital Securities Inc.
Sentiment was positive as global markets cheered the report that Germany might abandon its push for an early rescheduling of Greek bonds to lead a second international bailout for the debt-burdened nation. The Dow Jones industrial average shot up 128.21 points, or 1.03 percent to 12,569.79.
Narciso said that Wednesday’s climb also got a boost from a broad rally among all the subindices except for the holdings counter. The services sub-index led the gainers, rising 2.66 percent.
Index heavy weight Philippine Long Distance Telephone Co. rebounded following a steep decline Tuesday on increased opposition to its acquisition of Digital Telecommunications Philippines Inc. PLDT shares rose 3.26 percent to P2,404.
“If corporate developments turn rosier tomorrow and foreign markets sustain their gains, the PSEi may see another advance on Thursday,” said Narciso, adding that negative factors such as the lower-than-expected economic growth might pose a slight concern on most investors.
At the Philippine Dealing System, the local unit gained 11.5 centavos to close at 43.135 against the US dollar from Tuesday’s 43.25 finish.
Traders noted that the dollar-peso pair tracked its regional counterparts. An analyst said the local pair was “biddish,” adding that “it was obvious players were jittery over risk on trades as such 43.31 to 41.33 offers were lifted despite the euro-dollar establishing new highs in Asia.”
The peso opened at 43.21 and moved to a high of 43.26 and a low of 43.115.
Trading volume surged to $995.94 million from $800.43 million the previous day.
The currency pair is expected to trade within a range of 43.15 to 43.45 today.
Singapore shares opened lower on Thursday, with the benchmark Straits Times Index at 3,142.93 in early trade, down 0.94 percent, or 29.94 points.
Around 96.2 million shares exchanged hands.
The Stock Exchange of Thailand main index went down 8.20 points or 0.76 percent to close at 1,065.63 points at the end of trading session on Wednesday Afternoon. The trade value was 24.72 billion baht.
The SET50 index ended at 747.06 points, down 7.02 points or 0.93 percent, with a total trade value of 15.33 billion baht.
The SET100 index fell 15.00 points or 0.91 percent to stand at 1,627.80 points, with a total turnover of 18.87 billion baht.
The MAI index went down 1.49 points or 0.50 percent to close at 294.44 points, with total transaction value of 1.37 billion baht.
Top five most active values were as follows;
PTT closed at 350.00 baht, down 4.00 baht (1.13 percent)
KTB closed at 18.60 baht, down 0.50 baht (2.62 percent)
PTTEP closed at 179.00 baht, up 1.50 baht (0.85 percent)
TOP closed at 79.25 baht, down 1.50 baht (1.86 percent)
KBS closed at 10.60 baht, up 0.10 baht (0.95 percent)
Both stock indices surged yesterday with more than 68 per cent of codes posting gains on the two national stock exchanges as local investors rushed to buy bargain shares.
On the HCM City Stock Exchange, the VN-Index rose 3.4 per cent to close at 435.69 points, extending its winning streak to five days. The value of the day's trades climbed almost 50 per- cent to VND580.86 billion (US$28.1 million) as almost 34 million shares changed hands.
Gainers outnumbered losers by 208-35, with 116 codes increasing by nearly 5 percent – the most they can in a single session – including Bao Viet Holdings (BVH), Vietinbank (CTG), Phu My Fertilisers (DPM), Masan Group (MSN) and Vincom Co (VIC).
Saigon Securities Inc (SSI) became the most-active share on the southern bourse, with 1.8 million traded. SSI also hit its ceiling at VND17,200 ($0.85) per share.
"The market downtrend persisted for a long time, so it's time for a rebound," said Orient Securities Co analyst Nguyen Son.
Without supporting news, yesterday's surge could have been driven by investor appetite for cheap shares, while the previous rising sessions were mainly attributable to the gains of large caps, Son said.
SJC Securities Inc general director Huynh Anh Tuan also suggested that the pressure on brokerage houses to sell shares held as collateral was still exerting force on the market, and his company had been urged by banks to stop lending against securities and recommended brokerages sell collateral shares to investors.
"Current monetary policy is still aimed at absorbing money back to banks." Tuan told the newspaper Dau tu chung khoan (Securities Investment). "The stock market is unlikely to go deeper, but a chance for a sustainable rebound is low due to the lack of support from a strong cash flow."
On the Hanoi Stock Exchange yesterday, the HNX-Index soared 3.24 percent to close at 71.73 points. The value of trades remained sluggish, however, reaching just VND285.4 billion ($13.8 million) on a volume of 28 million shares.
Gainers outnumbered losers by 244-66, with 60 percent of codes hitting their ceiling prices. Coffee exporter Thai Hoa Viet Nam Group (THV) was the most-active share nationwide with over 2.6 million traded. THV closed up 2.2 percent.
Foreign investors remained net buyers on both exchanges, picking up 2.4 million shares worth a combined VND50.8 billion ($2.5 million).
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