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ASEAN STOCK WATCH Asean Affairs   5 June 2012

ASEAN Equities are a buy as markets continue to sell off.

 By Shayne Heffernan Ph.D.

Signs of economic weakness around the globe and Europe's intensifying debt crisis have rattled investors, who have been dumping riskier investments like commodities and equities for the safety of government bonds.

The flat session follows Friday's slide of more than 2 percent that erased the Dow industrial average's gains for the year. The S&P 500 is now up just 1.6 percent for 2012 and is approaching correction territory, which would be a decline of at least 10 percent from its most recent high in April


Keppel Corp. fell 2.0% to S$9.64, while Sembcorp Marine fell 3.0% to S$4.27.

Sembcorp's slide came despite it saying its PT SMOE Indonesia unit, along with an Indonesia joint-venture company of Swiber Holdings, had secured a contract valued at US$175 million for an offshore project in the Southeast Asian nation. Swiber last traded 2.8% lower at S$0.515 before asking for a trading halt pending the release of another announcement.

Olam International fell 5.0% to S$1.53, while its peer Noble Group fell 2.3% to S$1.065. Palm plantation company Golden Agri-Resources shed 4.6% to S$0.620 and palm-oil-processing firm Wilmar International lost 2.5% to S$3.51.


Coup rumors have found new footing in Bangkok as politics has devolved in to protests and lock outs, Parliament has been seized once by PAD already, an event that served as a precursor to the 2006 Coup.


The peso depreciated on the first trading day of the week as unfavorable reports on employment situation in the United States and manufacturing output in China dampened appetite for emerging market securities.

The local currency closed at 43.475 against the US dollar on Monday, down by 7.5 centavos from Friday’s finish of 43.40:$1.

Intraday high hit 43:435:$, while intraday low settled at 43.55:$1. Volume of trade amounted to $655 million from $1.2 billion previously.

The fall of the peso, which came together with the decline in other key Asian currencies, was attributed to reports that non-farm sectors in the United States generated less-than-expected number of jobs in May and that manufacturing production in China slowed down in April.

Traders said the unfavorable reports on the United States and China, coupled with the ongoing concerns over the debt problems of the eurozone, prompted fund owners to liquefy their assets and shift to the US dollar.

They said economic problems in key export markets, such as United States and China, would drag performance of exporting countries like the Philippines.


Aneka Tambang, the state-controlled gold and nickel miner, is seeking $2.6 billion in investments through 2014 to finance various projects.

The Jakarta-based miner also known as Antam is mulling several options including selling bonds, bank loans or export credit facilities.

“External funding accounted for approximately 65 percent of the investment value of Antam’s multi-projects with total costs of $4 billion,” the miner’s president director, Alwinsyah Loebis, said on Thursday.

Antam is currently building several projects, including a chemical-grade alumina plant in Tayan, West Kalimantan, a ferronickel plant in East Halmahera, North Maluku, and a smelter-grade alumina plant in Mempawah, West Kalimantan.

It also has a ferronickel plant in Pomalaa and a nickel pig iron project in Mandiodo, both in Southeast Sulawesi.

Antam has yet to issue Rp 1 trillion in bonds, which was part of a Rp 4 trillion bond offering that was planned for 2011, Alwinsyah said. He said the company might also issue global bonds in an effort to tap the global market for funds. That, however, would depend on market conditions, he added.

Aneka is also looking at internal cash to finance the projects. It currently has about Rp 5 trillion on hand.


Petroliam Nasional Bhd's chief executive officer said the national oil company has finalised its decision to build its first floating terminal for liquefied natural gas exports in 2015

Bloomberg quoted Datuk Shamsul Azhar Abbas as saying on Monday Petronas was also studying the feasibility of two new LNG regasification terminals in Malaysia.

He had also said global energy consumption was forecast to grow 40% by 2035, and Europe's consumption of natural gas to generate electricity will increase to 26% by that year from 20% now.

Yesterday in Asia

Tokyo ended 1.71 percent, or 144.62 points, lower at 8,295.63, with electronics giant Sony the stand-out loser as it fell below 1,000 yen for the first time since 1980, ending at 996 yen.

Seoul fell 2.80 percent, shedding 51.38 points to close at 1,783.13, while Sydney slipped 1.94 percent, or 78.9 points, to 3,985.0.

Hong Kong tumbled 2.01 percent, or 372.75 points, to 18,185.59 and Shanghai was down 2.73 percent, or 64.89 points, at 2,308.55.

– Mumbai edged up 0.15 percent, or 23.24 points, at 15,988.4 amid hopes that the Indian central bank might soon cut interest rates to boost the flagging economy.

Steel firm Jindal Steel fell 2.71 percent to 417.4 rupees, while engineering giant Larsen and Toubro rose 3.43 percent to 1,173.4 rupees.

– Singapore closed down 1.70 percent, or 46.81 points, to 2,698.90.

DBS Bank was down 1.37 percent at Sg$12.95 while Singapore Telecommunications shed 0.65 percent to Sg$3.05.

– Taipei fell 2.98 percent, or 211.43 points, to 6,894.66.

Taiwan Semiconductor Manufacturing Co. dropped 4.26 percent to Tw$76.5 while leading smartphone maker HTC ended 6.52 percent lower at Tw$387.0.

– Indonesian shares fell by 145.18 points, or 3.82 percent, to 3,654.58.

Coal miner Bumi Resources slid 11 percent to 1,260 rupiah, rival Indika dipped 8.1 percent to 1,710 rupiah and Bank Rakyat declined 5.5 percent to 5,200 rupiah.

– Manila slumped 3.40 percent, or 172.24 points, to 4,890.20.

SM Corp. fell 4.62 percent to 660 pesos and Philippine Long Distance Telephone was down 0.83 percent at 2,400 pesos but Calata Corp. bucked the trend to gain 8.86 percent to 23.95 pesos.

– Kuala Lumpur stocks ended down 18.41 points, or 1.17 percent, at 1,555.18.

Plantation giant Sime Darby lost 0.41 percent to 9.63 ringgit, while telecommunications company Axiata Group Bhd shed 0.56 percent to 5.33 ringgit. Cybertowers gained 0.75 percent to 1.34 ringgit.

– Wellington and Bangkok were closed for public holidays.

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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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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