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ASEAN STOCK WATCH Asean Affairs   7 June 2012

ASEAN will rally hard today after a strong showing on Wall St.

 By Shayne Heffernan Ph.D.

Overnight in the USA

All 10 S&P 500 sectors were higher on Wednesday, led by the energy, financial and technology sectors, all of which are tied to strong global demand.

European sources said German and European Union officials sought solutions for Spain's weakened banks, the latest worry in the fiscally troubled euro zone, although Madrid has not yet requested assistance and is resisting political conditions.

Adding to the slightly more upbeat news on the economy, the Federal Reserve said in its Beige Book summary that U.S. economic growth picked up over the two prior months and hiring showed signs of a modest increase.

The Dow Jones industrial average .DJI was up 222.81 points, or 1.84 percent, at 12,350.76. The Standard & Poor's 500 Index .SPX was up 23.51 points, or 1.83 percent, at 1,309.01. The Nasdaq Composite Index .IXIC was up 57.22 points, or 2.06 percent, at 2,835.33.

Underscoring the difficulty in tackling the euro zone crisis, European Central Bank President Mario Draghi suggested further stimulus to tackle the euro zone's debt crisis would not necessarily be forthcoming. The ECB left interest rates unchanged following its meeting Wednesday.

The Fed survey shows growth in each of its 12 bank districts from April 3 through May 25. Growth was moderate or modest in 10 districts, steady in the Boston district, and slowed in the Philadelphia region.

Hiring was steady or rose modestly, according to the Fed's report, known as the "Beige Book." That's in stark contrast to the government's jobs report last week, which said employers added the fewest jobs in a year in May and the unemployment rate ticked up to 8.2% from 8.1% in April.

It was the third positive reading on the economy this week. On Tuesday, a private survey found that the service sector expanded at a slightly faster pace than the previous month. The industries surveyed in that report covered about 90% of the economy and include health care, retail, construction and financial services.

And earlier Wednesday, the Labor Department said productivity fell faster than first estimated in the first quarter, a sign that businesses may have to hire to keep up with demand.

That report sent the Dow Jones industrial average up more than 200 points, extending its first two-day winning streak since late April.

The Fed survey was mostly positive. Manufacturing and home sales improved in most districts, as did residential and commercial construction. Steel production and auto sales were strong in most areas. And businesses sought more loans, which could signal expansion plans. Small and medium-sized banks in the New York district reported the most broad-based increase in loan demand since the mid-1990s.

Spanish Prime Minister Mariano Rajoy pleaded with European leaders "to support those that are in difficulty" and push toward greater fiscal unity — a step that might allow its troubled banks to get direct financial help without forcing the new conservative government to ask for outside help that it insists it has no plans to seek.

European leaders will meet at the end of June to look at ways to stop the 17-country eurozone from collapsing. The European Commission and the European Central Bank are expected to present measures at the meeting for creating a "banking union" that would oversee banks and possibly offer bailouts directly, bypassing national governments.

But that could come too late for Spain, seen as one of the weakest links in the 18-nation eurozone because investors fear it could be forced to seek an international bailout of its public finances if it is overwhelmed by the cost of rescuing its banks.


In a bid to encourage more small to medium enterprises (SMEs) to take their first step towards upgrading their operations, Singapore has rolled out the
Innovation and Capability Voucher (ICV) Scheme, worth S$32 million. With effect from 1 June 2012, the ICV Scheme has replaced the Innovation Voucher Scheme (IVS), which was rolled out approximately 3 years prior.

Where the IVS focused specifically on technology services and benefitted close to 700 SMEs, the ICV Scheme encompasses a wider scope - namely in four key areas i.e. innovation, productivity, human resources management and financial management. The ICV Scheme is also set to support 1,600 SMEs per annum or 6,400 SMEs by the end of 2015.

Mr. Satish Bakhda, Head of Rikvin's Operations said, "The ICV Scheme should not be confused with the Productivity and Innovation Credit (PIC) Scheme which automatically grants firms of all sizes a 400% corporate tax deduction or 60% cash payout option. The ICV Scheme is designed specifically for SMEs that have opted for Singapore company incorporation, have at least 30% local shareholding, register under S$100 million in group annual sales and not employ more than 200 workers."

The ICV funding will be issued by SPRING Singapore to eligible companies via vouchers valued at S$5,000 each. A company may then choose from 30 services offered by 120 participating service providers to redeem the voucher. The services, categorized by capability areas, include:

INNOVATION: technology development, intellectual property diagnostic and business thinking design;

PRODUCTIVITY: quality management, SME Management Action for Results (SMART), productivity management and service excellence;

HUMAN RESOURCES MANAGEMENT: manpower planning, recruitment & selection, compensation & benefits, performance management, career management, learning & development, development of employee handbook;

FINANCIAL MANAGEMENT: planning & budgeting, cashflow & working capital management, financial controls for SMEs, financial & business assessment for growth and financial management advisory.

"This year, the Singapore government has been highlighting the importance of innovation and productivity in business as a way of coping with the permanent reality of higher labor and business costs in the republic. The move to upgrade the IVS Scheme to the ICV Scheme not only makes good business sense on the ground level, but aligns with the national goal of sustaining an economy driven by innovation, value-added services and high-quality business activity," added Mr. Bakhda.

"On the ground level, the ICV Scheme is perfect because it proactively matches the services to small enterprises that want to but couldn't afford to invest in these capability-enhancing services. Through the ICV Scheme, small businesses will be better positioned to raise their productivity levels, strengthen their business operations and better manage business costs - all without incurring heavy consultation costs. We are confident that the republic will see more small enterprises sustain their businesses and grow; and hopefully, in time, this will encourage more people to become entrepreneurial and shake off the fear of running into failure when starting up a new business," confirmed Mr. Bakhda.

Read more:


Indonesia's state-owned enterprises will pay Rp 31 trillion ($3.3 billion) in dividends in 2013, a 0.65 percent increase over this year's payouts, as the government cuts payout ratios in an effort to spur economic growth, according to official targets.

“We continue to wish for a SOE policy that is not too large, because the profit held back from Rp 2 trillion in dividends can become projects worth RP 18 trillion,” State-Owned Enterprises Minister Dahlan Iskan said.

The government has set a target of 6.7 percent growth this year and President Susilo Bambang Yudhoyono has urged state-owned enterprises to take an active role in reaching this goal. The president called on state companies to use profits to create more jobs and invest in the nation.

By cutting dividend payouts, state companies can use profits to fund new projects and drive economic growth, Dahlan said.


Shayne Heffernan Must Own Stock PTT Exploration and Production Plc (PTTEP) has won exploration rights for two onshore petroleum blocks in Myanmar.

PTTEP South Asia Ltd and Win Precious Resources Pte, a Singaporean incorporated company, were the successful bidders for blocks PSC-G and EP-2, Tevin Vongvanich, PTTEP's president and chief executive, said in a statement submitted to the Stock Exchange of Thailand (SET) yesterday.

The PTTEP subsidiary will have a 90% interest in the blocks and Win Precious Resources the rest.

Blocks PSC-G and EP-2 are located onshore in the Central Myanmar Basin, which is west of the new capital of Nay Pyi Taw. They are 13,330 and 1,345 square kilometres in size, respectively.

Investment in the blocks is in line with PTTEP's key strategic objective of expanding in Myanmar, said the statement.

In Myanmar, PTTEP currently has investments in two exploration projects, Myanmar M3 and M11; one development project, Myanmar Zawtika, which is expected to start production next year; and two joint projects in the production phase, Yadana and Yetagun.

"Myanmar is one of our focus countries in upstream petroleum, and we're also preparing gas development plans for its central government," said Mr Tevin.

He said his company plans to set up an office in Ranong province bordering Myanmar to oversee production and be used as a facility yard for exploration and production.

PTTEP shares closed yesterday on the SET at 157.50 baht, up 2.50 baht, in trade worth 387 million baht.


The FBM KLCI index gained 9.07 points or 0.58% on Wednesday. The Finance Index increased 0.49% to 14053.39 points, the Properties Index up 0.13% to 989.27 points and the Plantation Index rose 0.89% to 8283.37 points. The market traded within a range of 8.68 points between an intra-day high of 1572.30 and a low of 1563.62 during the session.

Actively traded stocks include PERMAJU, NICORP, AGLOBAL, SKPETRO, GLOTEC, SKPETRO-CB, WIJAYA-WA, MTRONIC, KURASIA and YTL. Trading volume increased to 699.96 mil shares worth RM1140.06 mil as compared to Tuesday’s 637.97 mil shares worth RM923.14 mil.

Leading Movers were MAYBANK (+7 sen to RM8.73), CIMB (+7 sen to RM7.49), IOICORP (+7 sen to RM5.13), AXIATA (+4 sen to RM5.36) and GENTING (+8 sen to RM9.78). Lagging Movers were PBBANK (-2 sen to RM13.68), PETCHEM (-6 sen to RM6.53), MMCCORP (-4 sen to RM2.56), and YTLPOWR (-1 sen to RM1.62). Market breadth was positive with 397 gainers as compared to 305 losers.


The research arm of Moody’s Investors Services has raised its economic growth forecast for the Philippines this year to 4.7 percent from 4 percent, citing the government’s ant-corruption drive and big push for infrastructure development that will aid efforts to attract investors.

The revision of the forecast came after the Philippines posted a 6.4-percent growth in its gross domestic product in the first quarter, beating most expectations. It was the second-fastest growth rate for the period in Asia after China’s 8.1 percent.

“The Philippines kicked off 2012 at a blistering pace. This prompted an upward revision to the growth forecast,” Moody’s Analytics, the economic research unit of credit watcher Moody’s, said in its latest paper on the country.

It said the Aquino administration’s focus on good governance was tickling the interest of investors on the Philippines, which used to be out of the radar screen of most foreign firms.

The research firm also expressed confidence that the promotion of public infrastructure among potential investors from the private sector would significantly boost investments in the remainder of the year. The Aquino administration has promised to speed up the implementation of its Public-Private Partnership (PPP) program this year.

“The investment environment in the Philippines has improved over the past year as President Aquino’s plans have begun to take effect, with a focus on infrastructure development, stamping out corruption, and the seemingly obligatory chastisement of his predecessor, Gloria Arroyo, who now sits in jail on charges of electoral sabotage,” Moody Analytics said.

In Asia Yesterday

Tokyo closed up 1.81 percent, or 151.53 points, at 8,533.53, while Sydney edged up 0.29, or 11.6 points, to close at 4,055.3, after data showed the economy grew better than expected in the January-March period.

Hong Kong was 1.43 percent, or 261.50 points, higher at 18,520.53 and Shanghai eased 0.10 percent, or 2.37 points, to 2,309.55.

Seoul was closed for a public holiday.

– Mumbai jumped 2.71 percent, or 433.66 points, to close at 16,454.3.

Leading vehicle maker Tata Motors rose 5.71 percent to 234.2 rupees while State Bank of India rose 3.81 percent to 2,159.45.

– Taipei gained 0.80 percent, or 55.70 points, to 7,056.15.

– Manila closed 0.83 percent, or 40.91 points, up at 4,966.58.

Alliance Global Group gained 1.01 percent to 11.94 pesos while DMCI Holdings rose 2.61 percent to 55 pesos.

– Wellington rose 1.28 percent, or 43.72 points, to 3,464.52.

Fletcher Building was up 2.61 percent at NZ$6.30, Telecom Corp. rose 1.64 percent to NZ$2.475 and Chorus was up 2.19 percent at NZ$3.26.

– Singapore closed up 1.79 percent, or 48.52 points, to 2,760.83.

Oil rig maker Keppel Corp. was up 1.66 percent to Sg$9.83 while palm oil producer Wilmar International gained 1.71 percent at Sg$3.57.

– Kuala Lumpur ended 0.58 percent, or 9.07 points, higher at 1,569.43.

Conglomerate YTL Corp. gained 2.1 percent to 1.92 ringgit, Kuala Lumpur Kepong added 1.4 percent to 22.54 and financial firm CIMB Group rose 0.9 percent to 7.49.

– Jakarta rose 3.32 percent, or 123.46 points, closing at 3,841.331.

Bank Mandiri was up 3.8 percent to 6,900 rupiah and car maker Astra gained 5.3 percent to 6,950 rupiah.

– Bangkok was up 1.71 percent, or 18.80 points, to 1,117.95.

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.

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