ASEAN KEY DESTINATIONS
Asean Stock Watch- June 23
US stocks slumped on Wednesday after the Federal Reserve offered a cautious outlook on the struggling economic recovery and vowed to maintain its policy of ultra-low interest rates.
The Dow Jones Industrial Average fell 80.34 points (0.66 percent) to close at 12,109.67. The broader S and P 500 tumbled 8.38 points (0.65 percent) to 1,287.14, while the tech-heavy Nasdaq Composite dropped 18.07 points (0.67 percent) to 2,669.19. In a highly watched announcement, the Fed's interest rate-setting body, the Federal Open Market Committee, said it would keep the federal funds rate at near-zero levels "for an extended period" to boost the flagging recovery.
The Fed also slashed about a half point off its estimate of gross domestic product growth for 2011, to a range between 2.7 per cent and 2.9 per cent. Markets were waiting to see what kind of new stimulus policies the Fed might pursue after the end of June, when it plans to concludes its US$600-billion second round of quantitative easing, dubbed QE2. "
The Fed didn't say anything new. (It) certainly didn't offer QE3," said Peter Cardillo of Avalon Partners. "It was a neutral event for the stock market and the reason why we are seeing stocks off a little bit is because the dollar is strengthening," he added. A stronger dollar is bad for US exporters because it makes their goods more expensive abroad. Boeing shares dropped 2.5 per- cent as its European archrival Airbus enjoyed a flood of deals at the Paris International Airshow, including a US$15 billion order for 150 of Airbus's new A320neo models from Indian airline IndiGo.
Indonesia’s benchmark stock index continued its climb for a third day on Wednesday, following gains in the region on the back of optimism that Greece will avoid default and that interest rates in the US will remain low.
The Jakarta Composite Index closed at 3,821.83, gaining 26.89, or 0.7 percent. More than 5.22 billion shares worth Rp 3.82 trillion ($443 million) were traded. Gainers beat decliners 135 to 77, while foreign investors bought Rp 528 billion more then they sold.
“The index followed the regional market, which has been affected by positive trading in the US in the last three days,” said Deni Hamzah, an equity analyst with Corfina Capital.
Shares in Asia gained amid optimism that Greece would avert default and positive sentiment in the US that the Federal Reserve would likely affirm a decision to end bond purchases and repeat a pledge to keep the key interest rate close to zero to help boost growth in the world’s top economy.
Across Asia, the Nikkei in Japan advanced 1.8 percent, and Hong Kong’s Hang Seng added less than 0.1 percent.
In local stocks, Indonesia’s miscellaneous industries led gains, advancing 1.3 percent. Finance followed, up 1.1 percent, while the service sector rose 1 percent.
Bumi Resources, the country’s largest coal producer, advanced 3.2 percent to Rp 3,200. The company received $200 million in loans from UBS to help fund expansion and refinance its loans. Bakrie & Brothers rose 2.9 percent to Rp 71.
United Tractors, the biggest heavy equipment distributor, gained 1.1 percent to Rp 23,500. Brokerage CLSA raised its rating to “buy” from “outperform,” saying the company is a “beneficiary of growing demand for coal.”
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures contract on Bursa Malaysia Derivatives opened mostly higher this morning.
At 9.37a.m., June 2011 and September 2011 rose one point each to 1,564.5 and 1,562.5, respectively, December 2011 was up 1.5 points at 1,560 while July 2011 declined half-a-point to 1,564.
Volume stood at 1,045 lots while open interest totaled 25,505 contracts.
The underlying FBM KLCI on the cash market slipped 1.79 points to 1,565.56 after 37 minutes of trading.
Philippines share prices and the peso extended their rise on Wednesday following a parliamentary vote of confidence in the Greek government, raising hopes that it would avoid a default on its debt.
At the Philippine Stock Exchange, the composite index rose 33.47 points, or 0.79 percent to 4,245.28, while the broader all-shares index added 17.73 points, or 0.60 percent to 2,971.22. A total of 3.07 million stocks worth P4.82 billion changed hands.
Advancers beat decliners, 94 to 40, while 43 issues were unchanged.
“The PSEi closed at 4,245.28 after US markets were similarly higher last night,” said Prince Anthony Yeung of AB Capital Securities Inc.
The sustained strength of Philippine Long Distance Telephone Company and Bank of the Philippine Islands, which was heavily sold down on Friday, continued to lift the market, rising 1.21 percent and 1.4 percent, respectively.
Atlas Consolidated Mining and Development Corporation stole the market spotlight Wednesday, rising 4.40 percent to become the most active stock on rumors that an investor was interested to buy the firm.
“Its largest revenue and income contributor is Carmen Copper. Atlas has been gearing up for a turnaround since late last year and is well on its way to achieve its goal,” said Yeung. At the Philippine Dealing System, the peso closed at 43.36 against the US dollar, up 10 centavos from Tuesday’s 43.46 finish.
The dollar-peso pair opened at 43.41 and moved to a high of 43.45 and a low of 43.33. A trader said the Bangko Sentral ng Pilipinas was buying at the levels between 43.45 and 43.40 to stem the local unit’s strength.
Traders said Asian currencies took their cue from external developments as the Federal Reserve began a two-day meeting against the backdrop of a weakening US economy.
“This slowing economy was widely expected to force policymakers to plan for the possibility that things may get worse. The central bank’s quarterly forecasts, which will be released after the meeting, are likely to be revised down to reflect the recent weakness in the recovery, though officials should reiterate their expectation for a second-half rebound,” an analyst from Metropolitan Bank and Trust Company said.
The dollar-peso pair is expected to trade within a range of 43.40 to 43.60 toda
Singapore shares opened higher on Thursday, with the benchmark Straits Times Index at 3,044.01 in early trade, up 0.04 percent, or 1.18 points.
Around 52.7 million shares exchanged hands.
Losers beat gainers 56 to 55.
The Stock Exchange of Thailand main index went down 3.86 points or 0.38 percent to close at 1,023.86 points at the end of trading session on Wednesday afternoon. The trade value was 21.30 billion baht.
The SET50 index ended at 714.06 points, down 3.72 points or 0.52 percent, with a total trade value of 14.16 billion baht.
The SET100 index fell 7.45 points or 0.48 percent to stand at 1,555.80 points, with a total turnover of 16.22 billion baht.
The MAI index went up 1.56 points or 0.53 percent to close at 296.68 points, with total transaction value of 1.10 billion baht.
Top five most active values were as follows;
PTT closed at 330.00 baht, down 4.00 baht (1.20 percent)
BBL closed at 150.50 baht, down 0.50 baht (0.33 percent)
MALEE closed at 15.00 baht, up 13.43 baht (855.41 percent)
PTTCH closed at 148.50 baht, down 1.50 baht (1.00 percent)
SCC closed at 345.00 baht, up 5.00 baht (1.47 percent)
The VN-Index retreated by 0.7 percent Wednesday following a strong rebound on Tuesday, closing yesterday's trades on the HCM City Stock Exchange at 439.63 points.
The value of trades rose by 11 percent over the previous session to VND647 billion (US$31.4 million), but the overall volume of trades fell 16 percent to just 24.9 million shares, the lowest level in two weeks.
Decliners outnumbered advancers by 126-80.
Blue chips such as Vietinbank (CTG), property developer Hoang Anh Gia Lai (HAG), steel producer Hoa Phat Group (HPG) and software giant FPT all rose.
Meanwhile, insurer Bao Viet Holdings (BVH) dropped by 1.2 percent and Phu My Fertiliser (DPM) slumped 0.3 percent, helping drag down the VN-Index. Investors dumped shares of real estate developer Vincom (VIC), which bottomed out after five consecutive sessions last week in which they hit their ceiling prices.
VIC denied issuing any information last week that affected its share price. "The buys of our shares stemmed from actual demand on the stock market and were beyond our control," the company said in a statement.
Saigon Securities Inc (SSI), with 1.55 million shares changing hands, was the most-active share on the southern bourse, closing unchanged at VND19,000 (US$0.90) a share.
On the Hanoi Stock Exchange, the HNX-Index lost another 0.83 per cent to close at 76.41 points. The value of the day's trades rose 12 percent to VND468.6 billion ($22.7 million) on a volume of 38.2 million shares. Losers edged gainers by 131-122.
VNDirect Securities (VND), which had climbed 3.5 percent the previous day to VND11,900 ($0.60) per share, was the most-active share nationwide with almost 4 million changing hands.
"Hot shares on the northern bourse, despite witnessing great profit-taking, finally ended the session in green," said Stoxplus Financial Media Co analyst Dang Anh. "Corporate investors, instead of waiting for further economic signals, may likely sell off in the sessions at the end of this week as the time for making net asset valuations is approaching."
Foreign investors continued to buy shares worth a net of VND27.2 billion ($1.3 million) in HCM City but sold a net of VND3 billion ($145,600) worth of shares on the northern bourse.
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