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ASEAN Markets Get G20 Boost

Shayne Heffernan

Asean Markets moved higher again today and look set to keep that trend for sometime. The big demand is for ASEAN stocks that generate their revenue from within the ASEAN trade zone.

Ebeling Heffernan expect to see a new round of buying by international investors after the G20 meeting that acknowledged the multispeed recovery and clearly accepted that Asia will continue to grow at a faster rate than the USA and Europe.

The region got an additional boost after fears eased Washington would draft a harsh bill for regulating the banking sector and was helped by an unremarkable conclusion to a Group of 20 summit where leaders agreed to seek their own path to economic growth.

China on Monday set the central parity rate -- the centre point of the yuan's allowed trading band -- at 6.7890 to the dollar, a fraction stronger than Friday's 6.7896 and the strongest rate since 2005.

In Monday trade, the yuan was slightly weaker at around 6.7912 to the dollar.

The move came after US President Barack Obama said in Toronto he expected China to fulfill promises to allow flexibility in the yuan, which critics say is 40 percent undervalued, giving Chinese exports an unfair advantage.

Thailand once again outperformed the region, with banks listed on The Stock Exchange of Thailand as the expectations for second quarter profits improve. Bangkok Bank (BBL) was up 0.8 percent and Siam Commercial Bank SCB rose 0.6 percent. Thailand recorded net foreign buying of $74 million last week.

Ebeling Heffernan have a Strong Buy on Bangkok Bank with a 200 baht price target in 2011.

Stocks with most active value were as follows:

TCAP increased to 29.75 baht, up 1.75 baht.

CPF increased to 20.30 baht, up 0.30 baht.

BANPU increased to 618.00 baht, up 2.00 baht.

BTS increased to 0.84 baht, up 0.08 baht.

TOP increased to 45.25 baht, up 1.50 baht.

SET index closed at 804.40, up 10.73 or 1.35% in trade worth 17.15 billion baht on Monday.

Banks also led in Jakarta where they extended gains from last week on expectations a low interest rate environment would continue to boost loan growth.

Foreign investors bought another $37.2 million of stock on the day. The country's third-biggest lender, PT Bank Central Asia (BBCA), was up 0.9 percent, state lender Bank Mandiri (BMRI) rose 1.7 percent and another state-owned lender, PT Bank Tabungan Negara (BBTN), jumped 5.7 percent. Bumi jumped to 1900.

Jakarta rose 0.30 percent, or 8.71 points, to 2,955.73.

Kuala Lumpur closed 0.91 points lower at 1,325.54.

Berjaya Corp was down 9.60 percent to 1.23 ringgit and herbal product manufacturer Hai-O shed 6.10 percent to 3.87. Glove maker Top Glove gained 2.10 percent to 13.66.

Manila closed 0.34 percent, or 11.44 points, higher at 3,363.90.

Universal Robina Corp. rose 3.45 percent to 30 pesos while Megaworld Corp. jumped 1.47 percent to 1.38 pesos.

Metropolitan Bank and Trust Co. fell 0.79 percent to 62.50 pesos.

Singapore closed 0.64 percent higher at 2,869.99.

Property shares climbed higher, with top developer CapitaLand (CATL.SI) rising 0.5 percent while Keppel Land (KLAN.SI) and City Development (CTDM.SI) rose more than 1 percent. The city-state's strong factory output data on Friday bodes well for the economy.


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