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ASEAN STOCK WATCH Asean Affairs   2  March 2011

ASEAN Markets to Fall

Shayne Heffernan

Expect a sharp fall in Asean Equities today as USA and global issues dominate investor sentiment.

Investors fear higher oil prices will increase energy and gasoline costs for consumers. Brent crude oil futures rose above $US114 per barrel, hitting economically sensitive sectors such as materials and industrials.

Stocks have taken their cue from oil since the start of turmoil in the Middle East and North Africa in January. The S&P had its weakest performance since November last week but still tallied three months of gains.

Thailand will see a sell-off today following the USA lead, we suggest waiting until the afternoon session before buying, and not to much, elections are looming and it will spark more Red/Yellow protests.

Our Best Buys, PTT, IRPC, Thai Rubber.


PTT Plc, Thailand’s largest company by market capitalisation, reported full-year consolidated profit of 83.1 billion baht, up by 39.5% from 2009 on crude price increases causing higher equity income.

Net income of PTT and its subsidiaries was 29.26 baht a share, up from 21.06 baht a share in 2009.

In 2010, sales and services posted 1.9 trillion baht, an increase of 19.8 percent from 1.58 trillion in consolidated income in 2009, due to higher sales volume and sales prices.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) including other non-operating income and expenses was 167.37 billion, up by 17.3 percent from 142.7 billion last year.

PTT and its subsidiaries had total assets of 1.25 trillion baht as of the end of December. Total liabilities were 677.83 billion, of which 270.49 billion was current liabilities, including the current portion of long-term loans due within one year – 28.56 billion – and 342.42 billion in other long-term loans. Shareholders’ equity was 571.313 billion.


IRPC has maintained 2011 revenue target of 221 billion baht ($7.2 billion) despite a 30-day major maintenance shutdown of its refinery and petrochemical units, senior executive for corporate planning Atikom Terbsiri told reporters today, they also expect 2011 EBITDA to be higher than 8.32 billion baht in 2010 due to cost saving scheme and improving product spread.

Thai Rubber

Thai Rubber Latex Corporation (Thailand) Pcl. is a Thailand-based company engaged in the manufacture and sale of latex concentrated and prevulcanized latex.

The company’s products include disposable rubber gloves, extruded rubber threads and rubber foam for bedding equipment and others. The company operates eight plants in the northern, southern and northeastern regions of Thailand with a total production capacity of 250,000 tons per annum.

On Dec. 25, 2009, the Company sold its 45 percent investment in Thaitex RCP Technology Limited. As of Dec. 31, 2009, the company had five direct subsidiaries, namely Thai Rubber Latex Group Co., Ltd., World Flex Public Company Limited, Thai Tank Installation Co., Ltd., Thai Rubber City Co., Ltd. and Agrowealth Co., Ltd.

MAX METAL CORP a buy as they rebuild the business.

The company was registered on Aug. 30, 1991, [Registration number 0107538000282] and registered as a public company on May 22, 1995. After that as of May 19, 2010, the Company was registered renamed MAX METAL CORPORATION PUBLIC COMPANY LIMITED its registered office address is at 480 Moo 1, Bankai – Banbung Road, Tambon Laharn, Ampur Pluagdaeng, Rayong. Branch office address is at 496-502 floor 18th Ammarin Plaza Building, Plernjit Road, Lumpini, Bangkok.

The company operates business of proceeds regarding provision and distribution of steel products and production and distribution of small diesel engine, engine components and spare parts for agriculture under the trading mark of AMAC “Sing Ka Nong Na”.

The Stock Exchange of Thailand (SET) composite index on Tuesday gained 6.57 points or 0.67 percent to close at 994.48 points. The market value was 25.92 billion baht, with 3.86 billion shares traded.

Top five most active values were as follows;

TMB closed at 2.38 baht, up by 0.10 or 4.39 percent.

BANPU remained at 726.00 baht.

KBANK closed at 119.50 baht, up by 2.00 or 1.70 percent.

SCB closed at 103.00 baht, up by 1.00 or 0.98 percent.

CPF closed at 23.60 baht, down 0.20 or 0.84 percent.

Bursa Malaysia will be trading lower from the open today as global events weigh on investor sentiment.

Genting, Sime Darby and Maybank are our best buys today.


Genting Bhd’s pre-tax profit for the year ended Dec. 31, 2010 rose 74 percent to a new high of RM4.394 billion compared with RM2.528 billion in the previous year.

In a statement today, the company said group revenue rose 71 percent to record a new high of RM15.194 billion from RM8.894 billion.

The group’s adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) rose by 89 percent to a new high of RM7.11 billion in 2010 (2009: RM3.77 billion).

The increased revenue came mainly from the leisure & hospitality and plantation divisions, it said.

For the fourth quarter 2010, Genting’s pre-tax profit rose to RM1.183 billion from RM585.660 million in the previous corresponding quarter as revenue increased to RM4.086 billion from RM2.320 billion.

Sime Darby

Sime Darby Bhd posted a 104.8% increase in net profit to RM877.1mil for its second quarter from the same period a year ago with earnings from its plantation, motor and industrial divisions providing much of the lift.

But the company admitted that the recent bad weather in Malaysia and Queensland would affect its plantation and industrial businesses and overall profit growth in the third quarter but not sufficiently to derail its full-year net profit target of RM2.5bil.


Malayan Banking Bhd (Maybank) posted a net profit of RM1.13bil, or 15.72 sen per share, for its second quarter ended Dec. 31, 13.7 percent higher than the RM993.5mil, or 14.04 sen per share, reported in the same quarter of 2009 after almost all segments performed better and bad loan provisions were lower.

Revenue for the period stood at RM5.19bil compared with RM4.67 billion a year ago.

The country’s largest bank by assets also declared an interim gross dividend of 28 sen.

Yesterday in Kuala Lumpur the market traded within a narrow range of 9.54 points between an intra-day high of 1502.24 and a low of 1492.70 during the session.


The Winners were GENTING (+27 sen to RM10.26), AXIATA (+11 sen to RM4.99), SIME (+8 sen to RM9.04), GENM (+11 sen to RM3.42) and AMMB (+12 sen to RM6.33).

The Losers were TENAGA (-7 sen to RM6.23), UMW (-4 sen to RM7.25), MAS (-3 sen to RM1.86), BAT (-20 sen to RM47.80) and YTL (-3 sen to RM7.07).

Market breadth was negative with 356 gainers as compared to 412 losers.

Trading volume decreased to 1117.51 mil shares worth RM1509.41 mil as compared to Monday’s 1163.36 mil shares worth RM2042.21 mil.

Singapore will dive at open and there will be great buying opportunities, Tiger Airways, Noble Group,

Tiger Airways

Air Asia’s Tony Fernnandez’s racist reference to Tony Davis’ doing business in this region “white Guys running a business in Asia” has come back to bite him this week.

Tiger Airways look set to become the leading low-cost carrier in Asia after a deal with Thai Airways International.

The deal will create Thai Tiger Airways Co Ltd (TTA) and will lift the value of Tiger Airways substantially.

Under the joint-venture agreement, THAI is to hold 49.9 percent in TTA with unnamed Thai individual shareholders holding 1.1 percent.

Tiger Airways will hold 39% in TTA and RyanThai, the holding firm of Ryanair, the Irish LCC that is also a shareholder in Tiger Airways, has a 10 percent stake.

TTA has been stalled ever since the original memorandum of understanding (MoU) to set up the airline was signed on August 2 last year.

The MoU has been renewed three times as the Transport Ministry has found faults with the TTA plan and required THAI meet more requirements, much to the frustration of Dr Piyasvasti, who last Friday branded the ministry’s action “unethical”.

THAI said it gave the ministry the required information and it was looking at the documents. It noted RyanThai will be represented on the TTA board by Declan Ryan, one of the founding shareholders of both Tiger Airways and Ryanair.

One element spurring opposition to TTA is the involvement of Temasek, the Singaporean government’s investment arm, and Singapore Airlines, THAI’s archrival,which is a partial owner of Tiger.

Noble Group

Shayne Heffernan strong buy, Noble Group rose as much as 4.9 percent on Tuesday after it said its fourth-quarter net profit rose 192 percent year-on-year to $247.4 million.

The firm reported record net profit of $606 million for the year ended Dec 31, 2010, compared with $556 million a year earlier, helped by broad-based growth at its commodity segments. At 0115 GMT, Noble shares were up 4.4 percent at S$2.14 on a volume of 9.1 million shares.

Noble Group (NASDAQ:NOBGF) has been given a $4.00 price target for 2011 by Shayne Heffernan.

Noble Group (NASDAQ:NOBGF) is Asia’s biggest supplier of raw materials. Only 22 percent of its revenue comes from agriculture, with the remainder coming from materials such as iron ore.

Noble Group (NASDAQ:NOBGF) had year-over-year sales growth of 78.7 percent during the last quarter. The company has reported $48.8 billion in sales over the past 12 months and is expected to report $61.7 billion in sales in the next fiscal year.

Noble Group Limited is an investment holding company. Its subsidiaries, jointly controlled entities and associates comprise managing the global supply chain of agricultural, industrial and energy products; ship ownership, chartering and the provision of technical ship management services; trade finance; coal mining, soybean and sugar cane crushing activities and ethanol production.

It has two segments: Agriculture, which includes grain, coffee, cocoa, cotton, sugar and fertilizer product divisions; Energy, which includes coal and coke, oil and gas (which includes ethanol), petrochemical (which includes polymers), and carbon credits product divisions; metals, minerals and ores, which includes iron ore, ferro alloys/manganese ore/chrome ore, alumina/aluminum and steel products product divisions, and logistics, which comprises vessel chartering, vessel ownership and vessel management. On June 16, 2009, it acquired a further 66 percent interest in Gloucester Coal Limited.

Yesterday in Singapore shares closed 1.9 percent higher on Tuesday, with the benchmark Straits Times Index at 3,067.60, up 1.9 percent, or 57.09 points.

About 81.6 billion shares exchanged hands.


Shayne Heffernan brings more than 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over US$500m and 1 that reach a peak market cap of US$15billion. He has managed and overseen start-ups in Mining, Shipping, Technology and Financial Services.


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This year in Thailand-what next?

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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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