|ASEAN STOCK WATCH
||1 March 2010
Asean Pre Market
Political unrest once again dominates the news reports about Thailand, but investors in Thai stock market and those investing in exchange traded funds (ETFs) remained unmoved about the reports. Instead, investors understand the true situation is not as it is repoted in the International Media and are far more focused on Thailand’s recovery in exports, private investment and household spending.
Ebeling Heffernan are predicting a positive week on the SET. AFTA is responsible for some of Thailand’s recovery. Exports to Asian markets, especially Asean and China, expanded more quickly than to the United States and Europe.
Exports in January were worth $13.7 billion, an improvement of 31% year-on-year from the very weak figures in January 2009, while import values expanded 50% year-on-year.
Tourist arrivals also recorded robust growth compared with January 2009, when the country was recovering from the seizure of Bangkok’s airports by political protesters. Foreign arrivals came primarily from within Asia, while hotel occupancy averaged 65%, close to the average of five years ago.
News from Singapore continues to be good.Jan factory output grows 39.4% Singapore’s factory output expanded 39.4 per cent year-on-year last month, thanks to a production surge in the electronics and biomedical cluster, the latest figures show.
A record 3.38 million passengers passed through Changi Airport last month – a 10 per cent rise from January last year and almost 9 per cent more than the pre-crisis level of January 2008.
Singapore’s STI is due for a positive week.
AirAsia managed to return to profitability in the fourth quater despite revenue shedding 1% to RM894m, due to lower finance costs and net gain from currency hedges of RM29m. On a full year basis, 2009 net profit was RM549m, a reversal from the net loss of RM496.6m in 2008. The loss came from an exceptional item of RM614.9m from the unwinding of its derivative instruments. The low cost carrier has predicted better earnings for the first quater of 2010 as it expects a recovery in passenger travel.
More companies are expected to tap the Malaysian stock market for funds this year as investor sentiment improves on the economic recovery.
Malaysian property developer Sunway City (SWCB) was looking to raise about 1 billion ringgit ($294.3 million) in the first half of 2010 by floating its prized property assets in a real estate invesment trust (REIT).
Sunway City has hired RHB Investment Bank and Credit Suisse (CSGN) as the main coordinators for the planned listing, the biggest ever REIT listing in the Southeast Asian country, sources told Reuters in January.
The global forecast for the Asian markets is vry optimistic, riding a modest rebound in the price of commodities. Technology and financial stocks also are expected to provide support. The U.S. markets suld closehe week higher, and the Asian bourses are forecast to follow suit.
US stock market will be all about the numbers this week.Payrolls could give the some direction as investors comb through the key report on one of the economy’s weakest areas.Besides payrolls, Wall Street will have a flurry of other numbers to reflect on, including January personal income and spending, as well as February domestic car and truck sales.
Endless news on Greece’s unimportant debt problems could also fire up investors in the wrong direction after a week of little movement in stocks, the market ended Friday’s choppy session slightly higher in light trading volume due to a heavy winter snow storm that hit New York City and much of the US Northeast, forcing businesses and transportation systems to close. It was New York City’s second major snow storm this month.
The Institute for Supply Management will give Wall Street important information on manufacturing and services this week, when it releases its February indexes on those sectors.
February’s non-farm payrolls report from the US Labor Department will be the main event as job losses continue to give investors false reason to question the sustainability of the economy’s recovery.
Unemployment at this stage of the recovery is to be expected, in fact, rising unemployment has existed in every major recovery in the last 100 years.Any sell off from Greek news or Unemployment news is a buying opportunity.
Fourth-quarter earnings reports are winding down, but investors will see results from a handful of Standard & Poor’s 500 companies, including natural gas producer and pipeline operator El Paso Corp and major US office supplies retailer Staples.
While all three indexes finished slightly lower for the week, the stock market capped its best month since November.
For the month of February, the Dow Jones industrial average was up 2.6 per cent, the S&P 500 was up 2.9 per cent and the Nasdaq Composite Index was up 4.2 per cent.
Although February was sweet, the final week of the month went down in the loss column. For the week, the Dow slid 0.8 per cent, while the S&P 500 shed 0.4 per cent and the Nasdaq slipped 0.3 per cent. Lingering concerns about Greece’s fiscal deficit problems and its effects on the euro were among factors keeping investors on edge.
The S&P 500 has climbed as much as 70 per cent from its lows in early March 2009, largely because of stronger-than-expected economic data and earnings, but it has since retraced some of those gains.
Recent snow storms and other harsh winter weather may contribute to the weaker February jobs picture and make the data even harder to forecast, analysts said.
But, they said, the numbers remain among the most important for the economic outlook.
For Friday’s jobs report, the consensus forecast, according to economists polled by Reuters, calls for a loss of 50,000 jobs in February, compared with a decline of 20,000 in January. The US unemployment rate is forecast to rise to 9.8 percent in February from 9.7 per cent in January.
Productivity has gone through the roof, and so have earnings, and that’s likely to translate into hiring eventually, bad employment numbers at this stage simply do not matter.
More than 70 per cent of S&P 500 companies have beaten earnings estimates so far for the fourth quarter, well above the 61 per cent in a typical quarter, according to Thomson Reuters, which began tracking data in 1994.This is a bull market.
With 96 per cent of S&P 500 fourth-quarter results already in, earnings are expected to increase 201.3 per cent from a year ago, when the economic downturn took a big toll on corporate results.
SPENDING, FACTORIES AND SERVICES
Investors may need to keep the virtual snow shovels handy as they cope with piles of economic data next week, starting with Monday’s personal income and consumption, or spending, report for January. Personal consumption is forecast up 0.4 per cent in January, twice December’s 0.2 per cent gain.
The ISM also will give its February snapshot of manufacturing activity on Monday. The forecast from the Reuters poll: An ISM manufacturing index at 57.5 in February, down from 58.4 in January. Construction spending for January also will be released on Monday.
Monthly car and truck sales will be reported on Tuesday. The consensus forecast indicates a slight decline in total vehicle sales to an annual rate of 10.50 million units in February from 10.78 million in January.
Wednesday will bring the ISM non-manufacturing index, which will give a reading of how the important US services sector is faring. A private-sector report on national employment in February from ADP is also due that day.
And while Wall Street’s skies may be a hazy winter gray, the trendy shade will be beige for market professionals. The Federal Reserve’s Beige Book, a collection of anecdotal reports on the US economy from the Fed’s 12 district banks, will be released on Wednesday.
Thursday’s economic indicators will include the latest weekly jobless claims, revised fourth-quarter data on productivity and unit labor costs, and the January pending home sales index.
Jan personal income
Jan construction spending
Feb ISM index
Q4 productivity (revised)
Jan factory orders
Jan pending home sales
Feb non-farm payrolls