ASEAN KEY DESTINATIONS
Weaker oil prices flattened energy and resource shares in ASEAN today. Singapore slid 0.9%, Malaysia edged down 0.23%, Thailand ended 0.3% percent lower, erasing an early gain of 1.6% Indonesia dropped 1.5% .
The Phillippines lost 0.4% and Vietnam was down 0.9%.
It is my opinion Thai stock market is still very attractive with low valuations, trading at 11.4 times estimated 2011 earnings, still one of the cheapest in Asia, luring foreign funds. A much hyped political showdown ended, as many expected, in a non-violent rally by red-shirted supporters of criminal fugative Thaksin Shinawatra over the weekend.
In Jakarta, coal miner Bumi Resources was oversold (BUMI.JK) dropped 9.7% and stands out as a strong buy in Indonesia.
“BUMI is well on its way to becoming one of the world’s largest providers of thermal coal and on target to capture 10-11% of global demand in the medium term.”
In a year of economic difficulties, BUMI succeeded in producing a very satisfactory performance. In light of this, the Board of Commissioners was, frankly, surprised by the sharp irrational decline in share prices. We are confident, however, that a close reading of BUMI’s historical business practice, management skill and decisions made this year will confirm the share price is tremendously undervalued.
Operational Performance in 2008
Gross Profit in 2008 increased by 114% to US$ 1,613 million, and translates into Earnings per 1,000 Shares of US$ 33.62.
In addition to BUMI’s 2007 strategic partnership with Tata Power, the Company succeeded in acquiring Herald Resources Ltd. of Australia in a competitive bidding process. Taking advantage of the subsequent economic downturn, the Company acquired 2 mid sized coal operations and a 44% indirect stake in a dedicated coal mining operator, to further strengthen BUMI’s strategic position in the thermal coal sector. As the largest coal producer and exporter in Indonesia, BUMI is a model of good corporate governance, and management practices.
This is reflected in its excellent operational performance in 2008, overcoming serious challenges such as a forestry related work stoppage, excessive rainfall and acutely difficult market conditions towards the end of the year. Assets grew by 89% to US$ 5,320 million, up from US$ 2,819 million in 2007. Equity as well grew by 41% to US$ 1,577 million, a solid expansion from 2007. The return on assets remains strong at 12.1%, return on equity was 40.9% in 2008.
"The markets are rising now because that uncertainty was removed," said Marc Pado, US market strategist at Cantor Fitzgerald in San Francisco.
Among drug companies, Pfizer Inc added 1.8 per cent to $US17.22 while Merck & Co advanced 1.7 per cent to $US38.69. Both companies are Dow components.
The Morgan Stanley Healthcare Payor Index of insurance providers rose 1.1 per cent, putting it on track for a sixth straight session of gains.
The Dow Jones industrial average gained 50.41 points, or 0.47 per cent, to 10,792.39. The Standard & Poor's 500 Index gained 5.29 points, or 0.46 per cent, to 1165.19.
The Nasdaq Composite Index gained 18.75 points, or 0.79 per cent, to 2393.16.
The top boost on the Dow was Boeing, which rose 1.9 per cent to $US72.04 after Barclays raised its price target on the planemaker.
Big-cap tech companies lifted the Nasdaq. Oracle Corp advanced 1.8 per cent to $US25.65, putting it among the stocks giving the biggest lift to the index. The company is expected to report results later this week.
Apple Inc gained 1.5 per cent to $US225.70.
On the earnings front, jeweler Tiffany & Co reported a fourth-quarter profit that was weaker than expected but gave a full-year profit view that was above consensus.
The stock edged 0.1 per cent lower to $US47.19.
CNX Gas Corp shares surged 23 per cent to $US37.85 a day after its parent company, Consol Energy Inc, reached a deal with T. Rowe Price Associates to tender CNX shares. Under the terms of the agreement, Consol will buy the shares for $US38.25 per share each, compared with the company's Friday closing price of $US30.80.
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