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ASEAN STOCK WATCH 23 March 2010

Shayne Heffernan
www.livetradingnews.com

Most ASEAN stock markets fell on Monday and as I suggested on Friday it was the day to be buying, the USA has rallied over night and I do expect to see a rally today in all Asian markets.

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
One example of skill under pressure in 2008 was management literally battling against eight months of persistent rains, a subcontractor underperformance, however the management was able to increase overall production over 2007 levels.

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.

Overseas Overnight
US stocks rose on Monday on gains in the tech sector and after a bill overhauling the healthcare system was passed, ending much of the uncertainty for investors.
The US House of Representatives approved the bill late on Sunday, and while analysts have raised concerns it will squeeze company profits and add to costs, they said much of the negative impact was already priced in.

"The markets are rising now because that uncertainty was removed," said Marc Pado, US market strategist at Cantor Fitzgerald in San Francisco.
Pado added that investors now know who the "winners and losers" of the bill would be, "with pharmaceutical companies selling more drugs, but insurers unable to raise rates like they could before".

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.
Insurance companies were mixed, with WellPoint Inc down 0.6 per cent to $US64.66 and Aetna Inc up 0.5 per cent to $US34.64. Many insurance firms posted strong gains in the week before the bill was passed.

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.

Global Market Indexes

Americas
Price
Change (%)
1 Year %
Last Updated
flag
Toronto Composite
11983.85
+35.87 (0.30%)
+40.88%
Mar 22, 4:00pm
flag
Mexican Bolsa IPC Index
33113.10
+90.26 (0.27%)
+71.01%
Mar 22, 4:00pm
flag
Brazil Bovespa Index
69052.49
+223.51 (0.32%)
+72.30%
Mar 22, 4:00pm
flag
Argentina Merval Index
2408.60
+27.50 (1.15%)
+125.20%
Mar 22, 4:00pm
flag
Chile IPSA Index
3775.88
+11.19 (0.30%)
+51.78%
Mar 22, 4:00pm

Asian Pacific
Price
Change (%)
1 Year %
Last Updated
flag
Nikkei 225 Index
10824.72
+80.69 (0.75%)
+36.23%
Mar 22, 4:00pm
flag
ASX All Ordinaries
4847.50
+0.00 (0.00%)
+42.36%
Mar 22, 4:00pm
flag
Seoul Composite
1672.67
-13.44 (-0.80%)
+42.85%
Mar 22, 4:00pm
flag
Hong Kong Hang Seng
20933.25
-437.57 (-2.05%)
+63.11%
Mar 22, 4:00pm
flag
Shanghai
3074.58
+6.83 (0.22%)
+34.79%
Mar 22, 4:00pm
flag
Taiwan Weighted
7835.98
-61.93 (-0.78%)
+57.93%
Mar 22, 4:00pm
flag
Singapore Straits Times
2889.18
-26.52 (-0.91%)
+80.92%
Mar 22, 4:00pm
flag
Bombay Sensex Index
17410.57
+0.00 (0.00%)
+94.17%
Mar 22, 4:00pm
flag
Jakarta Composite
2702.40
+0.00 (0.00%)
+98.58%
Mar 22, 4:00pm
flag
Kuala Lumpur Composite
1293.65
-2.95 (-0.23%)
+50.98%
Mar 22, 4:00pm
flag
PSE Composite
3083.89
-13.34 (-0.43%)
+68.16%
Mar 22, 4:00pm
flag
Sri Lanka All Share
3743.00
-1.92 (-0.05%)
+130.79%
Mar 22, 4:00pm

Europe
Price
Change (%)
1 Year %
Last Updated
flag
FTSE 100 Index
5644.54
-5.58 (-0.10%)
+46.88%
Mar 22, 4:00pm
flag
Paris CAC 40
3928.00
+2.56 (0.07%)
+40.73%
Mar 22, 4:00pm
flag
Frankfurt Index
5987.50
+5.07 (0.08%)
+47.16%
Mar 22, 4:00pm
flag
Milan BCI General
15743.00
+0.00 (0.00%)
+29.97%
Mar 21, 5:30pm
flag
Belgium 20 Index
2634.45
-4.83 (-0.18%)
+54.18%
Mar 22, 4:00pm
flag
Swiss Market Index
6866.43
-14.33 (-0.21%)
+43.43%
Mar 22, 4:00pm
flag
OSE Norway All Share
416.79
+0.53 (0.13%)
+56.74%
Mar 22, 4:00pm
flag
ATX Vienna
2561.06
-16.94 (-0.66%)
+57.37%
Mar 22, 4:00pm
flag
Amsterdam Total Return General
338.13
-0.52 (-0.15%)
+58.96%
Mar 22, 4:00pm
flag
Madrid General
1123.14
-13.60 (-1.20%)
+38.63%
Mar 22, 4:00pm
flag
Stockholm General Index
323.71
+1.05 (0.33%)
+59.90%
Mar 22, 4:00pm

Africa/Middle East
Price
Change (%)
1 Year %
Last Updated
flag
Israel TA 100 Index
1137.03
-7.24 (-0.63%)
+84.26%
Mar 22, 11:45am
flag
TEL-TECH INDEX
316.28
-2.72 (-0.85%)
+92.03%
Mar 22, 11:45am
flag
TEL-TECH-15 INDEX
274.34
-1.17 (-0.42%)
+81.51%
Mar 22, 11:45am

 

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