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ASEAN STOCK WATCH Asean Affairs 26 March 2013  

ASEAN Markets Set to Trade Lower

Wiping out earlier gains that drove the S&P 500 index to less than a point away from its record close, stocks fell after Jeroen Dijsselbloem, who heads the Eurogroup of euro-zone finance ministers, told Reuters and the Financial Times that when failing banks need rescuing, euro-zone officials would turn to the bank's shareholders, bondholders and uninsured depositors to contribute to their recapitalization.

Europe is no longer a safe place to bank.

In China

Chinese consumers expressed strong optimism about the country's economic prospects in a survey, with 75 percent of respondents expecting their financial status to improve over the following decade.

Despite slower economic development, three quarters of Chinese consumers are still very confident that they will achieve a better individual or family financial situation in the next 10 years. The figure is 11 percent higher than that of the previous year, according to a survey conducted by marketing services firm Epsilon.

About 400 Chinese consumers from different economic backgrounds were polled. The Chinese report is one of the global consumer reports done by Epsilon.

Based on their strong confidence, about 30 percent of Chinese respondents said that they were willing to spend more money in entertainment. The figure was 6 percent to 8 percent higher than that in other Asia-Pacific countries.

The survey also found that Chinese consumers no longer worship foreign brands blindly. Though they still respect international brands, more Chinese people tend to support domestic brands.

About 43 percent of Chinese shoppers expressed strong support for domestic brands, up 12 percent year-on-year, the survey showed.

The Cyprus Syndrome

Cyprus sell out leaves all EU Banks in jeopardy.

If you think the Cyprus “deal” is reason to celebrate, you are wrong, yet again the EU has opted for a default that should lead to a run on Banks through out Europe.

The EU agreed to steal the deposits of businesses, individuals and institutions to fund the failing nation of Cyprus, a move that maybe repeated in Greece, Spain, Italy and Ireland.

Cyprus sold out to international lenders on Monday for a EUR 10-B ($13-B) bailout that will shut down its 2nd largest bank and inflict heavy losses on uninsured depositors.

The move is a troubling sign for EU nations as it may serve as a model for other failing economies in the region. Offshore funds and financial institutions using Bank of Cyprus will lose everything except the $100,000 maximum guarantee.

The agreement emerged after fraught negotiations between President Nicos Anastasiades and heads of the European Union, the European Central Bank and the International Monetary Fund, hours before a deadline to avert a collapse of the banking system.

The plan, swiftly endorsed by Eurozone finance ministers, will spare the east Mediterranean island a financial meltdown by stealing the funds of depositors, a new weapon in the EU financial arsenal that will not go unpunished.

Deposits above EUR 100,000, which under EU law are not guaranteed, will be frozen and used to resolve debts, and Laiki will effectively be shuttered, with thousands of job losses.

Across the EU wise investors will begin removing any amount in any EU controlled bank over EUR 100,000.

The Key issues in dispute were how Cyprus would raise EUR 5.8-B from its banking sector towards its own financial rescue, and how to restructure and resolve the outsized banks.

The EU’s economic affairs chief Olli Rehn said there were no good options but “only hard choices left” for the latest casualty of the Eurozone crisis.

With banks closed for the last week, the Central Bank of Cyprus imposed a 100-Euros per day limit on withdrawals from cash machines at the 2 biggest banks to avert a run.

Socialist French Finance Minister Pierre Moscovici took great delight in stealing the funds of wealthy investors, saying it was the island’s offshore business model that had failed.

“To all those who say that we are strangling an entire people … Cyprus is a casino economy that was on the brink of bankruptcy,” he told Canal Plus television.

The Jakarta Composite Index surged 1.16 percent, or 54.74 points, to close at 4,777.90 on Monday, while Asian markets rallied after Cyprus and international creditors agreed to the outlines of a bailout, which was approved by euro-area finance ministers.

Singapore’s benchmark Straits Times Index rose 8.91 points to 3, 267.48 points. Trading volume was 5.21 billion shares worth 1.29 billion Singapore dollars. Advancers outnumbered decliners 288 to 153, while 508 stocks did not move.

OSIM International jumped 2.4 percent to 1.95 Singapore dollars. DBS Group Research said that the massage chair maker is a beneficiary of the rising middle class population in China, with 56 percent of revenues originating from North Asia.

IEV Holdings Limited closed flat at 47 Singapore cents. It has made its foray into the renewable energy business with a biomass production project in Vietnam. The firm said that it planned to construct its maiden plant to manufacture pellet forms of rice- husk biomass in the middle of the Mekong Delta.

Mencast Holdings gained 2.4 percent to 65 Singapore cents. It has revised the 1-for-1 bonus issue proposed on February 26 to be on the basis of 1 Bonus Share for every 4 existing shares held.

Among top gainers, Dairy Farm International rose 2.1 percent to 12.15 U.S. dollars, while Jardine Cycle and Carriage became one of the top losers by falling 1 percent to 51.05 Singapore dollars. (1 U.S. dollar equals to 0.77 Euros and 1.24 Singapore dollars)

The main-share Philippine Stock Exchange index surged by 78.88 points or 1.21 percent to close at 6,597.59.

The day’s gains were led by the property counter (+2.28 percent) while the financial, industrial and services counters also rose by over 1 percent.

Value turnover amounted to P8.98 billion.  There were 99 advancers that edged out 64 decliners while 34 stocks were unchanged.

The biggest index gainers were ALI (+3.69 percent), Bloomberry (+3.68 percent) and AGI (+3.34 percent).  Investors also snapped up shares of MPI, Metrobank, AP, JFC, Megaworld, URC and ICTSI.

On the other hand, the day’s gains were tempered by the decline of Semirara, Meralco, BDO, DMCI and MWC.

The Holy Week is usually a time for the local stock market to hunt for bargains.  Aside from that, month- and quarter-end window-dressing activities were aiding the market.

At the same time, trading was upbeat across the region as Cyprus struck a $13-billion international bailout deal that averted a financial meltdown.

The Stock Exchange of Thailand main index went up 44.98 points, or 3.04%, to close at 1,523.95 points at the end of trading session this afternoon. The trade value was 58.34 billion baht, with 14.99 billion shares traded.

The SET50 index ended at 1,002.43 points, up 25.39 points, or 2.60%, with a total trade value of 29.56 billion baht.

The SET100 index rose 62.73 points, or 2.87%, to stand at 2,247.12 points, with a total turnover of 40.25 billion baht.

The SETHD index gained  29.77 points, or 2.46%, to stand at 1,240.91 points, with total trade value of 11.79 billion baht.

The MAI index went up 22.33 points, or 5.12%, to close at 458.75 points, with total transaction value of 1.85 billion baht.

Top five most active values were as follows;

PTT        stood at              327 baht, up 7.00 baht (2.190%)

BTS        stood at              9.05 baht, up 0.25 baht (2.84%)

KTB        stood at              25.00 baht, up 0.30 baht (1.21%)

NWR        stood at              5.10 baht, up 0.56 baht (12.33%)

TRUE       stood at              7.85 baht, up 0.45 baht (6.08%)

FBM KLCI was up 17 points or 1.04% to 1,643.89, the highest since March 14. Turnover was 708.60 million shares valued at RM1.46bil. There were 304 gainers, 309 losers and 312 stocks unchanged.

Banks were among the top performers, with CIMB up 13 sen to RM7.29 and adding 2.23 points to the KLCI, Maybank gained nine sen to RM9.23 and Public Bank eight sen to RM16.02 while Hong Leong Bank rose four sen to RM14.42 and AMMB two sen to RM6.40.

Among the telcos, Axiata added nine sen to RM6.45 and DiGi 11 sen to RM4.53. UMW advanced 26 sen to RM13.08 and Genting Bhd 17 sen to RM9.63.

Crude palm oil for third-month futures fell RM16 to RM2,477. PPB Group rose 32 sen to RM12.52, TAHPS and TDM 20 sen each to RM5.20 and RM3.72 while heavyweight IOI Corp six sen to RM4.66.

Tokyo climbed 1.69 percent, or 207.93 points, to end at 12,546.46 and Seoul climbed 1.49 percent, or 28.96 points, to 1,977.67, while Sydney added 0.46 percent, or 22.9 points, to 4,990.2.

In the afternoon Hong Kong added 0.96 percent and Shanghai was up 0.29 percent.

Shayne Heffernan Ph.D.
Economist/Hedge Fund Manager

Live Trading News
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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

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.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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