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ASEAN STOCK WATCH Asean Affairs 27 March 2013  

ASEAN Market Preview


Thailand’s PTT Group will likely see earnings improve in the first quarter of 2013 on the back of high oil prices, but its full-year results may be hit by narrower refining margins because of continued weakness in demand, analysts said on Wednesday.

The state-owned integrated oil, gas and petrochemicals firm late last week reported a Thai baht (Bt) 22.7bn ($762m) net profit in the three months to December 2012, representing a 29% year-on-year jump, but a 37% decline from the previous quarter. In the first three months of 2012, PTT’s net profit stood at Bt37.4bn.

For the whole of 2012, PTT’s net profit slipped by 1.5% to Bt104.7bn, while sales and service revenues fell by 15% at Bt2,794bn.


Malaysia's blue chips closed higher on Tuesday, the second day of firm gains on fund buying of key stocks including Genting Bhd, CIMB and UMW while key regional markets were mixed.

At 5pm, the KLCI was up 8.94 points or 0.54% to 1,652.83. Turnover was 822.26 million shares valued at RM1.94bil. There were 380 gainers, 286 losers and 322 counters unchanged.

Earlier the KLCI rose to a high of 1,660 before some profit taking trimmed the gains. But the broader market remained firm, with buying support spreading to smaller capitalised stocks.

enting Bhd rose 27 sen to RM9.90 and pushed the KLCI up 2.15 points. UMW added 42 sen to RM13.50 and gave the index a 1.0 point boost.

Banks rose in active trade, with CIMB adding seven sen to RM7.36 and adding 1.2 points to the KLCI. Maybank rose six sen to RM9.29 and Pubic Bank eight sen to RM16.10.

DiGi rose six sen to RM4.59, Axiata four sen to RM6.49 and TM seven sen to RM5.37.

BAT fell the most, down 54 sen to RM61.46. HL Industries lost 24 sen to RM4.10 and Tasel 10 sen to RM15.50.

Crude palm oil for third-month futures fell RM24 to RM2,438. TAHPS fell 20 sen to RM5, Genting Plantations 10 sen to RM8.41 and PPB Group six sen to RM12.46.

The ringgit continued to advance against the US dollar, strengthening to 3.0936, which was the strongest since March 1. The overnight close was 3.0989.


Kohlberg Kravis Roberts and Co. LP (KKR) is joining hands with Singapore’s sovereign wealth fund to set up a non-banking financial company (NBFC) that would lend funds to property developers in India as other sources of cash dry up.

To begin with, the NBFC, for which the regulatory approvals are currently under way, will have a corpus of $150 million (around INR 810 crore).

This would be the first real estate-focused NBFC in India. Government of Singapore Investment Corp. (GIC) could be one of the anchor investors in the NBFC, while KKR is putting capital from its balance sheet into it.


As Indonesia’s stock market rises to record levels, more conglomerates are being encouraged to go public this year and raise funds to help with their expansion plans.

The benchmark stock measure, the Jakarta Composite Index, ended up 0.5 percent at 4,874.50 on Friday. The JCI so far this year has gained 13 percent, matching all of the advance for 2012.

“This year, we can go beyond the last record [set on Friday]. As a matter of fact, we can go beyond 5,000 points,” said Pardomuan Sihombing, a director at Recapital Asset Management in a capital market discussion in Garut, West Java, on Saturday.

He spoke at an event organized by the Indonesian Stock Analysts Association (AAEI).

Recapital is predicting that the JCI could rise further to around 5,000 to 5,300 this year, on the back of strong consumer purchasing power and low interest-rate environment, he added. That suggests a gain of as much as 8.7 percent from Friday’s close.

Hoesen, listing director on the Indonesia Stock Exchange (IDX), said on Friday that the exchange is expecting to see Mitra Pinashtika Mustika undertake an initial public offering by the end of the first half.

MPM is controlled by Saratoga Capital, an investment holding company established by Edwin Soeryadjaya and Sandiaga Uno, who is a founder of the company that controls Recapital Asset Management. Edwin, 63, is a son of William Soeryadjaya, the founder of Astra International, Indonesia’s second-biggest publicly traded company with interests ranging from automotive distribution to palm oil plantation.

MPM is the sole distributor of Honda motorbikes for East Java and East Nusa Tenggara. The company also produces motorbike lubricants, serve as automotive dealership and financier.

Another company that is expected to go public is Dharma Satya Nusantara, a company owned by Theodore Permadi Rachmat, 69, a former long-time president director of Astra. DSN is involved in palm oil plantation, industrial forest and logging.

Austindo Nusantara Jaya is involved in palm oil plantations, tobacco, renewable energy and health care. The company is controlled by brothers George Santosa Tahija and Sjakon George Tahija.

Hoesen said MPM, DSN and ANJ have conducted public exposes at the IDX office.

“They used the financial report as of December 2012. That means they will have to list the shares, at the latest, by the end of the first half of this year,” he said.

Hoesen said MPM has appointed Indo Premier Securities as its lead underwriter for the share sale.

Meanwhile, DSN appointed Ciptadana Securities, BCA Securities, Morgan Stanley and Credit Suisse as underwriters and ANJ appointed Bahana Securities and Morgan Stanley.

Hoesen said the three companies plan to undertake a global offering as well. He wouldn’t disclose the percentage of the offerings or amounts that would be raised from the first-time public share sales.

Investor Daily sources say ANJ is planning to sell 20 percent of its equity, with a target to raise $150 million, while DSN is aiming to sell 15 percent to 20 percent of the company’s shares and aim for $200 million in proceeds.

No information of MPM’s proceed target and percentage of shares to be sold was available.

The IDX has said that 15 companies will go public this year, or half of the targeted IPOs. Since the start of the year there have been six newly listed companies.

Shares of some companies that started trading this year have performed better than the JCI, suggesting bullish views among investors.

Sarana Meditama Metropolitan, a hospital operator, jumped 14 percent in its first day of trading on Jan. 11. The stock closed at 1,520 a share on Friday, an almost fourfold increase from its offering of Rp 400.

Palm plantation company Multi Agro Gemilang Plantations has gained 14 percent to Rp 125 since its stock was priced at 110 in January.

Other companies that plan to undertake an IPO include Siba Surya, which is involved in trucking and cargo transportation; Citra Borneo Indah, a palm oil plantation; and Cipaganti Citra Graha, a car rental and travel services company with property interests.

Separately, Lucky Budi Purnomo, the head of brokerage Remax Capital, said the target to see 30 new listed companies is “too easy” for the IDX, because Indonesia’s macroeconomic outlook is “promising.”

“Indonesia is an emerging nation, which foreign investors are eyeing. A target to see 45 new listed companies is a real target. The IDX should be able to encourage companies with good prospects,” he said.

Indonesia’s stock market by value in dollar terms has risen 14 percent to $488.2 billion, according to data compiled by Bloomberg. That exceeds Malaysia’s market capitalization of $450.8 billion but is less than Singapore’s $615.7 billion, which is the largest in Southeast Asia.

Still, if market value to economic size is any suggestion, Indonesia’s market is poised to grow. Indonesia’s stock market is 45 percent of gross domestic product, compared to 137 percent for Malaysia and 194 percent for Singapore, Bloomberg data show.

Tokyo lost 0.60 percent, or 74.84 points, to 12,471.62 and Sydney slipped 0.80 percent, or 40.0 points, to 4,950.2, but Seoul climbed 0.30 percent, or 6.03 points, to 1,983.70.

In the afternoon Hong Kong lost 0.44 percent and Shanghai tumbled 1.34 percent, with mainland investors continuing to fret over the strength of the world’s number two economy.


The peso fell back to the 41-to-a-dollar territory on Tuesday to hit its lowest level for the year as the crisis in Cyprus spooked markets anew.

The local currency closed at 41.07 against the US dollar, down by 24 centavos from the previous day’s finish of 40.83:$1.

Intraday high hit 40.84:$1, while intraday low settled at 41.08:$1.

Volume of trade reached $935.76 million from $664.944 million previously.

The depreciation of the peso came amid market concerns that the bitter pill that Cyprus has to swallow to resolve its crisis could cause too much adverse effects on the country’s financial sector, and eventually to the entire euro zone and the global economy.

Cyprus and international creditors have agreed that a bailout package will be made available for the former. However, Cyprus must implement reforms and its own-revenue raising measures for the assistance to be extended. One of these measures is making depositors share the burden of resolving the crisis. In particular, a significant portion of money placed as bank deposits should be surrendered as contribution of the public.

Traders said the impact on depositors and the financial markets of thia revenue-raising measure has created concerns that the same may be implemented in other euro-zone economies facing debt problems.

The market players said uncertainties in the global economy resulting from the events in Cyprus made many investors turn away from emerging-market assets, such as peso-denominated ones, and to the US dollar that has always been considered the safest and liquid currency.

Shayne Heffernan Ph.D.
Economist/Hedge Fund Manager

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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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