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ASEAN STOCK WATCH Asean Affairs   11 May 2012

ASEAN Markets to Rally

By Shayne Heffernan Ph.D.

 Asia will see a rally today after the U.S. joined a global rally and the euro halted an eight-day slump, its longest since 2008. Greece’s Evangelos Venizelos, the socialist Pasok leader and former finance minister, said his goal is to form a government that keeps the nation in the euro area. Investors also watched economic data as initial claims for jobless benefits fell to a one-month low.

Greek political turmoil is in its fourth day after the inconclusive May 6 elections, with coalition talks deadlocked, raising the possibility that another election will have to be held as early as next month. The standoff has reignited European concerns over Greece’s ability to hold to terms of its two bailouts negotiated since May 2010.


Around one third of Chinese companies are planning to grow through acquisitions over the next three years, accounting firm Grant Thornton said in a report on Wednesday.

Although the proportion is a decrease from 45 percent last year due to the economic slowdown, it is still higher than the 26 percent in 2010, according to the latest Grant Thornton International Business Report 2012.

When asked about sources of growth capital in the next three years, nearly half of the businesses (43 percent) chose "don't know", rising steeply from 23 percent last year. The businesses see increasing uncertainties in financing.

Retained earnings and bank finance are still the main financing channels for businesses, down to 42 percent this year from 57 percent in 2011.

The willingness of businesses to undertake an initial public offering is 18 percent, lower than the 24 percent last year but higher than the global average (5 percent).

"Shortage of working capital is always a bottleneck for the development of small and medium enterprises and would be more serious this year with the slowdown of the economy and tightened policies," said Xu Hua, the chief managing partner and chief executive officer of Grant Thornton in China.

The pressure would be relieved, though, because government has put forward a series of supporting policies for the financing of small and medium enterprises. The businesses themselves should manage their credit well and learn more about specialized financing knowledge to actively broaden their financing channels, he added.

The report also reveals that 92 percent of acquisition-minded businesses in China's mainland expect to expand through domestic acquisitions, reflecting the fact that the majority of businesses are still focusing on the domestic market. 26 percent of businesses on China's mainland are planning cross-border acquisitions, in line with the proportion of last year. This remains the highest level since 2008, demonstrating a stable overseas interest in investing in China.

"Given the 'bottom-fish' opportunities brought by the sluggish European economy, more China businesses should be encouraged to 'go out'. And for those businesses having built up strengths under relatively stabilized domestic economic conditions, cross-border acquisitions could lead to market expansion and bring in new technologies and help businesses achieve further growth," Xu said.

The regions that most interested in making an acquisition in the next three years are North America (37 percent) and the BRIC (Brazil, Russia, India and China) economies (35 percent). Despite the fact that only 28 percent of businesses in mainland Europe having acquisition interests, 44 percent of these businesses expect to grow through cross-border transactions, putting it top globally. This reflects the fact that European businesses, lacking confidence within the region, are seeking opportunities in high-growth markets, according to the report.

China's foreign trade rose 2.7 percent year-on-year to $308.08 billion in April, with a surplus of $18.42 billion, the General Administration of Customs (GAC) said Thursday.

The growth rate represents a month-on-month slowdown and surplus has widened from the $53.5 billion logged in March, according the GAC data.

Exports and imports growth in April both saw a pull-back on a monthly basis.

Exports amounted to $163.25 billion in April, up 4.9 percent year-on-year, while imports edged up 0.3 percent to reach $144.83 billion.

For the first four months of the year, the country's total foreign trade rose 6 percent from a year earlier to $1.17 trillion, with exports and imports up 6.9 percent and 5.1 percent to $593.24 billion and $573.94 billion, respectively.

China saw trade surplus of $19.3 billion during the January-April period, the GAC said.

The European Union remained China's largest trading partner in the first four months, but the bilateral trade growth has slowed considerably to just 0.3 percent year-on-year to $170.53 billion.

During the January-April period, China's trade with the United States -- its second-largest trade partner -- increased 9.2 percent year-on-year to $146.1 billion, according to the GAC.

The 10-member Association of Southeast Asian Nations, China's third-largest trade partner, posted a 6.7 percent increase in bilateral trade, amounting to $117.65 billion in the first four months.

Bilateral trade between China and Japan, which is still reeling from last year's devastating tsunami and massive earthquake, dropped 1.5 percent from a year earlier to $107.18 billion.

But China's trade with Russia, which joined the World Trade Organization this year, and Brazil, a major exporter of iron ore and other raw materials, saw robust growth of 27.7 percent and 14.4 percent to $28.69 billion and $25.07 billion, respectively.

In breakdown of imports, China's iron ore imports rose 6.5 percent from a year ago to 240 million tons in the first four months, with an average imported price down 13.4 percent to $137.6 per ton.

Soybean import volumes added 22.3 percent to 18.15 million tons, with its average imported price dipping 7.6 percent year-on-year to $532.9 per ton.

Meanwhile, China imported 392,000 vehicles during the period, up 26.7 percent year-on-year.

Imports of machinery and electronics products shed 1.6 percent to $231.44 billion.


The Stock Exchange of Thailand main index went down 16.60 points or 1.38% to close at 1,190.65 points at the end of trading session on Thursday afternoon. The trade value was 45.79 billion baht, with 7.59 billion shares traded.

The SET50 index ended at 832.43 points, down 12.84 points or 1.52%, with a total trade value of 30.82 billion baht.

The SET100 index fell 27.18 points or 1.48% to stand at 1,809.73 points, with a total turnover of 36.01 billion baht.

The SETHD index went down 18.52 points or 1.65% to stand at 1,106.98 points, with total trade value of 10.77 billion baht.

The MAI index dropped 1.25 points or 0.41% to close at 303.94 points, with total transaction value of 569.69 million baht.

Top five most active values were as follows;

PTT              stood at       335.00 baht, down 10.00 baht (2.90%)
TRUE            stood at          4.10 baht, up 0.32 baht (8.47%)
KBANK         stood at       153.00 baht, down 2.50 baht (1.61%)
CPF (XD)      stood at        40.00 baht, down 0.75 baht (1.84%)
BBL              stood at       181.00 baht, down 4.00 baht (2.16%)


Genting Singapore Plc (GENS) : The theme park and casino operator reported first-quarter net income dropped 33 percent from a year ago to S$205.5 million. The shares slipped 1.2 percent to S$1.67.

Singapore Exchange Ltd. (SGX) : Chi-East Pte Ltd., the dark-pool stock operator jointly owned by the Singapore bourse and Chi-X Global Inc., is closing down after trading volumes failed to meet its expectations. Singapore Exchange added 0.2 percent to S$6.51.

City Developments Ltd. (CIT) : Singapore’s second-biggest homebuilder said first-quarter net income tumbled 44 percent from a year earlier to S$156.8 million ($125 million). The stock added 0.4 percent to S$10.22.

Noble Group Ltd. (NOBL SP), Asia’s biggest listed commodities trader, said first-quarter net income fell 46 percent from a year earlier to $110 million, missing the $161 million average of three analyst estimates compiled by Bloomberg.

Hong Kong

Swire Properties (1972) expects office rents to rise in the second half of the year as the commercial property market has been picking up since January.

"If we look at the rental contracts that we fixed in the past three months, it looks certain that we can achieve our goals," chief executive Martin Cubbon said.

Rentals are moving up in core business areas, Cubbon said, and those in non-core sectors are seeing stronger growth.

The office market has picked up in both rental and sale transactions after a quiet 2011.

This week, for instance, 50 Connaught Road was sold en bloc for HK$4.88 billion - the biggest property transaction this year - to the Agricultural Bank of China (1288).

Emperor Watch and Jewellery (0887) said it is upbeat about the consumer market in Hong Kong, following encouraging first-quarter sales.

The local firm, which sells high-end timepieces and jewelry through 80 boutiques in Greater China, booked same-store sales growth of 15 percent in the first three months, chairperson Cindy Yeung Lok-si said yesterday after the company's annual general meeting.

"We are confident about maintaining 15 percent same-store growth through the whole year in Hong Kong and Macau," she said. "The second half will be better than the first."

With 18 stores operating in busy tourist areas of the city, the 70-year-old chain benefits from mainlanders' strong purchasing power.

China Overseas Land & Investment Ltd. (688) (688 HK): The mainland’s biggest developer by market value said its property sales for April rose 45 percent from a year earlier. The stock fell 0.1 percent to HK$16.

China State Construction International Holdings Ltd. (3311) (3311 HK): The provider of building construction said new contract value for the first four months of 2012 rose 7.1 percent from a year earlier. The stock slid 1.3 percent to HK$6.75.

Tokyo fell 0.39 percent, or 35.41 points, to 9,009.65 and Seoul slipped 0.27 percent, or 5.36 points, to 1,944.93 while Sydney gained 0.48 percent, or 20.5 points, to 4,295.6.

Hong Kong fell 0.51 percent, or 103.36 points, to 20,227.28 and Shanghai was flat, edging up 1.64 points to 2,410.23.

– Singapore ended flat, edging up 2.69 points to 2,903.60.

Fraser and Neave gained 2.79 percent to 6.99 and Singapore Telecom advanced 1.58 percent to 3.21.

– Wellington closed up 0.27 percent, or 9.58 points, at 3,569.05.

Telecom rose 0.75 percent to NZ$2.67 while Chorus gained 1.59 percent to NZ$3.20.

– Manila fell 0.44 percent, or 22.69 points, to 5,192.10.

Alliance Global Group shed 5.55 percent to 12.94 pesos while Bloomberry Resorts fell 4.21 percent to 9.10 pesos.

– Taipei added 0.11 percent, or 8.30 points, to 7,484.01

TSMC was 0.83 percent higher at Tw$85.3 while Chunghwa Telecom fell 0.89 percent to Tw$89.4.

– Jakarta added 0.11 percent, or 4.57 points, to close at 4,133.63.

– Kuala Lumpur rose 0.20 percent, or 3.16 points, to 1,588.06.

Budget carrier AirAsia gained 0.5 percent to 3.78 ringgit, while plantation giant Sime Darby added 0.3 percent to 9.80 ringgit. Transport company MMC lost 1.1 percent to 2.71 ringgit.

– Bangkok fell 1.38 percent, or 16.60 points, to 1,190.65.

– Mumbai fell 0.36 percent, or 59.53 points, to 16,420.05.

Shayne Heffernan Ph.D.  

Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
3 Raffles Place #07-01
Bharat Building Singapore 048617
Tel: +65 6329 6408 Fax: +65 6329 9699
Email :
Suite 53 Athenee Tower
63 Wireless Road, Lumpini, Pathumwan, Bangkok 10330
New York 347 5th Avenue, Suite 1402-508 NY, NY 10016


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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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