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||Asean Affairs 15 May 2012
ASEAN markets will open lower
By Shayne Heffernan Ph.D.
ASEAN markets will open lower after yesterdays session in New York, but may rally in the afternoon session.
Stocks slid on Monday as investors dealt with the one-two punch of worsening political upheaval in the euro zone and the possibility that China's economy may be softening more than previously thought.
European finance ministers grappled with the costs of keeping Greece in the euro area or letting it go, as Greece’s post-election political feud dragged on with little progress toward forming a government.
German Finance Minister Wolfgang Schaeuble said Europe has done the “utmost” to prop up the financially stricken country, limiting any further room for leniency after about 240 billion euros ($308 billion) of aid pledges.
The MSCI All-Country World Index (MXWD) slid 1.6 percent at 4 p.m. in New York and the Standard & Poor’s 500 Index sank 1.1 percent to 1,338.35, with both slipping to the lowest levels in more than three months. The euro slid to less than $1.29 for the first time since January. Yields on U.S. seven-year debt and 10- year U.K. and German bonds fell to records, while costs to insure against a Spanish default jumped to an all-time high. The S&P GSCI gauge of commodities dropped 1.1 percent.
Chinese stocks closed lower in a mixed Asian session Monday, reversing early gains after Beijing's latest easing move, while European equities sank out of the gate amid fresh fears over the region's debt crisis.
Hong Kong's Hang Seng Index slumped one percent after late-day losses, while the mainland Shanghai Composite shed 0.6 percent, as Chinese investors failed to cheer fresh stimulus measures from the central bank. The People's Bank of China on Saturday introduced more monetary easing by cutting banks' reserve requirement ratios, in a bid to offset signs of weaker growth.
Hong Kong shares have fallen 1.15 per cent as China's decision to cut the amount of cash banks must keep in reserve was overshadowed by fears over political uncertainty in Greece.
The Hang Seng Index fell 229.59 points to 19,735.04 on turnover of HK$51.81 billion ($A6.71 billion).
Financial firms were among the worst hit. ICBC fell two per cent to HK$4.79 while China Construction Bank finished 2.2 per cent lower at HK$5.47.
Insurers also performed badly, with both China Life and Ping An losing two per cent to end at HK$19.38 and HK$59.00 respectively.
Chinese shares closed down 0.60 per cent. The benchmark Shanghai Composite Index, which covers both A and B shares, ended down 14.26 points at 2,380.73 on turnover of 89.4 billion yuan ($A14.13 billion).
Food and beverage stocks led the declines, with Chinese distilled liquor maker Kweichow Moutai ending 2.42 per cent lower at 222.18 yuan while Bright Dairy closed down 1.73 per cent at 9.67 yuan.
Resources stocks also dropped on profit-taking. Jiangxi Copper lost 2.30 per cent to 25.54 yuan, while Yanzhou Coal Mining was down 1.67 per cent to 23.60 yuan.
Shenyin Wanguo Securities analyst Qian Qimin said the move by China's central bank had had little impact on market sentiment.
The STI closed 0.7%, or 19.28 points lower at 2,864.12, its lowest close since Jan. 20 after climbing as high as 2,898.85, or 0.5%, during the day.
News that China had lowered its reserve ratio requirement--or the amount of money that the country's banks must set aside--had helped local shares open on a positive footing, but the rebound from last week's 3.6% fall for the STI was never strong.
Neptune Orient Lines was the day's worst performing blue-chip, ending down 5.4% at S$1.045, adding to its 12.3% tumble last week. The container shipper's stock has come under increased selling pressure since worries flared last week over political uncertainty in Europe and after the company posted a wider-than-expected first quarter loss of US$253.6 million on Wednesday.
Tokyo closed 0.23 percent, or 20.53 points, higher at 8,973.84 while Sydney added 0.28 percent, or 11.9 points, to 4,297.0.
Seoul closed 0.18 percent lower, easing 3.40 points to 1,913.73.
Hong Kong ended 1.15 percent, or 229.59 points, lower at 19,735.04 and Shanghai fell 0.60 percent, or 14.26 points, to 2,380.73.
– Taipei fell 0.33 percent, or 24.19 points, to 7,377.18. Leading smartphone maker HTC lost 1.16 percent at Tw$425.0.
– Manila fell 1.44 percent, or 74.52 points, to 5,083.62.
Metropolitan Bank and Trust Co. fell 2.29 percent to 85 pesos while SM Investments slipped 3.59 percent to 680 pesos. Universal Robina fell 0.81 percent to 67.20 pesos.
– Wellington closed 0.21 percent, or 7.29 points, to 3,555.36.
Contact Energy added 0.42 percent to NZ$4.82, Telecom climbed 1.35 percent to NZ$2.63 and Fletcher Building added 2.29 percent to NZ$6.26.
– Singapore closed down 0.67 percent, or 19.28 points, to 2,864.12.
Real estate developer Capitaland shed 2.93 percent to Sg$2.65 while oil rig maker Keppel Corp. was down 1.47 percent at Sg$10.09.
– Kuala Lumpur shares ended 0.58 percent lower, or 9.24 points, at 1,575.08.
YTL Power International lost 4.8 percent to 1.58 ringgit, British American Tobacco eased 3.0 percent to 51.80 and MMC Corp shed 2.9 percent to 2.65.
– Jakarta shares ended down 1.48 percent, or 61.07 points, at 4,053.06.
Hero Supermarket slid 8.86 percent to 3,600 rupiah, cement maker Gresik lost 3.1 percent at 10,950 rupiah, and Telkom fell 2.4 percent at 8,000 rupiah.
– Bangkok fell 2.14 percent, or 25.50 points, to 1,165.51.
PTT lost 1.79 percent to 330 baht, while Banpu dropped 1.53 percent to 516 baht.
– Mumbai was down 77.14 points, or 0.47 percent, to a near four-month-low of 16,215.84 and its fifth straight day of losses.
India’s top property firm DLF fell 2.64 percent to 182.35 rupees while vehicle maker Tata Motors fell 2.42 percent to 290.2.
Shayne Heffernan Ph.D.
Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
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