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ASEAN STOCK WATCH Asean Affairs   22 May 2012

ASEAN Market Outlook

 By Shayne Heffernan Ph.D.

Major U.S. indexes climbed Monday after falling every day last week. Investors latched on to weekend statements from China's Premier Wen Jiabao, who promised to boost the country's consumption rather than focusing primarily on curbing inflation.

China's premier called for additional efforts to support growth on Sunday, signaling Beijing's willingness to take action after a recent series of economic indicators suggested that the world's second-biggest economy will slow further in the second quarter.

Monday was the Dow's first gain after six straight days of losses, and only its third up day for May. Last week was the worst for the Dow since November. The month has wiped out nearly three-quarters of the Dow's gains from January through March.


Indonesia

The government is targeting that 25 percent of the government’s earmarked capital expenditure be spent by the second quarter of the year, Deputy Finance Minister Anny Ratnawati said on Monday.

Anny said that so far this year only 10 percent of the capital expenditure had been disbursed and added that the 25 percent absorption level was estimated for the end of the second quarter. She said that the government estimated that the remaining 75 percent would be able to be absorbed in the two last quarters of the year.

The revised 2012 budget earmarked capital expenditure at Rp 168 trillion ($17.9 billion) while state expenditure was set at Rp. 1,548.3 trillion.

On the downside The Finance Ministry has expanded the list of minerals that can be taxed from 14 to 65%, prompting one mining association to express concern that the levy will cripple local operators, especially small ones.

“The government needs to consider how our mining commodities fare in the global market right now,” Poltak Sitanggang, the chairman of the Indonesian Mineral Entrepreneurs Association (Apemindo), said on Friday.

The additional minerals that will be taxed at 20 percent include titanium quartz, jade and marble, “because all of them have the same raw shape as ore,” Finance Minister Agus Martowardojo said on Wednesday.

He did not say when the new regulation would be implemented.

The latest decision supplements the May 6 plan to levy a 20 percent tax on miners of 14 unprocessed minerals, which include copper and gold, in a bid to get them to meet a domestic processing requirement by 2014. Miners cannot export if they do not have a plan to process their minerals domestically or do not have an exemption from the Energy and Mineral Resources Ministry within two years.

Thailand

The National Economic and Social Development Board (NESDB) maintained its full-year GDP projection of 5.5-6.5%.

Growth in the first quarter was driven by a recovery in manufacturing, domestic consumption, investment and tourism. After seasonal adjustments, the Thai economy grew by 11% compared to the previous quarter, rebounding sharply from the fallout of last year's devastating floods.

Household consumption picked up due to increased expenditures for post-flood restoration and government policies such as the first-time car buyer programme.

Arkhom Termpittayapaisith, NESDB's secretary-general, said the agency projected more promising export and economic growth numbers in the second quarter because of the recovery in automotive and parts manufacturing, and electronics and electrical appliances, which were the industries hardest hit by the floods.

Several major industries should return to full capacity in the second quarter. However, some industries may face delays such as semiconductors, while electrical appliances and electronics, which account for 23.9% of manufacturing, are rebounding more slowly.

He said the agency projected 12.3% growth in investment in 2012, down from 14.2% previously. New private investment missed estimates at 13% growth and public investment 10%, down from 14.5% and 13%, respectively.

The investment projection is based on the disbursement of a 120-billion-baht budget for post-flood rehabilitation and short-term flood prevention.

The National Economic and Social Development Board (NESDB) maintained its full-year GDP projection of 5.5-6.5%.

Growth in the first quarter was driven by a recovery in manufacturing, domestic consumption, investment and tourism. After seasonal adjustments, the Thai economy grew by 11% compared to the previous quarter, rebounding sharply from the fallout of last year's devastating floods.

Household consumption picked up due to increased expenditures for post-flood restoration and government policies such as the first-time car buyer programme.

Arkhom Termpittayapaisith, NESDB's secretary-general, said the agency projected more promising export and economic growth numbers in the second quarter because of the recovery in automotive and parts manufacturing, and electronics and electrical appliances, which were the industries hardest hit by the floods.

Several major industries should return to full capacity in the second quarter. However, some industries may face delays such as semiconductors, while electrical appliances and electronics, which account for 23.9% of manufacturing, are rebounding more slowly.

He said the agency projected 12.3% growth in investment in 2012, down from 14.2% previously. New private investment missed estimates at 13% growth and public investment 10%, down from 14.5% and 13%, respectively.

The investment projection is based on the disbursement of a 120-billion-baht budget for post-flood rehabilitation and short-term flood prevention.


Singapore

Formula One will start pre-marketing for its up to $3 billion Singapore initial public offering on May 22 after receiving approval from the stock exchange for the deal.

Formula One will raise $2.5 billion to $3 billion.

Formula One, which holds 20 races around the world and has a more than 500 million television viewers, is controlled by private equity firm CVC Capital Partners, with a 63.4 percent stake. CVC plans to reduce its stake as part of the IPO along with other shareholders in Formula One, the source added.

Formula One earlier this month unveiled a $1.8 billion refinancing package to help lay the groundwork for the IPO. Goldman Sachs and UBS were hired to lead the IPO. Morgan Stanley , Spains Banco Santander , Singapores DBS Group and Malaysias CIMB will also act as joint bookrunners on the deal.

 
For the past three years, the government has taken steps to cool the overheated property market, most recently boosting stamp duty on foreign buyers as the land-strapped island nation fights to fend off investment demand.

Private-home prices eased a modest 0.1% during the first-quarter — but marked the first fall since 2009 — according to the Urban Redevelopment Authority. Sub-sales transactions, an indicator of speculative activity, have fallen significantly.

Efforts to stabilize the market are working, the government says, though demand for housing remains stubbornly high. Strong liquidity and low interest rates helped sales near three-year high in April, setting the stage for more policy intervention.

Malaysia

The FBM KLCI index gained 6.45 points or 0.42% on Monday. The Finance Index fell 0.13% to 13712.14 points, the Properties Index up 0.00% to 965.64 points and the Plantation Index rose 0.66% to 8158.29 points. The market traded within a range of 8.34 points between an intra-day high of 1540.29 and a low of 1531.95 during the session.

Actively traded stocks include SMI, SKPETRO, AGLOBAL, ASIAEP, JCY, ASUPREM, NICORP, ASIAEP-WB, YTL and CIMB. Trading volume decreased to 780.03 mil shares worth RM1078.77 mil as compared to Friday’s 1061.26 mil shares worth RM1501.11 mil.

Leading Movers were SIME (+16 sen to RM9.40), TENAGA (+7 sen to RM6.40), AXIATA (+4 sen to RM5.36), YTLPOWR (+7 sen to RM1.61) and YTL (+4 sen to RM1.73). Lagging Movers were MAYBANK (-2 sen to RM8.44), BAT (-60 sen to RM51.40), HLBANK (-8 sen to RM12.02), GENM (-2 sen to RM3.55) and KLK (-6 sen to RM22.04). Market breadth was positive with 385 gainers as compared to 306 losers.

Philippines

The main-share Philippine Stock Exchange recouped 74.58 points, or 1.53 percent, to finish at 4,954. The local markets thus firmed up after a bloodbath that caused a 5.4 percent pullback last week but overall sentiment was still cautious for the near term.

All counters surged on Monday but the cyclical stocks like banking and property benefited the most, respectively rising by 2.28 percent and 2.42 percent, on improved prospects for growth in emerging Asia. The mining/oil index was likewise up by 2.1 percent as China’s stance also boosted commodity markets.

Value turnover for the day amounted to P6 billion. There were 103 advancers that overwhelmed 42 decliners while 40 stocks were unchanged.

The main index was led higher by PLDT, ALI, Metrobank, SM, BDO, Megaworld, Metro Pacific Investments, BPI, Meralco, AGI and Aboitiz Power.

Investors also picked up shares of non-PSEi stocks like GT Cap, Philex Petroleum, Security Bank and Eastwest Bank. VMC, which resumed trading after a 15-year suspension, zoomed 931 percent higher to close at P2.99 per share.

On the other hand, DMCI, URC, SM Prime and Ayala Corp. bucked the day’s up


Tokyo gained 0.26 percent, or 22.58 points, to end at 8,633.89, Sydney rose 0.67 percent, or 27.1 points, to 4,073.6 and Seoul closed 0.94 percent higher, adding 16.67 points to 1,799.13.

Shanghai added 0.16 percent, or 3.78 points, to 2,348.30 but Hong Kong slipped 0.16 percent, or 29.53 points, to 18,922.32.

– Singapore closed up 0.40 percent, or 11.06 points, at 2,790.16.

Oversea-Chinese Banking gained 0.71 percent to Sg$8.48 while Singapore Airlines was down 0.58 percent at Sg$10.30.

– Taipei added 0.57 percent, or 41.04 points, to end at 7,192.23.

Taiwan Semiconductor Manufacturing was 0.86 percent higher at Tw$82.5 while leading smartphone maker HTC added 1.62 percent at Tw$407.0.

– Manila closed 1.53 percent, or 74.58 points, up at 4,954.00.

DMCI Holdings fell 1.72 percent to 57 pesos, while Universal Robina dropped 0.24 percent to 61.10 pesos. But Philippine Long Distance Telephone rose 1.01 percent to 2,394 pesos.

– Wellington eased 0.23 percent, or 8.05 points, to 3,493.39.

Fletcher Building was off 0.32 percent at NZ$6.27 and Air New Zealand fell 0.54 percent to NZ$0.915.

– Jakarta slipped 1.01 percent, or 40.39 points, to 3,940.11.

Car maker Astra International fell 2.3 percent to 66,850 rupiah, Bank Mandiri was down 2.1 percent at 6,950 rupiah, and instant noodles maker Indofood Sukses Makmur closed 2.1 percent lower at 4,725 rupiah.

– Kuala Lumpur rose 0.42 percent, or 6.45 points, to 1,538.91.

YTL Power added 4.6 percent to 1.61 ringgit, Sime Darby rose 1.7 percent to 9.40 ringgit and PPB Group gained 1.7 percent to 15.60 ringgit.

British American Tobacco shed 1.2 percent to 51.40 ringgit and Hong Leong Bank lost 0.7 percent to 12.02 ringgit.

– Bangkok closed 1.67 percent lower, giving up 19.28 points to 1,135.16.

Banpu fell 2.81 percent to 484 baht, while PTT dropped 1.83 percent to 322 baht.

– Mumbai closed 0.19 percent, or 30.51 points, higher at 16,183.26.

Shayne Heffernan Ph.D.  

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ASEAN  ANALYSIS

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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