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ASEAN STOCK WATCH Asean Affairs   23 May 2012

ASEAN Market Outlook

 By Shayne Heffernan Ph.D.

Stocks reversed gains after Dow Jones reported that former Greek Prime Minister Lucas Papademos said the nation is considering preparations to leave the shared currency. European Union leaders are preparing to gather in Brussels tomorrow to discuss how to revive growth. Concern about Europe’s debt crisis drove the S&P 500 down as much as 8.7 percent from an almost four-year high in April.

ASEAN will follow that lead and trade a little lower today.

Malaysia Buy Genting

Genting Berhad (“Genting”) has been upgraded by Heffernan Capital Management to a Must Own ASEAN Equity, Economist Shayne heffernan has set a 2013 price target of 25MYR up 5 MYR from the previous target. In a note to traders today Shayne Heffernan said, “ASEAN 2015 will change Asia forever, and one of the big winners is going to be Genting Group.”

Genting is currently listed on the Main Market of the Bursa Malaysia Securities Berhad. (Bloomberg: GENT MK; Reuters: GENT KL; Bursa Malaysia: GENTING 3182) Genting is one of the largest listed companies in Malaysia with a market capitalisation of about RM39.4 billion (US$13.2 billion) as at 29 February 2012. The authorised share capital of Genting was RM800 million (comprising 8 billion shares of RM0.10 each) and the issued and paid-up share capital of Genting was RM370.4 million (comprising 3,704 million shares of RM0.10 each) as at 29 February 2012.

The Genting Group is the collective name for Genting and its subsidiaries, and comprises four listed subsidiaries, namely Genting Berhad, Genting Malaysia Berhad, Genting Plantations Berhad (all three listed on Bursa Securities) and Genting Singapore PLC (listed on the Singapore Exchange).

Genting Berhad is the investment holding and management company of Genting Group. Genting Group was founded by the late Tan Sri (Dr.) Lim Goh Tong in 1965 when he began the initial development works of building a 20-kilometre private access road, across tough mountainous terrains from the foothills to the summit of Mount Ulu Kali, located at 2,000 metres above sea level.

Thailand PTTEP is a Must Own

PTT Exploration and Production Plc reported its first-quarter profit surged 64% thanks to sales increases and higher oil prices.

President and chief executive Anon Sirisaengtaksin said the company's consolidated net profit rose 64% to US$589 million (18.28 billion baht) compared with $359 million (10.97 billion baht) in the same quarter last year.

Total revenue rose 24% to $1.62 billion (50.44 billion baht) from $1.31 billion (40.01 billion baht). Sales gains were mainly due to increased oil prices, which averaged $64.79 per barrel of oil equivalent (boe) compared with $49.36 in the same quarter last year.

But sales volume decreased to 253,411 barrels of oil equivalent per day (boed) compared with 271,292 boed a year ago because of the termination of the production concession at the Arthit North project in November 2011 and a decrease in the sales volume of natural gas and condensate from that project.

That drop was offset by crude sales volume from the Vietnam 16-1 project, which started production in the third quarter of last year. In the current quarter, the Vietnam 16-1 project is expected to produce 30,854 boed and 20 million standard cubic feet per day (mmscfd) of natural gas.

Crude oil sales from its S1 project increased due to production from new wells and higher beam pump activities. The S1 project covers 1,039 square kilometres in Kamphaeng Phet, Phitsanulok and Sukhothai provinces.

The Bongkot South field in the Gulf of Thailand started test runs in the first quarter and will probably produce 320 mmscfd of natural gas and 9,000 barrels per day of condensate in the second quarter.

The explorer has over 40 oil and gas projects worldwide and said it plans to increase petroleum reserves through acquisitions and expansion of projects in Australia, East Africa, North America and Southeast Asia.

Despite the profit report, shares of PTTEP in the Stock Exchange of Thailand dropped by one baht yesterday to 176.50 in trade worth 929.68 million baht on speculation that PTTEP may consider issuing more shares to fund its bid for the Mozambique-focused explorer Cove Energy.

Shell agreed on Tuesday to acquire Cove for 1.12 billion pounds ($1.8 billion), raising its offer to match PTTEP's. Thailand's top oil and gas explorer said it was considering its options.

Philippines Philex is a Buy

Philex Mining Corporation posted a historic high first quarter revenue of P4.02 billion, 4 percent higher than the P3.86 billion recorded in the same period last year on the strength of gold and copper prices in the global market.

However, the firm disclosed to the Philippine Stock Exchange that lower grade and metal recoveries at the Padcal Mine in Benguet Province kept core net income steady at about P1.33 billion while reported net income was 3 percent lower at P1.27 billion from P1.31 billion last year.

Philex Mining chairman Manuel V. Pangilinan said the Company’s investment in its Silangan Project is necessary for the long-term develop¬ment of the Company.

“This is the time to sow. This is the time to put in significant investments in the Silangan Project – investments for the development of the mine, the capability development of the orga¬nization for its eventual operations, the technology and equipment to conserve the environment as well as investments into the long-term devel¬opment of our host and neighboring communities in Surigao del Norte,” Pangilinan said.

Philex said metal prices continued to be strong in the first quarter of 2012, as revenue from gold increased to P2.18 billion from P2.1 billion last year, while revenue from copper likewise increased to P1.8 billion from P1.65 billion.

Average realized metal prices for the period were at $1,678 per ounce gold and $4.26 per pound copper on 29,153 ounces of gold and 9,085,371 pounds of copper produced.

Last year, average realized metal prices were at $1,315 per ounce gold and $4.13 per pound copper on 37,003 ounces of gold and 9,110,472 pounds of copper produced.

Tonnage milled in Padcal increased 4 percent to 2.36 million tons for the first three months of 2012 from 2.27 million tons in 2011.

But copper concentrate produced was 2 percent lower at 16,478 dry metric tons as ore grades were lower at 0.494 grams gold per ton and 0.219 percent copper this period from 0.613 grams gold per ton and 0.221 percent copper in 2011.

Metal recoveries decreased to 77.91 percent for gold and 79.92 per¬cent for copper, from 82.86 percent and 82.45 percent, respectively.

Income from operations decreased 5 percent as higher production in Pad¬cal and higher corporate overhead in-creased operating costs and expenses to P1.94 billion from P1.65 billion over the same period last year.

For social development and man¬agement programs (SDMP) at the Padcal mine, Philex Mining spent a total of P9.17 million for the host and neighboring communities in the first three months. Of this amount, 75 percent was spent for education, 19 percent for livelihood and public infrastructure and 6 percent for health programs.

Environmental protection pro¬grams during the first quarter totaled P50.58 million or 19 percent of the P261.21 million allotted for 2012 for its nursery operations, plantation opera¬tion and protection, and construction of fireline/firebreak, as well as main¬tenance and operations of the active and decommissioned tailings ponds.

Tokyo gained 1.10 percent, or 95.40 points, to end at 8,729.29, Seoul rose 1.64 percent, or 29.56 points, to 1,828.69 and Sydney climbed 1.16 percent, or 47.4 points, to 4,121.0.

Hong Kong climbed 0.62 percent, or 116.83 points, to 19,039.15 and Shanghai added 1.07 percent, or 25.01 points, to 2,373.31.

– Singapore closed up 1.20 percent, or 33.59 points, at 2,823.75.

Palm oil producer Wilmar International gained 4.21 percent to Sg$3.96 while United Overseas Bank was up 2.24 percent at Sg$17.80.

– Taipei rose 1.15 percent, or 82.66 points, to 7,274.89.

Leading smartphone maker HTC surged 6.02 percent at Tw$431.5 while Hon Hai Precision added 4.81 percent at Tw$87.2.

– Manila closed flat, edging up 4.43 points to 4,958.43.

Philippine Long Distance Telephone Co. eased 0.08 percent to 2,392 pesos and Philex Mining shed 0.60 percent to 24.85 pesos.

– Wellington gained 1.04 percent, or 36.47 points, to 3,529.86.

Telecom was up 3.5 percent at NZ$2.64 and Fletcher Building advanced 1.8 percent to NZ$6.38 while Contact Energy added 0.41 percent to NZ$4.86.

– Kuala Lumpur added 0.52 percent, or 7.93 points, to 1,546.84.

British American Tobacco climbed 2.7 percent to 52.80 ringgit and KLCC Property Holdings gained 3.1 percent to 3.30 ringgit.

Telekom Malaysia shed 0.6 percent to 5.25 ringgit.

– Bangkok slipped 0.32 percent, or 2.64 points, to 1,131.52.

Coal producer Banpu fell 4.55 percent to 462 baht, while Siam Cement added 0.92 percent to 330 baht.

– Jakarta climbed 2.06 percent, or 80.99 points, to 4,021.10.

Nickel miner Aneka Tambang rose 1.4 percent to 1,480 rupiah, cement maker Semen Gresik added 1.4 percent to 11,050 rupiah and cigarette maker Gudang Garam jumped 4.4 percent to 59,900 rupiah.

– Mumbai fell 0.97 percent, or 156.85 points, to 16,026.41.

India’s largest passenger car maker Maruti Suzuki slipped 4.5 percent to 1,145 rupees while private Tata Power slid 5.29 percent to 90.45 rupees.

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.

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