ASEAN KEY DESTINATIONS
Asean Stock Watch-May 25
The Dow Jones Industrial Average fell 25.05 points, or 0.2 percent to close at 12,356.21 overnight.
The S&P 500 fell 1.09 points, or 0.08 percent, to close at 1,316.28, while the Nasdaq fell 12.74 points, or 0.5 pe cent to close at 2,746.16
Crude oil closed at US$99.12 a barrel, while gold settled at US$1,525.10 an ounce.
The Jakarta Composite Index rallied from its biggest drop since January as rising global commodity prices made resource-related stocks more attractive, analysts said.
The JCI rose 7.49 points, or 0.2 percent, to close at 3,785.94. About 7.14 billion shares worth Rp 4.28 trillion ($501 million) changed hands, with gainers outpacing decliners 165 to 67.
Despite profit-taking in consumer and financial stocks, bargain hunting for commodity stocks helped the index rise.
“Sentiment in the market in overall was positive as it recovered from yesterday’s nervousness,” Purbaya Yudhi Sadewa, an economist at the Danareksa Research Institute, told the Jakarta Globe on Tuesday. He said investors would eventually get used to the negative sentiment “unless there is big bankruptcy news.”
Foreign investors were still net sellers, though by less than on Monday. They sold Rp 434.78 billion worth of shares on Tuesday compared with Rp 673.19 billion a day earlier.
“In the last session, investors bought many palm oil-related stocks and lifted the index. Increasing commodity prices make these stocks attractive for investors,” said Ibrahim, an analyst at Harvest International Futures.
Agriculture and mining stocks rose 1.31 percent and 0.6 percent, respectively, despite pressure on blue-chip shares that were seen as too expensive, such as Astra International, which fell 1.9 percent to Rp 58,100.
Among the top gainers were Astra Agro Lestari, a plantation subsidiary of Astra International, which rose 1.86 percent to Rp 23,350, while Perusahaan Perkebunan London Sumatra Indonesia, the nation’s second-largest listed plantation firm, gained 1 percent to Rp 2,375. State miner Tambang Batubara Bukit Asam rose 1.7 percent to Rp 21,250.
The rupiah strengthened 0.2 percent to 8,573 against the US dollar as of the close on Tuesday. “The central bank is using the currency to control inflation. It is comfortable with a level below 8,600 per dollar,” said Lindawati Susanto, head of treasury at Bank Resona Perdania.
Share prices on Bursa Malaysia opened the day on a positive note amid follow-through buying support into selected heavyweights.
Heavyweights such as CIMB Group, Malayan Banking Bhd and Tenaga Nasional Bhd (TNB) registered good gains.
As at 10am, the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) rose 2.71 points or 0.18 percent to 1,535.298. It opened 1.12 points, or 0.07 percent higher at 1,533.24. Losers were ahead of gainers 197 to 166 with 199 unchanged. Some 147.4 million shares were traded, valued at RM238.9mil.
On Bursa Malaysia, Malayan Flour Mills Bhd topped the gainers' list, appreciating 56 sen to RM7. Other gainers included Cycle & Carriage Bintang Bhd, Petronas Dagangan Bhd and Pos Malaysia. TNB rose 2 sen to RM6.51 given the expectations of a possible announcement of electricity tariff hikes by the government later today.
Among banks, CIMB Group added 1 sen to RM8.24 and Public Bank remained unchanged at RM13.04. Maybank added 4 sen to RM8.80.
Leading the list of heavily-traded counters was Jotech Holdings Bhd. The counter remained unchanged 14.5 sen with 7.7 million shares done.
HwangDBS Vickers Research reckoned that the local bourse would probably “move sideways inside a tight trading range” today amid a soft overnight performance on Wall Street.
“Essentially, the benchmark FBM KLCI could be dancing around the 1,530 mark in the absence of fresh developments. Much will also depend on the share price of index heavyweight TNB, given the expectations of a possible announcement of electricity tariff hikes by the government later today,” it said.
HwangDBS said based on TNB's yesterday closing price of RM6.49 as a reference, a 5 percent swing in the stock (which has already risen by 8.5% since last Monday) would translate to a gain or loss of approximately 4-index point.
Other counters that may be in the limelight today include Jerneh Asia, which has proposed a dividend distribution amounting to a gross payout of between RM1.87 and RM2.52 per share and Leader Universal, in response to a news article saying that it is close to getting a US$30mil contract to build a power plant in Laos.
Philippine share prices on Tuesday extended their decline as investors opted to play it safe amid concerns over Europe’s debt crisis.
At the Philippine Stock Exchange, the composite index fell 36.11 points, or 0.85 percent to 4,227.08, while the broader all-shares index lost 20.74 points, or 0.70 percent to 2,960.45. Decliners beat gainers, 110 to 31, while 33 stocks were unchanged. A total of 4.78 billion stocks worth P8.02 billion changed hands, including the special block sale of Manila Electric Company shares.
Minus the block sale, value turnover was only at P3.9 billion.
“Markets were guided mostly by a resurgence of concern over Europe’s debt which dragged stock prices in the US and Europe lower by at least 1.2 percent overnight,” said Jun Calaycay of Accord Capital Equities Corp.
The Dow Jones industrial average closed sharply lower, down 130.78 points, or 1.05 percent to 12,381.26 on European debt fears and slowing Chinese manufacturing figures.
The market may experience a technical bounce Wednesday as local share prices near their respective support levels. Developments in Europe remain as the investors’ primary concern. “With the PSEi near its support of 4,200, share prices are now slightly lower, these downward movements should be taken as opportunities to accumulate fundamentally sound stocks that can deliver in the long run,” said Prince Anthony Yeung of AB Capital Securities Inc.
“There are reasonable expectations of a technical rebound, despite the fact that the drop has extended for four days, with a limited range of 40 points,” Calaycay added.
Meanwhile, Asian currencies, including the peso, have regained strength on Tuesday but gained only a little ground from the battering a day earlier amid fears that the Eurozone debt problems are spreading in peripheral countries.
At the Philippine Dealing System, the local unit gained 3 centavos to a dollar to close at 43.40 from 43.43 the previous trading day.
Analyst said the peso-dollar currency has started on the wrong foot as it quickly depreciated amid continued concerns over finances in Europe and weak commodity prices. They added that investors are now reassessing their growth expectations as tightening in Asia and troubles in Europe may weigh on growth.
“Dollar-peso pair may trade within a narrow range this week as players are reluctant to aggressively sell the dollar after the significant pullback earlier this month. Although a cautious tone can be felt, some risk on trades can be seen,” the Metropolitan Bank and Trust Co. said in a commentary.
It added that the local pair will largely look at its regional peers and euro-dollar pair for direction, and if some relief over the debt woes of the eurozone can be seen this week expect dollar-peso pair to strengthen.
The exchange rate opened at 43.47 and moved to a high of 43.50 to a low of 43.36. Total trading volume eased to $730.93 million from $867.43 million the previous trading day. The currency pair is expected to trade at 43.50 to 43.60 range today.
Singapore shares opened lower on Wednesday, with the benchmark Straits Times Index at 3,109.09 in early trade, down 0.13 percent, or 4 points.
Around 55.5 million shares exchanged hands.
Gainers beat losers 55 to 48.
The Stock Exchange of Thailand main index went up 10.27 points or 0.97 percent to close at 1,064.24 points at the end of trading session on Tuesday afternoon. The trade value was 31.24 billion baht.
The SET50 index ended at 747.90 points, up 8.85 points or 1.20 percent, with a total trade value of 20.32 billion baht.
The SET100 index rose 17.82 points or 1.11 percent to stand at 1,629.04 points, with a total turnover of 23.61 billion baht.
The MAI index went down 0.99 points or 0.34 percent to close at 287.54 points, with total transaction value of 614.21 million baht.
Top five most active values were as follows;
PTT closed at 352.00 baht, unchanged
CPF closed at 31.00 baht, up 1.75 baht (5.98 percent)
IVL closed at 47.50 baht, up 1.00 baht (2.15 percent)
BBL closed at 162.00 baht, up 1.50 baht (0.93 percent)
TTA closed at 22.30 baht, down 0.70 baht (3.04 percent)
The Stock Exchange of Thailand should see a strong rebound in the third quarter once the new government is formed following July 3 elections, says Sopana Janeborvorn, chief investment officer of SCB Asset Management. She said key risks for 2011 included concerns about the European public debt and weakness in the US dollar.
Both of Vietnam's stock markets continued to decline yesterday, with the VN-Index dropping 3.7 percent to close at just 402.59 points. Only 13 codes on the HCM Stock Exchange posted gains, while 243 fell.
The value of trades rose over Monday's session by 11.7 percent, however, reaching VND703 billion (US$33.5 million), with 39 million shares exchanged.
FPT Securities Co analysts said that the dramatic fall of the VN-Index continued to be primarily caused by plunging blue chips and real estate stocks. Of the 10 leading shares by capitalisation, only Sacombank (STB) remained unchanged, while over half bottomed out, including Phu My Fertilisers (DPM), software giant FPT (FPT), finance group Hoang Anh Gia Lai (HAG), food producer Masan Group (MSN), PetroVietnam Finance (PVF) and real estate developer Vincom (VIC).
Saigon Securities Inc (SSI) was also the most-active share with 3.1 million traded. Stock exchange figures showed that SSI, HAG and Refrigeration Electrical Engineering (REE), although all hitting their floor prices, stood in the top five in terms of volume.
"It was because investors were panicking and wanted to sell off shares, as there was no major information from any of these companies to affect the attitudes of investors," said ACB Securities Co analyst Tran Thi Hai Yen.
On the Hanoi Stock Exchange, the HNX-Index also plunged by an additional 3.5 per cent yesterday to close at 71.88 points. Decliners outnumbered advancers on the northern bourse by 269-23, although the value of trades climbed 3 percent over the previous session to VND365.8 billion ($17.4 million), on a volume of 35.2 million shares.
Kim Long Securities (KLS) saw the brisking trades, with 3.5 million shares changing hands, while a few securities and banking shares such as KLS, Habubank (HBB) and Bao Viet Securities (BVS) attracted significant demand, the financial information website vietstock.vn noted.
Foreign investors continued to be net sellers in HCM City and net buyers in Ha Noi yesterday. On the southern bourse, they sold nearly 4 million shares worth VND134.4 billion ($6.4 million), while they bought a net of VND8.3 billion ($395,200) worth of shares in Ha Noi.
Hanoi-based analyst Dinh Hung Linh predicted that the market retraction would continue for the medium term.
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