ASEAN KEY DESTINATIONS
Asean Stock Watch-May 9
Commodity prices have gone into free fall in recent days as investors take flight amid near panic over the health of the global economy.
Oil, rubber, copper, gold and silver have been dumped in a savage sell-off, sparking similar bloodshed on stock markets in the United States, European and most Asian bourses.
In just five days, S&P's GSCI index of 24 commodities has fallen 11.4 per cent - the longest losing streak since August.
The once-booming commodity sector has looked fragile this week but it was Thursday's brutal falls that really rocked world markets.
Oil was trading at around US$99.8 a barrel on Thursday, near its lowest level in almost two months while silver has crashed more than 25 per cent since its record high of US$49.51 an ounce on April 28. It fell more than 10 per cent on Thursday alone.
Jittery investors reacted strongly to the dramatic price falls and sent Asian markets tumbling Friday.
Japan's Nikkei Stock Average lost 1.45 per cent, Singapore's Straits Times Index was down 0.33 per cent, South Korea's Kospi Composite dropped 1.52 per cent and Hong Kong's Hang Seng Index shed 0.44 per cent.
"There are fears that global growth could be threatened but it isn't warranted," said Barclays Capital economist Leong Wai Ho. "The... underlying drivers are still for growth in the medium term."
The bailout of commodities may have been overdone given unexpectedly strong employment figures out of the United States last night.
Investors had tipped a grim number but private companies surprised by adding 268,000 jobs last month, the fastest pace in five years and well ahead of economist expectations of an 186,000 increase. The figures made for a strong opening on Wall Street yesterday, with the Dow up 1 per cent at the start.
Observers also say the commodity sell-off was triggered purely by panic and does not spell the start of another global financial crisis.
At 9.30am today, there were 164 gainers, 103 losers and 129 counters traded unchanged on the Bursa Malaysia.
The FBM-KLCI was at 1,518.31 up 2.81 points, the FBMACE was at 4,267.38 up 17.87 points, and the FBMEmas was at 10,459.08 up 15.13 points.
Share prices on Bursa Malaysia will likely continue its downtrend this week with rising interest rates and a massive sell-off in commodities expected to be the biggest drag on the local bourse. Head of Retail Research, Affin Investment Bank, Dr Nazri Khan said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to continue its downward correction to test the psychological 1,500 support level.
“We believe the old bearish stories are back again with investors worrying about the global double-dip recession and sovereign debt crisis in the developed world,” he added. He said negative market internals suggest a deeper correction, namely lower volume, negative breadth, weaker momentum and rising volatility indicators.
During the week, it was reported that the Reuters-Jefferies CRB Index, the global commodity benchmark, had fallen nearly 5%, constituting the biggest weekly fall since late 2008. This has dampened investors sentiment in Asian markets.
Also, the local bourse was on a downtrend in line with weaknesses in external markets, doubts over the global economic growth with the poor US jobs data and the plunge in commodity prices. Bank Negara on Thursday, raised the Overnight Policy Rate (OPR) by 25 basis points to 3% with immediate effect, while the Statutory Reserve Requirement (SRR) will be increased from 2% to 3% effective May 16.
On a weekly basis, the key index decreased by 19.45 points to 1,515.5 from 1,534.95 last Friday. The Finance Index declined 87.41 points to 13,951.75 from 14,039.16 previously. The Industrial Index decreased 73.71 points to 2,718.66 from 2,792.37 last Friday.
The weekly volume decreased to 3.924 billion shares worth RM5.45bil from 5.007 billion shares worth RM4.901bil previously.
The main market turnover fell to 2.952 billion shares worth RM5.217bil from 3.705 billion shares valued at RM6.139bil from previously.
THE Philippine stock market and the peso weakened further a day after the Bangko Sentral ng Pilipinas (BSP) raised its key interest rates by another 25 basis points.
Share prices succumbed to profit-taking for the fourth consecutive session following the weakness in major bourses as lower local corporate earnings and the BSP rate hike weighed on investor sentiment.
At the Philippine Stock Exchange, the composite index fell 29.61 points, or 0.7 percent to 4,219.07, while the broader all-shares index lost 9.59 points, or 0.32 percent to 2,959.21. Losers beat gainers, 89 to 40, while 40 stocks were unchanged. A total of 7.22 billion stocks worth P6.71 billion changed hands.
“Stocks closed lower because of the weak regional sentiments despite oil prices going to $100 a barrel and not-so-good earnings of companies like Aboitiz,” said Astro del Castillo, managing director of First Grade Holdings.
The Dow Jones industrial average dropped 139.41 points, or 1.10 percent to 12,584.17 after jobless benefits surprisingly rose last week to its highest level since August, lowering expectations for the US government’s April employment report due Friday.
Aboitiz Equity Ventures Inc. reported a decline in profits, dragged mainly by the lower electricity prices and sales of its power unit, a major contributor to its earnings. Also dampening investor sentiment was the move of the BSP to raise borrowing costs by 25 basis points after inflation rose to a one-year high in April.
“The market was affected by the rate hike, resulting in the realignment of funds,” said del Castillo.
While the rate hike has been discounted by the market, it is imminent that inflationary pressures are already felt by the economy especially with the impending wage hike, he added. At the Philippine Dealing System, the peso on Friday slipped back to the 43.080 to the US dollar level. The exchange rate opened higher at P43.050:$1, and moved to an intra-day high of P43.210 and a low of P43.010.
Singapore shares opened higher on Monday, with the benchmark Straits Times Index at 3,110.17 in early trade, up 0.34 percent, or 10.65 points.
Around 27.6 million shares exchanged hands.
Gainers beat losers 78 to 29.
Thai stocks opened up 4.84 points at the start of trade Monday morning. The Stock Exchange of Thailand main index opened at 1,055.69 points, up 4.84 points or 0.46% from Friday’s close. The trade value was 1.37 billion baht.
The SET50 index opened at 741.74 points, up 3.96 points or 0.54%, with a total trade value of 670.38 million baht.
The SET100 index rose 8.24 points, or 0.51%, to 1,618.67 points, with a total turnover of 1.21 billion baht.
The MAI index opened up 0.81 points, or 0.28%, to stand at 286.08 points, with total transaction value of 13.54 million baht.
The top five most active shares:
JAS stood at 2.74 baht, down 0.02 baht (0.72%)
DTAC stood at 56.50 baht, up 2.00 baht (3.67%)
PTT stood at 349.00 baht, up 2.00 baht (0.58%)
RAIMON stood at 1.18 baht, up 0.03 baht (2.61%)
TTA stood at 22.40 baht, up 0.20 baht (0.90%)
The Stock Exchange of Thailand Index broke its resistance level to hit a high of 1,113.63 points last week. Continued foreign fund inflows, a positive outlook ahead of the midyear election, and robust Asian markets all drove trade.
The index moved within a range of 1,083.73 and 1,113.63 points to close at 1,105.29 on Friday, up 1.88 percent from 1,084.91 points the previous week.
Foreign investors were net buyers of 7.279 billion baht and proprietary investors 1.27 billion. Local institutions were the largest net sellers, especially on Friday, at 5.9 billion baht for the week, followed by retail investors at 2.64 billion.
Big movers: Large-cap stocks remained the top players as foreigners were active investors. Banking, resources and energy, and construction materials were among the most active sectors including BBL, CPF, PTT, BANPU and SCC.
Trading volumes was driven by speculation on healthy first-quarter operating results. CPF recorded turnover of 10 billion baht and close the week at 29.50 baht, up 10.17 percent. SCC closed up 5 percent at 377 baht, PTT gained 2.4% to 380 baht, TOP rose 2% to 85 baht, and IVL closed up 4 percent at 53.25 baht.
BBL led the banking sector with turnover of 9.8 billion baht to close at 176.50 baht, down 2 percent. SCB closed unchanged at 116.50 baht. KBANK closed at 129 baht, down 1.55%, while KTB gained 6.8 percent to 20.50 baht.
Newsmakers: PTT said it would make another attempt to persuade the Industry Ministry to raise the price of NGV to 14-15 baht per kilogramme from current capped level of 8.50 baht, to reflect real costs. Its shareholders last week complained the company was carrying a cost of 10 billion baht per year without compensation from the government.
PTT also announced also plans to invest in a new electricity plant in Vietnam and expects to have capacity of 6,000 megawatts within 10 years.
- Ten commercial banks reported first-quarter net profits of 38.5 billion baht, an increase of 12.5 billion or 48% from the same period last year, on higher fee-based income and healthy loan growth. The industry figure was inflated somewhat by a doubling in SCB's net profit to reflect the consolidation of insurer SCNYL on its books for the first time under new accounting rules. Coming up this week: Investors must be cautious about profit taking this week as the SET has rallied in the past two weeks to break 1,100 points.
- The National Energy Policy Committee will meet on Wednesday to consider whether to continue capping the price of diesel at 30 baht per litre.
- The Bank of Thailand will release its monthly economic report on Thursday. - The baht is expected to continue to strengthen in line with foreign fund inflows chasing opportunities in Thai equities and bonds.
Shares continued to decline on the HCM City Stock Exchange Friday, as the VN-Index fell by another 1.37 percent to close at 472.71 points. However, the value of trades jumped by nearly 66 percent over Thursday's total to VND794.3 billion (US$37.8 million).
Both of the stocks most responsible lately for driving Index movements – Masan Group (MSN) and Bao Viet Holdings (BVH) – continued falling sharply, with MSN down 4.9 percent and BVH down 4.5 percent, while 118 out of 289 listed stocks and fund certificates overall saw declines.
Among the few leading shares to buck the downward trend, PetroVietnam Finance (PVF) rose by 1.4 percent, software producer FPT by 1 percent, and Eximbank (EIB) by 0.7 percent.
Sacombank (STB) was the most-active share on the HCM City bourse with a volume of just 928,620 shares.
Nguyen Duc Giang, head of the brokerage department for a Hanoi-based securities company, saw signs of improved market sentiment yesterday with the participation of more active buyers. First-quarter earnings results were drawing little investor attention, Giang said, adding "I expect the results for next quarter will reflect the impact of high interest rates and slowing demand."
He noted that the recent rally appeared to have run out of steam as the market wasn't ready to run up prices and technical indicators were showing the emergence of sell pressures.
"It is believed that the market continues to trade within a fairly narrow range and so is attracting little buyer attention."
On the Hanoi Stock Exchange, the HNX-Index rose by 0.72 percent to 82.69 points when half of the listed stocks seeing gains. Trading volume remained modest at 21.7 million shares, totaling VND295.1 billion ($14.1 million), while VNDirect Securities Co (VND) topped trading with a volume of 1.9 million shares.
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