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ASEAN STOCK WATCH Asean Affairs   13  November  2010

Asean Market Weekly Summary

Shayne Heffernan

China and Wall St took the lead in ASEAN Trading this week and after hitting all times highs Monday and Tuesday, bad news overseas pulled exchanges lower.

OLAM, Sembcorp Marine, PTT, PTTEP, IVL, Arrow Resources, Noble Group, UVAN, YEE LEE, Genting remain hot buys this week.

In Singapore the Straits Times Index closed lower on Friday, with the benchmark Straits Times Index at 3,252.00, down 1.26 per cent, or 41.39 points.

Temasek Holdings is poised to invest around US$1.55 billion (S$2 billion) in China’s second-largest lender, in a move that will further entrench its presence in the fast-growing Asian market.

The Singapore investment firm is likely to exercise its entitlement in the rights issue of China Construction Bank (CCB), and also take up the Bank of America’s (BoA) entire allocation.

A statement from CCB on Thursday announced that BoA had agreed to sell its entire rights issue entitlement to Temasek. This amounts to a total of 1.79 billion shares.

In a rights issue, a company sells new shares to raise capital – with shares usually offered to existing shareholders at a discount on the current price.

CCB – whose largest shareholder is the Chinese government – is offering 0.7 share for every 10 existing shares at 3.77 yuan per A-share and HK$4.38 per H-share. The bank is listed on both Hong Kong’s and Shanghai’s bourses.

Given its 6 per cent stake in CCB, Temasek is entitled to about 940 million CCB shares.

About 2.4 billion shares exchanged hands.

Losers beat gainers 487 to 90.

The Stock Exchange of Thailand (SET) composite index on Friday lost 11.00 points or 1.07 per cent to close at 1,018.86 points. The market value was 48.41 billion baht, with 5.39 billion shares traded.

PTT Plc, Thailand’s energy flagship, is taking steps to expand into coal mining by acquiring the coal assets of Australian-listed Straits Resources Ltd (SRL) for 16.2 billion baht, says Tevin Vongvanich, PTT’s chief financial officer.

Under the deal, PTT Mining Ltd (PTTML), a wholly owned subsidiary of the group’s investment arm PTT International, has agreed to pay SRL shareholders A$1.72 a share or about A$544 million (16.2 billion baht).

PTT will provide financial support to PTTML.

The deal is in line with PTT’s long-term strategy of raising its exposure to high-quality coal assets with good growth prospects.

Mr Tevin said that since SRL was involved in both metals and coal, the agreement signed with SRL was to acquire 100% of the shares after SRL demerges its metal assets from its coal assets.

SRL will call a shareholders’ meeting in next year’s first quarter to seek approval for the demerger and acquisition

Top five most active values were as follows;

Ebeling Heffernan Strong Buy IVL closed at 46.75 baht, up by 3.50 or 8.09 per cent.

PTT closed at 329.00 baht, down by 4.00 or 1.20 per cent.

PTTEP closed at 182.50 baht, down by 5.50 or 2.93 per cent.

PTTAR closed at 35.25 baht, down by 0.25 or 0.70 per cent.

PTL closed at 40.00 baht, down by 0.75 or 1.84 per cent.

In Kuala Lumpur the Bursa Malaysia fell 0.92% to close at 1499.81 points which was a strong recovery after falling as much as 1.7% earlier, CHina rate news created a sell off but investors were back in a buying mood in the afternoon.

Most active stocks included TIME, ESCERAM-WA, KBUNAI, JOTECH, KNM, AXIATA, HUBLINE, DRBHCOM, TIMECOM and SALCON. Trading volume increased to 1724.70 mil shares worth RM2393.77 mil as compared to Thursday’s 1576.62 mil shares worth RM2279.65 mil.

The Losers were GENTING (-44 sen to RM10.16), CIMB (-22 sen to RM8.30), GAMUDA (-22 sen to RM3.46), SIME (-9 sen to RM8.85) and TNB (-12 sen to RM8.51).

The Winners were MAYBANK (+10 sen to RM9.20), AMMB (+4 sen to RM6.19), HONG LEONG BANK (+13 sen to RM9.68), GENM (+2 sen to RM3.50) and UMW (+1 sen to RM6.99). Market breadth was negative with 155 gainers as compared to 771

The Finance Index lost 0.36% to 13816.61 points, the Properties Index fell 2.07% to 1007.38 points and the Plantation Index eased 1.09% to 7771.76 points. The market traded within a range of 24.47 points between an intra-day high of 1512.53 and a low of 1488.06 during the session.losers.

In Manila the Philippine Stock Exchange index gave up 67.73 points or 1.6 percent to close at 4,076.68.

The local bourse saw this weak its worst beating since the bull run in September. The main index shed 272.43 points or 6.3 percent as profit-taking pressures overshadowed good tidings from a relatively favorable third-quarter earnings report season outside the index heavyweight telecom sector.

All counters traded in the red but the sell-down hit the financial and mining/oil counters the worst, which tumbled by 2.9 percent and 2.2 percent, respectively.

Value turnover eased to P4.64 billion. There were 110 decliners as against 34 advancers while 26 were unchanged.

Despite the overall index decline, foreign investors were starting to prowl for bargains as they were back on a net foreign buying position albeit at a modest level of P110 million for this session.

After clawing back some gains in previous days, Philippine Long Distance Telephone Co. tumbled anew alongside profit-taking on Aboitiz Power Corp., Megaworld Corp., Ayala Land Inc., Universal Robina Corp., Cebu Air Inc., Philippine National Bank, Metropolitan Bank & Trust Co., Banco de Oro Unibank Inc., Ayala Corp., DMCI Holdings Inc., International Container Terminal Services Inc., Energy Development Corp., Filinvest Land Inc., Atlas Consolidated Mining & Development Corp. and Security Bank Corp.

Among the few advancers were Alliance Global Group Inc., Metro Pacific Investments Corp. and Aboitiz Equity Ventures Inc.

The local market had very little inspiration to draw overseas as the Dow Jones Industrial Index fell by 73.94 points or 0.65 percent overnight to 11,283.10.

In Jakarta the JCI slid 78.77 points to close at 3,665.85 on Friday. About 6.4 billion shares worth Rp 6 trillion ($672 million) changed hands. Decliners outnumbered gainers 206 to 30.

The benchmark index rose 0.3 percent overall this week, gaining for a fifth-straight week.

The agriculture sector led declines on Friday as the price of palm oil saw its biggest drop in more than a year, reducing the revenue outlook for producers.

Astra Agro Lestari, the nation’s biggest listed plantation company, fell 0.5 percent to Rp 56,800. The January-delivery contract for palm oil slumped as much as 3.5 percent to 3,277 ringgit ($1,052) a metric ton in Kuala Lumpur.

The most active stock was Bumi Resources, which lost 2 percent to Rp 2,450. Dileep Srivastava, a company director, on Thursday said its production and sales volume could remain flat at 60 million metric tons this year after missing its initial target of 64 million tons due to heavy rains cutting output.

State coal producer Tambang Batubara Bukit Asam dropped 4 percent to Rp 20,400 after Citigroup downgraded the stock to “sell,” saying Indonesian coal stocks were “no longer cheap.”

Among the gainers, Astra International, the nation’s largest automotive retailer, advanced 0.5 percent to Rp 56,800, and developer Agung Podomoro Land rose 1.2 percent to Rp 415 after rising 12.3 percent on its market debut on Thursday.

Looking ahead, Pardomuan said the possible absence of positive sentiment would leave investors looking elsewhere for cues. “Regional markets will drive Indonesia’s capital market in the week ahead,” he said.

The rupiah wrapped up the week down 0.2 percent as it weakened to 8,922 against the dollar on Friday. The central bank’s recent intervention to slow gains has been driving the decline.

Bank Indonesia Deputy Governor Hartadi Sarwono said on Thursday that the one-month holding period on central bank debt might be extended if capital inflows strengthened and threatened to overheat the economy.

Shayne Heffernan brings more than 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over US$500m and 1 that reach a peak market cap of US$15billion. He has managed and overseen start-ups in Mining, Shipping, Technology and Financial Services.


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