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ASEAN STOCK WATCH Asean Affairs   24  November  2010

ASEAN Markets will trade lower at open

Shayne Heffernan

ASEAN Markets will trade lower at open but may rally in the afternoon session.

The Dow Jones industrial average tumbled 142.21 points, or 1.27 per cent to end at 11,036.37. The Standard & Poor's 500 Index fell 17.11 points, or 1.43 per cent, to finish unofficially at 1180.73. The Nasdaq Composite Index lost 37.07 points, or 1.46 per cent, to close unofficially at 2494.95

European stocks sank after losses elsewhere as investors dumped risky assets on the back of fading enthusiasm over Ireland's bailout and a spike in tensions between North and South Korea.

Financial markets were also hit by Chinese moves to cool its booming economy and an overnight raid by FBI agents on three hedge fund firms as part of a vast insider-trading probe.

Markets also fell on the back of political tensions in Dublin, as Irish Prime Minister Brian Cowen's governing coalition appeared to fall apart.

In Europe, the FTSE 100 index of leading British shares closed down 95.55 points, or 1.8 per cent at 5581.28 while Germany's DAX tumbled 117.05 points, or 1.7 per cent, to 6705. The CAC-40 in France ended 94.47 points, or 2.5 per cent, lower at 3724.42.

Stock markets in the so-called periphery were battered, with Spain's Ibex closing down 2.8 per cent down and Portugal's PSI 2.1 per cent lower. Ireland's main ISEQ index slid another 2.9 per cent.

In Kuala Lumpur the Bursa Malaysia fell 1.04% to close at 1487.53 on concern over Europe’s debt crisis and speculation China may raise interest rates to curb inflation.


The Losers were MAYBANK (-14 sen to RM8.79), CIMB (-10 sen to RM8.31), SIME (-12 sen to RM8.70), TNB (-16 sen to RM8.51) and GENTING (-12 sen to RM10.04).

The Winner was PUBLIC BANK (+2 sen to RM12.82).

Market breadth was negative with 96 gainers as compared to 784 losers.

Market sentiment also took a hit after North and South Korea exchanged artillery fire. The Finance Index lost 1.14% to 13622.97 points, the Properties Index slumped 2.16% to 974.18 points and the Plantation Index fell 1.40% to 7630.68 points. The market traded within a range of 20.81 points between an intra-day high of 1508.34 and a low of 1487.53 during the session.Trading volume increased to 1175.05 mil shares worth RM2008.80 mil as compared to Monday’s 968.59 mil shares worth RM1165.85 mil.

In Singapore the market fell 64.62 points or 2.03 percent on Tuesday with the benchmark Straits Times Index (STI) closing at 3,126.3 points.

Crude palm oil for February delivery dropped as much as 2.5 percent in Kuala Lumpur today.

Golden Agri-Resources Ltd., the world’s second- biggest palm-oil producer, slumped 4.2 percent to 68.5 Singapore cents. Indofood Agri Resources Ltd., the palm-oil unit of Indonesia’s biggest noodle maker, dropped 3.8 percent to S$2.53.

Wilmar International Ltd. the world’s biggest palm oil trader, declined 2.1 percent to S$6.02. Deutsche Bank AG lowered its rating to “hold” from “buy.”

Olam International Ltd., one of the world’s three biggest cotton traders, sank 3.1 percent to S$3.10. Cotton declined to a four-week low as China, the world’s biggest consumer, took steps to curb speculative trading and cool its economy, eroding demand from textile producers.

StarHub Ltd. , Singapore’s second-biggest phone company, fell 0.8 percent to S$2.66. Citigroup Inc. lowered its rating on the stock to “sell” from “hold.”

STX Pan Ocean Co. , South Korea’s biggest bulk carrier, slipped 1.4 percent to S$13.90 after North Korea fired artillery shells into South Korea, injuring 14 soldiers.

In Manila the Philippine Stock Exchange index trading sideways on Tuesday before it settled at 4, 147.35, 0.94 percent or 39.54 points lower. The broader all-share index was up by 2.35 percent or 65.25 points to 2,830.42.

Trading volume reached 1.18 billion shares worth P5.24 billion ($126.1 million). Decliners continue to outsmart advancers 88 to 54 while 40 shares did not move.

The holding firm sector was the biggest drag to the bellwether, followed by the financials, property and the mining and oil sectors. Industrial and the service subindices bucked the decline.

Despite the mild profit-taking, analyst Justino Calaycay of Accord Capital Equities Corp. said the over-all view for the market continues to be encouraging.

“Interest rates are not seen to rise at least within the next three-to-six months giving the stocks twin-boosts. With cost-of- money relatively cheap, companies may be inclined to fund expansion of current or new businesses – especially if consumer demand gains traction. Lower interest expense will theoretically free up some cash and expand earnings. On the other hand, the low rates regime keeps a lid on returns on alternative instruments,” he said.

The market is just consolidating but technical conditions have already improved and are pointing to a possible near-term rebound, he added.

Meanwhile, AB Capital Securities, Inc. said investors continued to be cautious owing to concerns in Chinese and European markets.

However, the concern on China was somewhat tempered by the confirmation that Ireland had finally accepted aid from the European Union and the International Monetary Fund,” it said.

“The market’s volatility is expected to taper off in the coming sessions. The composite index is seen to consolidate…the bias will be determined by the changing moods of the global market. Notwithstanding, we expect interest to pick up towards the end of the year as fund managers to start to window dress their portfolios,” AB Capital Securities noted.

Stocks in the 30-company index closed mixed. SM Investments Corp. finished in the negative along with Alliance Global Group, Inc. and Aboitiz Power Corp.

Heavyweight Philippine Long Distance Telephone Co. closed higher, while Ayala Land, Inc. remains unchanged.

Arrow Resources Development Inc. OTC:ARWD, PT Astra Agro Lestari Tbk JAK:AALI, Aberdeen Indonesia Fund, Inc. AMEX:IF, Market Vectors Indonesia Index (ETF) NYSE:IDX

PT Astra Agro Lestari Tbk is an Indonesia-based plantation company. The Company’s principal activities are the operation of oil palm, rubber and cocoa plantations, general trading, manufacturing, transportation, consultation and related services. Its 4,059-hectare oil palm plantation is located in South Kalimantan and the cooking oil factory is located in North Sumatra, Indonesia. The Company and its subsidiaries’ mills have production capacities of 940 tons of fruit bunch per hour and 600 tons of kernel per day and 300 tons of crude palm oil (CPO) per day. The subsidiaries’ plantations and mills are located in Java, Sumatra, Kalimantan and Sulawesi.

Arrow Resources Development Inc. OTC:ARWD,

Arrow Resources Development Inc. (ARWD) provides corporate operating structure, financial operations, sales and marketing activities and the financial administrative infrastructure for the commercial development of land and natural resources in Indonesia. The land to be developed has been categorized as environmentally “critical land” by the Indonesian government due to deforestation by local farmers and predatory logging companies. Arrow and their partners undertake every project in a manner that is sensitive to the local environment and social structure, blending economic growth with socially conscious development. All current and future operations utilize the existing natural resources in a sustainable, renewable and responsible manner.

Aberdeen Indonesia Fund, Inc. AMEX:IF

Aberdeen Indonesia Fund, Inc. (the Fund), formerly Indonesia Fund, Inc., is a closed-end fund. The Fund seeks long-term capital appreciation as a primary objective and income as a secondary objective, by investing primarily in Indonesian securities. Aberdeen Asset Management Asia Limited serves as the Investment Adviser of the Fund.

Market Vectors Indonesia Index (ETF) NYSE:IDX

The Indonesia Index ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Indonesia Index.

The Market Vectors Indonesia Index is a rules-based, modified market capitalization-weighted, float-adjusted index intended to give investors exposure to Indonesia.



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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