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ASEAN STOCK WATCH Asean Affairs   9  November  2010

Asean Market To Consolidate, Hot Money to Continue

Shayne Heffernan

ASEAN Markets are set to consolidate today after a flat night in the USA. Ebeling Heffernan Strong Buys Golden-Agri, PDLT, Bumi, PTT, Adaro Energy all outperformed. Today we are looking for bargains, Yee Lee, STX, IVL, Olam, Banpu, PDLT.

Over night in the USA the Dow Jones industrial average shed 41.10 points, or 0.36 per cent, to 11,402.98. The Standard & Poor's 500 Index dipped 3.89 points, or 0.32 per cent, to 1221.96. The Nasdaq Composite Index gained 0.38 points, or 0.01 per cent, to 2579.36.

Despite a small rally in the USD Hot Money will continue to flow into the ASEAN Markets today.

The S&P 500 faces strong resistance around 1228, which would retrace 61.8 per cent of the decline between its historic highs in 2007 and the 12-year low in March 2009. This is one of the so-called Fibonacci retracements that chartists widely follow and indicate buying and selling points.

Back in April, a first attempt to breach that level failed and preceded a decline that took the index to its 2010 low in early July.

Dow Jones 11,406.84 -37.24 (-0.33%)

S&P 500 1,223.25 -2.60 (-0.21%)

Nasdaq 2,580.05 +1.07 (0.04%)

In Jakarta the JCI increased 43.96 points, or 1.2 percent, to 3,699.26. About 4.7 billion shares valued at Rp 5.9 trillion ($663.2 million) changed hands. Gainers outnumbered decliners 130 to 67.

Among the gainers, Ebeling Heffernan Strong Buy Telekomunikasi Indonesia rose 3.8 percent to Rp 8,150. It was the most active stock by value.

Adaro Energy, Indonesia’s second-largest coal producer, jumped 3.3 percent to Rp 2,350.

The company said that unprecedented rainfall had caused it to revise down its coal production target to between 42 million and 43 million tons from 45 million tons.

Ebeling Heffernan Strong Buy Bumi Resources, Asia’s biggest exporter of power-station coal, rose 3.3 percent to Rp 2,350.

Bumi Mineral Resources, a unit of the company, expects to raise at least $200 million in an IPO this month, selling 4.32 billion shares at Rp 625 to Rp 635 per share.

Its listing on Dec. 2 will boost the number of publicly traded companies under the Bakrie Group to eight.

Indonesia’s November coal benchmark price rose 3 percent to $95.51 a ton from a month ago, according to the Energy Ministry Web site.

Astra International, the nation’s biggest automotive retailer, gained 1.2 percent to Rp 57,400.

President director Prijono Sugiarto said that the company planned to buy new shares of Bank Permata in a rights offer later this month to maintain its 44.51 percent stake ownership in the bank.

Meanwhile, the rupiah fell on Monday, trading at 8,902 against the US dollar.

The currency weakened on concern that slowing economic growth would curb capital inflows into Southeast Asia’s biggest economy.

The currency has advanced 5.4 percent this year.

Deni Hamzah, an analyst at Corfina Capital, said the initial share price of Krakatau Steel was expected to encourage investors to consider Indonesian stocks.

Shares in Krakatau Steel are expected to be listed on the Indonesia Stock Exchange on Wednesday.

In Kuala Lumpur the Bursa Malaysia rose 0.54% to close at 1519.84 points on persistent buying interest in plantation stocks on higher crude palm oil prices.


The Winners were IOI (+11 sen to RM5.97), MAYBANK (+10 sen to RM9.10), SIME (+10 sen to RM9.03), KLK (+82 sen to RM20.62) and Ebeling Heffernan Strong Buy GENTING (+12 sen to RM10.80).

The Losers were DIGI (-44 sen to RM24.96), AMMB (-4 sen to RM6.30), GENM (-3 sen to RM3.47), GAMUDA (-3 sen to RM3.77) and MMC (-4 sen to RM3.04). Market breadth was positive with 592 gainers as compared to 291 losers.

The Finance Index added 0.40% to 13815.72 points, the Properties Index surged 3.4% to 1036.96 points and the Plantation Index climbed 2.2% to 7886.30 points. The market traded within a range of 5.76 points between an intra-day high of 1522.77 and a low of 1517.01 during the session. Trading volume increased to 1520.28 mil shares worth RM2252.64 mil as compared to Thursday’s 1278.55 mil shares worth RM1610.34 mil.

In Singapore shares rose 1.9% to end at a 3 Year high on Monday as investors looked at jobs data out of the United States and The Fed chipped in with an extra $600b.

The blue-chip Straits Times Index (STI) closed 60.09 points at 3,300.40, as investors caught up with the commodities-driven rally in Asian shares seen on Friday. The Singapore market was closed on Friday for Deepavali public holiday.

Overall volume traded on Monday was 2.96 billion shares worth S$2.97 billion. On the broader market, gainers outpaced losers 384 to 151.

Among the gainers, palm oil stock Ebeling Heffernan Strong Buy Golden-Agri Resources surged 11.4% to S$0.78 while Noble Group climbed 4.9% to S$2.13.

Among the banks, OCBC gained 4.7% to S$9.85 while UOB rose 0.7% to S$18.50. But DBS Group fell 0.7% to S$14.12.

In Bangkok, The Stock Exchange of Thailand (SET) composite index on Monday gained 9.34 points or 0.90 per cent to close at 1,049.79 points. The market value was 43.17 billion baht, with 3.85 billion shares traded. The Set is headed to the Ebeling Heffernan target of 1100 in early 2011.

Mr Charamporn, President of the SET says a better IT platform will allow the SET to serve foreign institutions’ requirements for algorithm or programme trading, which offers speed as well as sophistication.

The exchange also wants to diversify risk by expanding the investor base to various destinations including Malaysia, Africa and South America. A more balanced client base would help insulate the SET from downturns that result when developed countries face economic problems and their investors pull back from emerging markets.

Increasing the weight of Thai shares in the MSCI Index, the most well-known index that fund managers use to benchmark performances, is also important, he added.

For local investors in the SET, new opportunities will arrive soon to invest in seven stock exchanges in six regional countries in a co-operative venture involving Thailand, Singapore, Malaysia, the Philippines, Indonesia and Vietnam.

Even though the SET has outperformed most of the world’s markets this year _ the index was up 42% from the start of the year as of Friday _ Mr Charamporn says much more can be done to make the exchange more competitive and appealing.

As of the end of October, he said, the SET had delivered a 36% return on investment in Thai baht terms and 52% in dollar terms.

Market capitalisation was at a 13-year high of 8.06 trillion baht as of Oct 15, while the number of active accounts was around 178,000.

PTT remained at 342.00 baht.

IRPC closed at 4.82 baht, up 0.12 baht or 2.55 per cent.

PTTAR closed at 36.25 baht, up 1.50 baht or 4.32 per cent.

PTTEP closed at 191.50 baht, up 4.00 baht or 2.13 per cent.

PTL closed at 38.50 baht, up 3.75 baht or 10.79 per cent.

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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