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ASEAN STOCK WATCH Asean Affairs   21 November 2012

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Bernanke, in comments before the Economic Club of New York, said the Fed does not have the ability to offset the damage that would result if politicians fail to strike a deal to prevent a series of mandatory tax increases and spending cuts scheduled to go into effect early next year.

The statement caused a downdraft in the market, though the equity market cut most of its losses before the end of the day.

Stocks had rallied for the last two sessions after Washington politicians sounded an encouraging note that a deal to avoid the U.S. fiscal cliff could be reached. The gains followed two weeks of sharp losses that pushed the S&P 500 down through the 200-day moving average, a key benchmark of the market's long-term trend.

Dawei Special Economic Zone (SEZ)

Myanmar and Thailand have invited capable international investors to engage in Dawei Special Economic Zone (SEZ) project being implemented in Myanmar's southern Taninthayi region, China's Xinhua news agency said citing official media's report on Tuesday.

Thailand, on its part, will implement regional development tasks including roads, deep seaport, industrial zone, power plant, water supply, water treatment system, communication, high speed train in the Dawei SEZ, according to a Myanmar-Thai joint declaration issued in Phnom Penh on the occasion of the 21st Summit of the Association of Southeast Asian Nations (Asean).

The signing of the joint declaration was witnessed by Myanmar President U Thein Sein and Thai Prime Minister Yingluck Shinawatra, said the New Light of Myanmar.

Myanmar and Thailand have established a joint committee for the development of the Dawei SEZ and according to the committee, some prioritised projects are set to be completed in 2015.

The joint committee to speed up the comprehensive development of the Dawei SEZ and its related projects was set up during a visit to Thailand by Myanmar Vice President U Nyan Tun earlier this month and the committee's first meeting was followed in Bangkok.

Thailand is planning to set up more attractions to lure Chinese tourists, the country's ambassador to China says.

"We are determined to improve our tourism sector with new forms of tourist attractions to fit the changing demands of Chinese people," said Wiboon Khusakul.

"The Thai government has also pledged to increase the provision of safety and security for tourists in Thailand."

The ambassador was speaking in an exclusive interview with China Daily ahead of Premier Wen Jiabao's visit to Thailand from Tuesday — the first to the country by a Chinese premier in more than 10 years.

Some 1.7 million Chinese visitors went to Thailand in 2011, a 60 percent increase year-on-year, and the ambassador said the figure is expected to reach 2 million in 2012.

With its food, scenery and world-renowned hospitality, more Chinese companies are choosing Thailand for incentive trips. For instance, from Nov 4 to 20, more than 10,000 employees from a Chinese health food supplement company traveled to the country as part of an incentive award for meeting sales targets.

Yoma Strategic Holdings

Yoma Strategic Holdings yesterday announced plans for a mixed-use project in downtown Yangon that would be developed at a cost of up to US$350 million (S$429 million).

The Singapore-listed company has agreed to acquire an 80 per cent equity stake in Meeyahta International Hotel from Serge Pun and Associates Myanmar for US$81.28 million to acquire the rights to participate in the development of the residential, office, hotel and retail complex on the 10-acre site in the heart of Yangon with a total gross floor area (GFA) of 2 million square feet.

Yoma plans to sell shares in a 1-for-4 rights issue in the first quarter of next year to fund the transaction. It will sell up to 241 million new shares in the rights issue at a discount of 25 to 35 per cent from the closing price at a date to be determined. The plan has the backing of Mr Serge Pun, the company's Chairman and controlling shareholder, who will subscribe to his full entitlement as well as any rights shares not taken up by shareholders, it added.

Under the current master plan, the Victorian-era Railway Headquarters will be restored to its original grandeur and converted into a landmark 5-star hotel to rival the great historic hotels of the region, such as the Raffles Hotel in Singapore.

There are also proposals to build a 5-star luxurious condominium building next to the hotel, as well as a 4-star hotel and serviced apartment complex.

For business use, two Grade-A office towers will be constructed, totalling over 700,000 square feet of GFA. A retail podium made up of shops, a department store and a supermarket will also be built, comprising over 400,000 square feet of GFA.

Trading in Yoma shares was halted yesterday. The stock closed at 56 cents on Friday. It has risen 154.5 per cent this year, compared to the 11.5 per cent rise in the Straits Times Index.

Malaysian Resources

 Malaysian Resources Corporation Bhd's (MRCB) earnings jumped 142% to RM35.78mil in the third quarter ended Sept 30, 2012 from RM14.73mil a year ago, boosted by its property division.

It said on Tuesday its higher earnings were despite that finance costs had increased to RM35.19mil from RM8.09mil a year ago.

It said the improved performance of the group's property division contributed to the realisation of a higher operating profit at RM84.0mil in Q3, 2012 from RM29.5mil a year ago. This saw pre-tax profit surging more than 100% to RM47.1mil from RM20.5mil a year ago.

MRCB's revenue rose 4.7% to RM299.81mil from RM286.35mil while earnings per share were 2.58 sen compared with 1.06 sen.

"The higher revenue was contributed mainly from the on-going development projects in Kuala Lumpur Sentral which include the successful launch of The Sentral Residences in the current quarter," it said.

For the nine-months ended Sept 30, 2012, its earnings were marginally lower by 0.47% to RM63.09mil from RM63.39mil in the previous corresponding period. Revenue increased by 30.5% to RM969.94mil from RM742.69mil.

Golden Agri-Resources

Golden Agri-Resources, one of the world’s largest palm oil companies, announced on Monday that it raised 1.5 billion ringgit ($490 million) from selling five-year Islamic medium-term notes, called sukuk.

The sale is part of a larger plan to sell up to 5 billion ringgit in notes, the company said in a statement published on its website on Monday.

The notes will mature in November 2017, it said.

The company considers Malaysia the ideal location for the sale of its sukuk given the country’s well-established and advanced sukuk market with abundant liquidity, coupled with its familiarity with the palm oil industry in general, Golden Agri-Resources said.

The company hired OSK Investment Bank and RHB Investment Bank as the financial advisers for the Shariah compliant notes.

Franky O. Widjaja, the company’s head, said that the sukuk sale should help strengthen the company’s balance sheet.

“We believe that the sukuk will support GAR’s strategy by strengthening its balance sheet, extending the overall debt maturity profile, maximizing financial flexibility, and enhancing GAR’s position to execute internal and external growth plans,” Franky said in a the statement.

Golden Agri-Resources is the world’s second largest palm oil plantation company, with a total planted area of 459,500 hectares — including smallholders — as of Sept. 30. Its major plants are located on Sumatra.

The company, founded in 1996, has been listed on the Singapore Exchange since 1999, with market capitalization at $6.6 billion as of Oct. 31. Flambo International, an investment company, is its largest shareholder, with a 49.95 percent stake.

Golden Agri-Resources has several subsidiaries, including Smart, which has been listed on the Indonesia Stock Exchange since 1992.

In Indonesia, its primary activities include cultivating and harvesting oil palm trees; processing fresh fruit bunches into crude palm oil and palm kernel, and refining CPO into value-added products such as cooking oil, margarine and shortening.

San Miguel

 San Miguel Corp. has firmed up a P6-billion sale of secondary common shares in food unit San Miguel Pure Foods Co. Inc.

The transaction allows the food unit to widen its public float to meet the minimum requirement for continued listing on the Philippine Stock Exchange while boosting the parent firm’s diversification into other businesses.

In a disclosure to the PSE on Tuesday, SMC said it would place out 25 million common shares of Pure Foods at a price of P240 per share. The offer price marks a significant discount to the company’s last traded price of P680 per share.

The offer shares will account for 15 percent of Pure Foods’ total outstanding stock, thus beefing up its public ownership from the current meager level of 0.08 percent.

The PSE requires publicly listed companies to maintain a public ownership of at least 10 percent to remain listed on its bourse.  Failure to comply will result in a trading suspension by the first trading day of 2013.

The shares to be placed out by SMC are intended to be crossed on November 21.

The share is being arranged by Maybank ATR Kim Eng Financial Corp., Standard Chartered and UBS.

Yesterday in Asia

Tokyo, which has risen about five percent in the past three sessions, ended the day 0.12 percent lower on profit-taking and after the Bank of Japan held off any new monetary easing measures following a policy meeting.

The Nikkei shed 10.56 points to 9,142.64.

Sydney finished 0.56 percent, or 24.3 points, higher at 4,385.7 while Seoul was up 0.64 percent, or 12.08 points, to close at 1,890.18.

Hong Kong fell 0.16 percent, or 33.78 points, to 21,228.28, while Shanghai eased 0.40 percent, or 8.06 points, to 2,008.92.

In other markets:

– Taipei rose 16.73 points, or 0.23 percent, to 7,145.77.

Smartphone maker HTC fell 3.08 percent to Tw$236.0 while chip giant TSMC was 0.44 percent higher at Tw$90.4.

– Manila closed 0.94 percent higher, adding 51.03 points to 5,500.58.

Banco de Oro added 0.29 percent to 68.30 pesos, Philippine National Bank surged 11.69 percent to 84.10 pesos, while Metropolitan Bank finished 1.06 percent up at 95 pesos.

– Wellington climbed 0.77 percent, or 30.37 points, to 3,972.97.

Fletcher Building rose 3.7 percent rise to NZ$7.65 and Telecom was down 0.21 percent at NZ$2.38.

– Singapore closed up 0.27 percent, or 7.89 points to 2,958.82.

Olam International plunged 7.47 percent to Sg$1.61 while Keppel Corp gained 1.60 percent to Sg$10.17.

– Kuala Lumpur gained 0.89 points, or 0.05 percent, to end at 1,624.20.

UEM Land lost 1.6 percent to 4.82 ringgit, RHB Capital eased 0.9 percent to 7.59 while British American Tobacco gained 1.0 percent to 58.54.

– Jakarta ended down 0.02 percent, or 1.073 points, at 4,312.366.

Palm oil firm Sinar Mas Agro Resources and Technology dropped 2.86 percent to 6,800 rupiah and retailer Hero Supermarket slipped 2.44 percent to 4,000 rupiah.

– Bangkok lost 0.56 percent, or 7.24 points, to 1,276.41.

Telecoms company Advanced Info Service dropped 3.28 percent to 191.50 baht, while electricity firm EGCO added 0.78 percent to 129.00 baht.

– Mumbai dropped 0.05 percent, or 9.68 points, at 18,329.32 points.

IT outsourcer Infosys was down 1.46 percent at 2,325.40 rupees and carmaker Mahindra & Mahindra was up 3.25 percent at 938.35 rupees.

Shayne Heffernan Ph.D.  
Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
3 Raffles Place #07-01
Bharat Building Singapore 048617
Tel: +65 6329 6408 Fax: +65 6329 9699
Email :
Suite 53 Athenee Tower
63 Wireless Road, Lumpini, Pathumwan, Bangkok 10330
New York 347 5th Avenue, Suite 1402-508 NY, NY 10016


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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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