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ASEAN STOCK WATCH 12  October  2010

Agricultural Stocks Star in ASEAN

Shayne Heffernan

Agricultural prices are climbing around the world and today Asean Agricultural stocks rallied, a rally that will continue today after prices in the USA for Agricultural items moved higher.

Astra Agro Lestari, Sri Trang-Agro Industry, Golden Agri-Resources and Indofood Agri Resources all posted solid gains today and it would appear to be the start of a much bigger move.

US markets were trading higher on an expected Fed move and that will add to gains across Asia today.

A Surge in CPO prices contributed to a strong day on the Bursa Malaysia.

Bursa Malaysia Closed up 6 points or 0.41% to close at 1487.41 points on Monday.

The 3rd month CPO future price gained RM170 to close at RM2930. The Finance Index added 0.16% to 13519.65 points, the Properties Index climbed 0.88% to 955.07 points and the Plantation Index rose 1.68% to 7036.76 points.

The market traded within a range of 5.53 points between an intra-day high of 1490.10 and a low of 1484.57 during the session.

Actively traded stocks include KBUNAI, HWGB, HWGB-WB, MALTON, MUHIBAH, IOICORP, AIM, OILCORP, GOCEAN and SAAG. Trading volume increased to 1094.09 mil shares worth RM1715.32 mil as compared to Friday’s 1075.15 mil shares worth RM1657.25 mil.

Leading Movers were GENTING (+26 sen to RM10.52), SIME (+11 sen to RM 8.70), IOICORP (+8 sen to RM5.58), KLK (+30 sen to RM17.70) and MISC (+8 sen to RM8.77).

Lagging Movers were AXIATA (-3 sen to RM4.54), TM (-5 sen to RM3.44), DIGI (-20 sen to RM24.78), CIMB (-2 sen to RM8.15) and TENAGA (-3 sen to RM8.83).

Market breadth was positive with 479 gainers as compared to 287 losers.

In Jakarta the Composite Index advanced 1.79 points, or 0.1 percent, to close at 3,548.75. About 6.2 billion shares worth Rp 5.91 trillion ($658.3 million) changed hands. Decliners outnumbered gainers 105 to 103.

The JCI gained 31 points to register a high of 3,575 in the first hour of trading before spending the rest of the day working its way lower.

Astra Agro Lestari, the country’s biggest listed palm oil plantation company, surged 7.1 percent higher, its steepest increase since Aug. 5, as palm oil futures climbed 5.7 percent to a 26-month high in Kuala Lumpur trading.

International Nickel Indonesia, the nation’s biggest nickel producer, rose 0.5 percent and Aneka Tambang, the state-owned gold and nickel producer, added 2.1 percent as nickel gained 1 percent to $24,650 a metric ton.

Astra International, the nation’s biggest automotive retailer and a seller of Honda motorcycles, fell 1 percent to Rp 56,400, its lowest close since Sept. 29.

Motorcycle sales in Indonesia dropped 34 percent in September from a month earlier to 481,485 units due to the Idul Fitri holiday, Bisnis Indonesia reported, citing data from the nation’s motorcycle association.

XL Axiata, a mobile-phone operator, climbed 1.9 percent to Rp 5,500, its highest close since Sept. 29. Sebastian Tobing, an analyst from UBS, raised his share-price estimate for XL Axiata to Rp 6,500 from Rp 5,500, saying valuations “remain attractive.”

Indofood Sukses Makmur, Indonesia’s biggest instant-noodle maker, lost 4.4 percent to Rp 4,875, its lowest close since Sept. 7.

The company had its stock rating lowered to “neutral” from “overweight” by Stevanus Juanda at JPMorgan Chase, citing the lack of a “major catalyst” after the listing of a packaged-foods unit. The brokerage reduced the share-price estimate to Rp 4,650 from Rp 5,000. The company also faced a recall of its Indomie instant noodles in Taiwan and Hong Kong.

Meanwhile, the rupiah rose 0.1 percent to 8,928 per dollar as of the market’s close on Monday, trading near its highest level in more than three years on speculation that the US Federal Reserve would step up asset purchases to boost the US economy, increasing the flow of funds to higher-yielding assets.

The Stock Exchange of Thailand (SET) composite index went up 14.66 points or 1.52% to close at 977.85 points at the end of trading session on Monday afternoon. The trade value was 27.05 billion baht.

Shares in Sri Trang-Agro Industry Pcl STA, the country’s largest publicly traded rubber maker, hit an all-time high on Monday as strong demand from the automobile industry boosted its earnings outlook.

At 0350 GMT, Sri Trang shares were up 8.4 percent at 24.6 bajt, having hit a record of 24.8 baht. The main Thai index .SETI was up 1 percent.

Broker Trinity Securities said the shares were relatively undervalued, trading at a price to earnings ratio of 6-7, well below its target of 10.

BTS Group, the operator of the Bangkok SkyTrain, has signed a 50-million (2-billion-baht) deal with Siemens of Germany to supply one car to each of its 35 three-car trains.

Chief operating officer Surapong Laoha-Uny said the deliveries of the new carriages were scheduled over the next 30 months to serve the expected growing demand on the Sukhumvit route following the opening of the On Nut-Baring extension in mid-August 2011.

Operation of the new section is forecast to help lift average ridership to 500,000 a day next year. Revenue growth in 2011 is expected to exceed the 8% figure estimated this year, thanks partly to the increased capacity of its new four-car trains.

Next month, BTS will introduce its new Chinese-made four-car trains. The 12 new trains will be in full service by December to help attract customers on the congested Silom route, said Mr Surapong.

The Chinese-made trains will increase SkyTrain capacity by 30% from the current three-car trains made by Siemens. The new trains each have a capacity of 1,490 passengers, while the current three-car series can carry 1,106.

Average ridership on the SkyTrain on weekdays is 460,000 and is projected to reach 480,000 by year-end.

Top five most active values were as follows;

PTTEP closed at 170.00 baht, up 5.50 baht (3.34%)

PTT closed at 306.00 baht, up 4.00 baht (1.32%)

BANPU closed at 740.00 baht, up 10.00 baht (1.37%)

STA closed at 25.00 baht, up 2.30 baht (10.13%)

CPF closed at 24.20 baht, up 0.70 baht (2.98%)

Singapore shares rose 0.3 percent in the morning session on Monday, led by gains in palm oil firms, By the midday break, the Straits Times Index (STI) was up 9.78 points at 3,163.12. The total market volume was 1.5 billion shares.

Shares of Singapore-listed palm oil firms outperformed the broader market on prospects for higher demand for palm oil amid concerns of a shortage of soy and corn crop in the U.S., traders said.

“Palm oil plays will normally take the lead from crude oil prices. Both are heavily correlated and we expect crude to top $100 next year,” representing further upside for palm oil stocks.

Golden Agri-Resources (GAGR) rose 5.2 percent to S$0.605 while rival Indofood Agri Resources (IFAR) climbed 4.8 percent to S$2.40.

The world’s largest palm oil firm Wilmar International (WLIL) gained 1.3 percent at S$6.06.

Tey said he expected the STI’s upside to be capped at 3,172 points in the afternoon session.

“We expect a dull week ahead for the STI as we look towards the earnings season starting next week,” Tey said.

“I believe third quarter corporate earnings may be very lukewarm, so I see little upside for the rest of the year.”

Shares of Singapore’s Biosensors International (BIOS.), which licenses medical technology, rose 10 percent to S$1.10 after it said an investor had bought a near 30 percent stake in the firm.

In Manilla, the Philippine Stock Exchange index (PSEi) shed 18.22 points, or 0.43 percent, to close at 4,218.79 Monday.

The broader all-share index was also down by 3.50 points or 0.13 percent to 2,688.12. All sub-indices slipped except holding firms, which rose by 32.64 points, or 1.01 percent, to 3,264.42 points.

The property index led the decline, losing 37.41 points, or 2.32 percent, to close at 1,575.30.

Decliners led advancers nearly two to one with 90 shares slipping and 46 gaining. Prices of 35 issues were unchanged. Volume was thin with a total of 1.7 billion shares worth P5.1 billion changing hands.

“We are really expecting the market to consolidate for the week. We don’t expect any market moving news to come out in the next few days,” said Astro del Castillo of First Grade Holdings.

“I think it will be better if the index slips a little bit more.”

This will give more investors the opportunity to buy stocks before the index climbs to even higher levels next week


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