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ASEAN STOCK WATCH 21  October  2010

ASEAN Markets to Rally, PTT, IVL, Sembcorp, PLDT, Genting

Shayne Heffernan

Asean markets are in for another rally today and the best stock to own are PTT, IVL, Sembcorp, PLDT, Genting.

Earnings and Outlook lifted the Wall St Session over night.

Dow Jones 11,107.97 +129.35 (1.18%)

S&P 500 1,178.17 +12.27 (1.05%)

Nasdaq 2,457.39 +20.44 (0.84%)

Energy stocks will see the bestof the gains in the morning session in ASEAN and PTT stands out as a quality investment in Asean Energy.

Bursa Malaysia rallied in the afternoon session to close at 1486.78 points, down 0.13% after falling as much as 0.8% earlier.

The benchmark FBM KLCI opened deep in red on the back of negative cues from the US market but managed to pare some losses in the afternoon session on bargain hunting in selected heavyweights.


Trading volume declined to 1488.83 mil shares worth RM1802.94 mil as compared to Tuesday’s 1499.66 mil shares worth RM1819.54 mil.

Losers were AXIATA (-6 sen to RM4.41), GENM (-5 sen to RM3.51), CIMB (-2 sen to RM7.89), SIME (-2 sen to RM8.85) and BAT (-40 sen to RM48.00).

Winners were GENTING (+14 sen to RM10.52), DIGI (+14 sen to RM24.60), YTL (+6 sen to RM7.85), PLUS (+2 sen to RM4.40) and PPB (+6 sen to RM18.40).

The Finance Index lost 0.26% to 13390.35 points, the Properties Index climbed 0.33% to 965.19 points and the Plantation Index eased 0.26% to 7393.83 points. The market traded within a range of 13.47 points between an intra-day high of 1490.03 and a low of 1476.56 during the session.

Singapore share prices ended 0.4% weaker on Wednesday as investors booked profits after a surprise interest rate hike by Chinese regulators overnight raised concerns about the Asian economic growth story.

Straits Times Index (STI) closed 13.14 points lower at 3,179.15. In the broader market, losers outpaced gainers 309 to 214. Overall volume traded was 1.90 billion shares worth S$2.10 billion.

Shayne Heffernan of Ebeling Heffernan Strong Buy, Sembcorp Marine gained 1.8% to close at S$4.64 after announcing a large order win earlier this week.

Sembcorp Marine said on Monday its unit secured US$384 million worth of orders from SeaDrill, with an option that could lift the total value of the deal to US$1 billion.

Commodity stocks were pulled down by the prospects of easing growth in China, the world’s fastest growing consumer of most raw materials.

Golden Agri-Resources snapped a five-day gaining streak, falling 2.2% to S$0.67. Olam International closed 2.2% lower at S$3.17, Noble Group lost 1.5% to S$1.91 while Wilmar International shed 0.2% to S$6.28.

Bank stocks also lost ground. United Overseas Bank closed 1.7% lower at S$18.58, DBS Group dropped 1.6% to S$14.48 while Oversea-Chinese Banking Corp shed 1.1% to S$9.10.

Neptune Orient Lines, which Tuesday evening reported US$282 million net profit in the third quarter against a US$139 million loss in the year earlier period, gained 3.4% to close at S$2.13.

Temasek owns stakes in the world’s two biggest oil-rig makers, Singapore’s Keppel Corp. and SembCorp Marine Ltd. via SembCorp Industries Ltd., and has invested more than $2 billion on energy and resources assets from the U.S. to India in the past year.

Today, Temasek Holdings Pte, Singapore’s state investment company, paid $400 million for a 14.3 percent stake in the oil services unit of Brazil’s Odebrecht SA as it increases its focus on emerging markets.

The investment in Rio de Janeiro-based Odebrecht Oil & Gas comes after Temasek opened offices in Mexico City and Sao Paulo about two years ago. The company also has investments in Brazilian real estate and retail companies.

Odebrecht Oil & Gas will spend $3.5 billion over the next three years and may sell shares in an initial public offering to finance future projects, Chief Executive Officer Miguel Gradin said at an event in Rio de Janeiro yesterday.

“For our next projects we will need project financing,” Gradin said. “It could be a mix of debt and equity.”

Temasek, whose assets climbed 43 percent to S$186 billion ($142 billion) as of March 31 from a year earlier, has transformed itself from a passive holder of stakes in state- owned companies such as Singapore Telecommunications Ltd. and Singapore Airlines Ltd. to an investor with more than two-thirds of its underlying assets abroad.

The value of Temasek’s investments in resources firms rose to S$11.2 billion as of March 31, or 6 percent of its total portfolio, from S$6.5 billion, or 5 percent, according to its annual report.

The owner of five of Singapore’s 10 largest companies by market value has invested $500 million of convertible preferred shares of Oklahoma City-based Chesapeake Energy Corp., the third-largest U.S. natural-gas producer. Other investments were made into companies including Platmin Ltd., SouthGobi Energy Resources Ltd. and GMR Energy Ltd.

In Jakarta, the Jakarta Composite Index lost ground on Wednesday, falling 13.83 points, or 0.4 percent, to 3,578.95, as property and commodities stocks declined.

Some 13.7 billion shares worth Rp 6.46 trillion ($725 million) changed hands. Decliners outnumber gainers with 132 to 82.

Saiful Adrian, an analyst at Ciptadana Securities, said the market was due for a pullback, and the Chinese rate rise supplied the catalyst.

China’s central bank surprised on Tuesday with its first interest rate hikes in nearly three years, a move that reflects its concern about rising domestic asset prices and inflation.

It raised benchmark one-year deposit and lending rates by 25 basis points each.

Bakrieland Development, Indonesia’s second-biggest property developer by assets, plunged 9 percent.

Its shareholders plan to sell a 6.6 percent stake for an estimated Rp 463.7 billion through a private placement, Investor Daily Indonesia reported.

Developer Bumi Serpong Damai tumbled 16 percent, its sharpest drop since Feb. 25.

The company plans to raise Rp 5 trillion in a December rights issue to buy stakes in three companies, including in rival Duta Pertiwi.

The rupiah declined 0.1 percent to 8,938 to the dollar as of the stock market’s close.

It earlier touched 8,953, its weakest level since Oct. 5.

Separately, Finance Minister Agus Martowardojo said measures requiring investors to hold central bank debt for at least 28 days were enough in terms of managing surging capital inflows.

The comments come after other emerging market nations such as Brazil and Thailand imposed measures to try to curb strong inflows that are pushing up their currencies.

“We know there are surging capital inflows but there is no worry of a sudden reversal.

Bank Indonesia has a policy to hold SBIs for at least one month. We think this is enough for now,” Agus said.

The Stock Exchange of Thailand (SET) composite index on Monday dropped 1.16 points or 0.12 per cent to close at 988.11 points. The market value was 26.61 billion baht, with 2.68 billion shares traded.

Forth Corporation Plc, the SET-listed manufacturer of electrical circuits and telecom equipment, aims to place its online top-up machines in international markets after installing 10,000 points locally by the end of this year.

Its subsidiary, Forth Smart Service (FSS), is now preparing to export its Boonterm online top-up machines to many countries in Southeast Asia including the Philippines and Vietnam.

“We see high potential in a big mobile phone market like the Philippines. We are also negotiating with companies in Indonesia, Cambodia, and Malaysia as well,” said Pongchai Amatanont, Forth’s managing director.

The first overseas Boonterm online top-up machines will be installed in the Philippines in December, followed by Vietnam next year.

The machines support top-up services for five mobile operators. They also act as a pay point for online gaming, electricity bills and credit cards.

Since the launch of the first machine in mid-2009, more than 5,000 have now been installed nationwide. FSS expects to have at least 10,000 machines by year-end and 25,000 by October 2012 as the company is confident in high growth in the domestic market.

CRC Power Retail Co, the operator of the HomeWorks and Thai Watsadu hardware and construction materials chains, plans to spend 8 billion baht to double its sales and outlets over the next three to four years.

President Suthisarn Chirathivat said the company would start speeding up expansion next year with the opening of three to four new outlets, compared to only one outlet a year in the past, because the market was becoming more competitive every year. Therefore, it wants its business to reach an economy of scale as fast as possible.

The company now has bine outlets of HomeWorks and Thai Watsadu and the number will double to 18 over the next three to four years while total sales would also double to 7 billion baht.

“We want to have a total of 80 stores for HomeWorks and Thai Watsadu in the long term, the same as our competitor HomePro has,” he said. “We are ready for new experiences in this market and we look to expanding our stores in other countries in the future.”

There is huge potential for CRC Power Retail to expand its business. According to Kasikorn Research Center, the market growth of the construction materials business will continue in both Bangkok and upcountry. The market worth 307 billion baht has averaged 20% annual growth over the past five years.

Top five most active values were as follows;

PTT closed at 307.00 baht, down by 3.00 or 0.97 per cent.

BANPU closed at 746.00 baht, up by 2.00 or 0.27 per cent.

IVL closed at 38.50 baht, up by 2.50 or 6.94 per cent.

STA closed at 31.00 baht, up by 0.75 or 2.48 per cent.

TASCO closed at 77.50 baht, up by 1.50 or 1.97 per cent.


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