ASEAN KEY DESTINATIONS
Asean Stock Watch- October 21
The Dow Jones Industrial Average gained 37.16 points, or 0.32 percent, to close at 11,541.78, overnight.
The S&P 500 edged up 5.51 points, or 0.46 percent, to close at 1,215.39, while the Nasdaq composite fell 5.42 points, or 0.21 percent at 2,598.62.
Gold closed at US$1,615 an ounce, while the crude oil price was: $85.30 a barrel
Midday gains fell by the wayside on Thursday as the Indonesian market closed lower amid worries over the Greece bailout.
The Jakarta Composite Index lost 62.53 points, or 1.7 percent, to close at 3,622.78. More than 4.12 billion shares worth Rp 3.35 trillion ($378.5 million) changed hands as decliners topped gainers 194 to 39. Foreign investors sold Rp 193 billion more in shares than they bought.
Analysts said an impasse between France and Germany over how to rescue Greece were partly to blame to the lackluster trading in the local market.
Janson Nasrial, an analyst at AmCapital Indonesia, said all eyes were still on the euro zone’s inability to agree on how to implement the European Financial Stability Facility.
“It doesn’t matter how stable your economy is, global markets are still very much affected by the euro zone crisis,” he said.
France has proposed increasing the EFSF to about 2 trillion euros ($2.8 trillion) and wants it to act as a bank while being funded by the European Central Bank. Germany does not want the ECB to be a backstop for the policy.
In local trading, Indo Tambangraya Megah, the Indonesian coal mining unit of Thailand’s Banpu, lost 3.9 percent to Rp 40,600. Bayan Resources, another coal producer, dropped 1.8 percent to Rp 19,300. The mining sector lost 2.9 percent on expectations of lower demand from Europe.
Astra Agro Lestari, Indonesia’s largest listed palm oil producer, fell 2.8 percent to Rp 19,050 while rival London Sumatra Indonesia lost 3.6 percent to Rp 2,000. Crude palm oil futures for January delivery lost 0.6 percent on Bursa Malaysia on Thursday as the agribusiness sector in Jakarta was down 1.9 percent.
Bank Central Asia, the country’s biggest lender by market value, lost 2.6 percent to Rp 7,650. Bank Mandiri, Indonesia’s largest bank by assets, fell 3 percent to Rp 6,400. Investor Daily reported on Thursday that the new state enterprises minister planned to cut the dividends distributed by state-owned banks like Mandiri.
The rupiah strengthened 0.2 percent to 8,840 against the dollar on Thursday.
A string of stocks managed to attract investor interest in an otherwise cautious Thursday market and they included glove counters, property firm UOA Development Bhd and hard-disk drive maker JCY International Bhd.
Analysts said the price of latex touched RM8 per kg yesterday, off its recent high of RM11 per kg in April, signalling a possible downtrend in the price of the commodity.
Latex makes up more than 60 percent of glove makers' costs and a decline in its price is welcome news for the industry.
At the close, counters like Supermax Corp Bhd and Adventa Bhd were up 27 sen and 13 sen to RM3.22 and RM1.67 respectively.
In the case of Latexx Partners Bhd, news of a possible takeover could also have been a catalyst.
Latexx, which rose 14 sen to RM1.63, has been speculated to be the subject of a takeover for a few weeks now after a first attempt in May failed due to issues related to pricing.
Meanwhile, dealers attributed interest in UOA Development, which reached a multi-month high of RM1.70 after rising 19 sen, to “pure market play”.
The stock, at this level, is still 35 percent down on its June initial public offering (IPO) price of RM2.60.
CIMB Research said in a report that UOA Development's poor share price performance since its listing gave investors a chance to accumulate the stock, adding that investors' realisation of the strong core earnings growth for 2011 to 2013 could spark a re-rating, along with robust sales or more land-banking activities.
Hard-disk driver maker JCY was also on the active list yesterday, finishing one sen lower at 57 sen after hitting an intra-day high of 61 sen. JCY gave up its gains after CIMB Research issued a “trading sell” call on it, seeing that the stock had hit the house's target price.
On Wednesday, the stock put on 28% due to expectations that it would receive more orders as the floods in Thailand affected its competitors.
Sentiment remained cautious in the broader market with 232 counters finishing higher while 500 ended lower.
The 30-stock FTSE Bursa Malaysia KL Composite Index was down 9.07 points, or 0.63%, to 1,441.18 at the close, with most investors still feeling nervous about the uncertainties in the debt-laden West.
Concerns over slower growth in economic powerhouse China also continued to weigh on investor sentiment, analysts said.
Philippine share prices and the peso fell on Thursday amid a split among European officials on the bailout plan ahead of a crucial summit scheduled this weekend.
At the Philippine Stock Exchange, the composite index fell 22.98 points, or 0.55 percent to 4,170.57, while the broader all-shares index lost 12.92 points, or 0.44 percent to 2,935.63.
Decliners beat advancers, 96 to 44, while 34 stocks were unchanged. A total of 5.13 billion stocks worth P2.60 billion changed hands.
“After rising by less than six points at the opening, the PSEI plunged into negative territory as the outlook for the Sunday EU crisis summit faded towards pessimism,” Jun Calaycay of Accord Capital Equities Corp. said.
Although European markets edged higher, Calaycay said the outlook dimmed in after hour trades as Germany and France continued to wrangle on the details of the European Financial Stability Facility.
Reports came out saying that Germany and France were in a deadlock on how to expand the emergency fund during a meeting held in preparation for a summit scheduled this weekend.
Joining Germany and France in the meeting were the International Monetary Fund and the European Central Bank.
Overnight, the Dow Jones Industrial Average lost 72.43 points, or 0.63 percent to 11,504.62 after the Federal Reserve issued a gloomy assessment of the US economy.
Tokyo closed 1.03 percent, or 90.39 points, lower at 8,682.15, Sydney fell 1.63 percent, or 68.8 points, to 4,144.9 and Seoul closed 2.74 percent down, or 50.83 points, at 1,805.09.
Hong Kong closed 1.78 percent, or 326.12 points, down at 17,983.10 and Shanghai lost 1.94 percent, or 46.14 points, to 2,331.37.
Many investors have stayed away from the markets, unsure about the future of the eurozone because of what they consider weak leadership.
“Generally markets are still pretty nervous about Europe,” Justin Rooney, CBA Institutional Equities head of sales in Sydney, said.
And Auckland-based HiFX senior trader Stuart Ive warned: “Ultimately, I think the market is going to end up being pretty disappointed with whatever they put together” at the summit.
“They will come through with something but it’s not going to be what the market is looking for. It certainly won’t be a solution to the whole thing and we will get risk aversion coming back,” he told Dow Jones Newswires.
At the Philippine Dealing System, the peso closed at 43.320, down 16.5 centavos from 43.155 the previous day.
The dollar-peso currency pair opened at 43.230 and moved to a high of 43.360 and a low of 43.190.
Total trading volume eased to $886.070 million from $916.790 million.
Singapore shares opened higher on Friday, with the benchmark Straits Times Index at 2,699.23 in early trade, up 0.19 percent, or 5.22 points.
Around 62.6 million shares exchanged hands.
Gainers beat losers 58 to 46.
Thai shares fell 3.03% on Thursday as fears mounted about flooding in Bangkok, with analysts saying the the SET index would fall below 900 points if inundation in the capital became critical.
The SET index closed at 909.10 points down 29.09 points, in thin trade worth 21.71 billion baht.
Ronnakrit Sarinwong, vice-president of Country Group Securities, said that apart from floods, uncertainties about Europe's ability to resolve its public debt crisis continued to pressure investment sentiment.
"The market has been disappointed that the upcoming EU Summit on Sunday will fail to bring good news, while the domestic floods crisis will have significant effects on Thailand's GDP," he said.
Shares rallied Thursday on the HCM Stock Exchange after falling over three consecutive days, but both market volume and value remained sluggish on pessimistic investor sentiment.
The VN-Index closed at 403.73 points, a rise of 0.64 percent over yesterday. Trading volume decreased 23 percent to just 18.6 million shares, but value of today's trades rose nearly 5 percent to VND413.5 billion (US$19.7 million).
Gainers edged losers by 109-90.
Several blue chips recovered. Among the 10 largest shares led by market capitalisation, food processor Masan Group (MSN) hit the ceiling price, while dairy producer Vinamilk (VNM), Vietinbank (CTG) and Phu My Fertiliser (DPM) all gained by less than 1 percent. Others fell or closed unchanged.
No codes saw trade in excess of 1 million shares. Becamex Infrastructure Development (IJC), with nearly 750,000 shares changing hands, became the most active code on the HCM City bourse today, but it declined another 2.1 percent to close at VND9,400 ($0.45).
Meanwhile, shares retreated on the Ha Noi Stock Exchange, with the HNX-Index losing 0.31 percent over yesterday to close at 67.72.
Decliners inched up advancers by 116-107.
Both market volume and value fell 25 percent, totaling just 19 million shares, worth VND193.6 billion ($9.2 million).
Kim Long Securities Co (KLS) remained the most heavily-traded stock nationwide with 1.86 million shares changing hands, closing unchanged at VND10,100 ($0.48).
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