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ASEAN STOCK WATCH 28  October  2010

Mixed Day for ASEAN, Great Day for Buying

Shayne Heffernan

A great day to be buying ASEAN stock after an encouraging but lower night on Wall St. The Nasdaq led the market back after early losses and the news was better than expected on the earnings front.

The big problem is that Wall St has factored in $500b in QE-2 stimulus from the Fed and there is now some uncertainty about when that will happen, and if it will happen.

ASEAN markets are a great buy on the USA dips, discounts are on offer in quality companies through out the region.

The Dow Jones industrial average dropped 93.05 points, or 0.83 per cent, to 11,076.41. The Standard & Poor's 500 Index lost 7.96 points, or 0.67 per cent, to 1177.68. The Nasdaq Composite Index dipped 2.95 points, or 0.12 per cent, to 2494.34.

Declines were muted on the Nasdaq as Broadcom Inc jumped 9.6 per cent to $US40.79 a day after it unexpectedly forecast a potential rise in fourth-quarter revenue.

The Stock Exchange of Thailand (SET) composite index on Wednesday dropped 12.08 points or 1.21 per cent to close at 983.96 points.

The market value was 32.13 billion baht, with 4.82 billion shares traded.

The Thailand Hot List

PTTEP, PTTCH, PTT, IVL, Banpu, Jas are the stocks to be buying in Bangkok today after they suffered a sell off on market in yesterdays trading.

PTTCH closed at 145.50 baht, down by 4.00 or 2.68 per cent.

PTT closed at 300.00 baht, down by 5.00 or 1.64 per cent.

BANPU closed at 778.00 baht, down by 20.00 or 2.51 per cent.

IVL closed at 32.75 baht, down by 1.00 or 2.96 per cent.

JAS closed at 1.51 baht, up by 0.08 or 5.59 per cent.

DTAC reported a third-quarter net profit of 3.1 billion baht, up 88% year-on-year, driven by higher revenue and good operating cost control.

Revenues rose 13% to 18.4 billion baht, helped by sales of smartphones.

Nine-month net profit was 7.93 billion baht, a 78% increase from 4.46 billion in the same period last year.

For the first nine months of the year, the country’s second largest mobile operator said it generated 16.5 billion baht of operating free cash flow, just short of its target of 17 billion baht.

As a result of the strong cash flow, the board has recommended an interim dividend of 0.56 baht per share.

The prime minister said the country’s agricultural sector and domestic trade had been hit by natural disasters. It was necessary for the government to react to drought situations and the current heavy flooding more promptly, as they occurred so quickly.

Commenting on politics, he said there were still attempts by some groups of people to create unrest in the country.

“I can assure you that there will be a general election next year, because I don’t think the government will complete its term.

“I have made it clear that I would be willing to lose an election if it brings peace to the country.

It is better than winning an election that would lead to violence,” Mr Abhisit said.

As for Map Ta Phut industrial estate and 3G investment problems, he said they were related to politics and the constitution and the government must find ways to solve them.

In Singapore the market ended 1.2% lower on Wednesday on profit taking ahead of the US Federal Reserve’s key policy meeting, local investors remained skeptical about the extent of any additional stimulus support the central bank could provide.

The Straits Times Index (STI) closed 38.13 points lower at 3,124.38. In the broader market, losers outpaced gainers 385 to 113. Overall volume traded was 2.11 billion shares worth S$2.64 billion.

Among the losers, gaming firm Genting Singapore slumped 4.1% to S$2.13 making it a strong buy today according to Shayne Heffernan of Ebeling Heffernan.

China XinRen Aluminum, which made its Singapore debut, rose to S$0.635 from its initial price offer of S$0.55.

Ebeling Heffernan Strong Buy Singapore Exchange (SGX) leveled off as we suggested and began to rally closing up 1.4% to S$8.84 as investors took the opportunity to buy the stock, which had fallen 7 percent since it announced on Monday plans to buy the Australian Stock Exchange for US$8.3 billion.

In Jakarta the Exchange hit a new all time high in early trading, however, the JCI fell 29.64 points, or 0.8 percent, to close at 3,624.47 on the day.

About 5.96 billion shares worth Rp 4.4 trillion ($489.4 million) changed hands. Decliners outnumbered gainers 158 to 69.

Most Southeast Asian stock markets fell after a Wall Street Journal article suggested that the scale of the US Federal Reserve’s quantitative easing may be less than some in the market had expected.

Some investors in Jakarta opted to wait for the third-quarter earning reports before making any buy or sell decisions, analysts said.

The nation’s biggest lender, Bank Mandiri, fell 2.8 percent, snapping a four-day run to a three-week high on Tuesday on expectations of good quarterly results.

Indomobil Sukses Internasional, an automotive retailer, dropped 5.2 percent to Rp 7,250, the lowest close since Sept. 16.

The company said it planned to convert Rp 380 billion of debt it owed Tritunggal Intipermata into equity and would issue new shares to Tritunggal. The issue will dilute the stakes of existing shareholders.

Tambang Batubara Bukit Asam, Indonesia’s state-owned coal producer, slid 2 percent to Rp 19,600. It said nine-month net income declined 36 percent from a year earlier to Rp 1.4 trillion because of lower coal prices and higher transportation costs.

Tower Bersama Infrastructure, an Indonesian operator of telecoms towers, rose 5.2 percent to Rp 2,525, climbing for a second day after its trading debut.

The rupiah fell 0.3 percent to trade at 8,943 against the US dollar as the market closed, falling the most in six weeks after the central bank said the potential for further appreciation was limited.

In Manila, The Philippine Stock Exchange index closed 5.54 points or 0.13 percent higher at 4,285.07.

The day’s gains were led by the Banks, which rose by two percent on expectations of further monetary easing through bond-buying by the US Federal Reserve.

The holding firms, property, services and mining/oil counters, on the other hand, continued to trade in the red.

Despite the overall index gain, decliners outnumbered advancers 73-68 while 39 stocks were unchanged. Value turnover amounted to P5.5 billion.

Among the day’s advancers were Banco de Oro Unibank Inc., Metropolitan Bank & Trust Co., San Miguel Corp., Philippine National Bank, Bank of the Philippine Islands, Filinvest Land Inc. and Philex Mining Corp.

San Miguel, which hardly made it to the PSE’s actives list in the past, surged by 12 percent to P88.20 on news that former Government Service Insurance System chief Winston Garcia, who sits on the company’s board as an independent director, was gobbling up shares of the conglomerate.

On the other hand, the day’s most actively traded company was newly listed Cebu Air Inc., which succumbed to profit-taking after robust inaugural trading on Tuesday. Cebu Air’s share price fell 2 percent to P131 per share but it was still above its initial public offering price of P125.

Other companies that lost ground during the session were SM Investments Corp., Philippine Long Distance Telephone Co., First Philippine Holdings Corp., Aboitiz Power Corp., SM Prime Holdings Inc., Atlas Consolidated Mining & Development Corp., Alliance Global Group Inc., Megaworld Corp. and Jollibee Foods Corp.

In Kuala Lumpur the Bursa Malaysia KL Composite Index KLCI closed at 1,499.11, up 2.17 points from its previous close. The index had earlier risen to an intra-day high of 1,504 points.

In the top 30 stocks of the main index, there were 19 winners and 9 losers and 2 counters unchanged.

Banking stocks anchored Bursa Malaysia in positive territory, with Ebeling Heffernan strong buy CIMB Group up 7 sen to RM8.15 and AMMB up 12 sen to RM6.19.

Ebeling Heffernan strong buy climbed 34 sen to equal its previous high of RM25.

Regional stock markets slumped, with biggest loser Hong Kong’s Hang Seng index down 1.85% to 23,164 points, followed by Shanghai Composite Index 1.5% drop to 2,997 points.

Market breadth was negative, with 497 losing stocks outnumbering 328 risers, while 283 counters were flat. Volume was 1.17 bllion shares worth an estimated RM1.6bil.

In the top 30 stocks of the main index, there were 19 winners and 9 losers and 2 counters unchanged.


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