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ASEAN STOCK WATCH 30  October  2010

ASEAN Markets Weekly Summary

Shayne Heffernan

Another strong week on the ASEAN markets as we see more and more overseas investors coming to the region. A trend unlikely to stop in the near future. Come back to this site on Sunday to see our outlook for the week ahead.

The Stock Exchange of Thailand (SET) composite index went down 3.27 points or 0.33% to close at 983.96 points at the end of trading session on Friday morning. The trade value was 15.14 billion baht.

The Bank of Thailand expects the strong baht and widespread flooding to have a minimal impact on the economy in 2011, while the Finance Ministry has forecast 7.3% growth in GDP this year after taking into account those factors.

Paiboon Kittisrikangwan, assistant governor for the Monetary Policy Group, said local exporters had been able to cope with the baht’s gains by taking steps to protect against loss. The hedging ratio increased to 43% of total income in September from 35% in August.

“Slowing advanced economies, rather than the strengthening baht, would be the key factor for a decline in export growth into 2011,” said Mr Paiboon.

He said local business operators had also increasingly shifted settlement currency to other currencies as the dollar weakened. They also shortened the maturity of orders to three months or shorter from the typical six months.

“That some shippers are capable of bargaining for a better price and are expanding capacity helped to compensate for the impact of currency exchange loss on the overall economy,” he said.

“We believe exports are capable of growth in 2011. A strengthening currency is a regional phenomenon.”

Kasikornbank research unit forecasts the Thai baht will reach 28 baht per US dollar next year and keep rising to hit 25 baht within two years.

Wiwan Tharahirunchote, executive chairman of the research unit, said the baht will keep rising next year in line with the weakening dollar, foreign capital inflows and the country’s trade surplus.

The baht has appreciated by 10.3 per cent to 29.95 to the dollar for the year to date, the second highest among Asian currencies behind the yen.

“It is possible to see the baht touch 25 baht to the dollar, but it will probably take a year or two. Exporters should set their prices to offset a currency gain of 10 per cent from the actual exchange rate,” said Mrs Wiwan.

KBank forecasts Thai GDP growth between 3.5 per cent and 4.5 per cent next year as the world recovery is still wobbly, meaning exports will grow only 9-10 per cent after this year’s 24.5 per cent expansion. In 2011, it predicts the trade surplus will fall to between $4.5 and $7.6 billion, below this year’s $10 billion, while the trade account balance is estimated at $5.5 billion to 8.6 billion from this year’s $9.8 billion.

Foreign investment is expected to grow by 7.5 per cent to 9 per cent next year, down from 10.2 per cent. Inflation is expected to expand to 2.5 per cent to 4 per cent next year following this year’s estimate of 3.4 per cent, which may rise to 3.5 per cent due to the floods.

Top five most active values were as follows;

BANPU closed at 772.00 baht, down 12.00 baht (1.53%)

PTTCH closed at 142.00 baht, down 2.50 baht (1.73%)

PTL closed at 32.00 baht, up 2.75 baht (9.40%)

TCAP closed at 40.25 baht, up 1.50 baht (3.871%)

PTT closed at 302.00 baht, unchanged

In Singapore the Straits Times Index ended 0.4% or 13.12 points higher at 3,142.62 as investors continued to buy bargain stocks after the market fell earlier this week.

Markets fell sharply earlier this week on lingering doubts about the size and timing of any more quantitative easing by the US Federal Reserve.

Ebeling Heffernan Strong Buys Issued by Shayne Heffernan early in the week traded well to close higher.

Rig builders, which weakened earlier this week, ended firmer. Keppel Corp rose 3.0% to S$9.98 and SembCorp Marine ended 1.3% higher at S$4.60.

Similarly, Olam International clawed back some of its losses, rising 2.0% to S$3.13.

United Overseas Bank fell 0.4% to S$18.64 although the lender reported a better-than-expected 38% rise in its net profit.

Singapore Exchange, which earlier this week launched a takeover for Australia’s ASX Ltd, fell 0.9% to S$8.80.

Losers overtook gainers 243 to 224. Overall volume traded was 1.78 billion shares worth S$2.16b.

In Jakarta the Index was flat lower by 3.5 points, or 0.1 percent, to close at 3,635.32. About 4.8 billion shares worth Rp 3.7 trillion ($418.6 million) changed hands. Decliners outnumbered gainers 126 to 90.

Adaro Energy, the nation’s second-biggest coal producer, declined 1.2 percent. The company reported that net income for the first nine months of the year dropped 51.5 percent to $190 million, Reuters reported.

Bank Rakyat Indonesia, the country’s second-largest bank by assets, advanced 0.9 percent. BRI’s nine-month net income climbed to Rp 6.66 trillion ($746 million) from Rp 5.3 trillion a year ago, the lender said.

Charoen Pokphand Indonesia, the nation’s biggest chicken feed producer, rose 3 percent to Rp 8,550, its highest close since Sept. 30. The company said nine-month net income jumped 50 percent to Rp 1.6 trillion.

Property developer Cowell Development jumped 11 percent after reporting that nine-month net income rose more than sevenfold to Rp 11.8 billion from a year earlier.

State-owned Telekomunikasi Indonesia, the nation’s largest telephone company, retreated 1.6 percent. The company said on Friday that nine-month net income declined to Rp 8.93 trillion from Rp 9.3 trillion a year earlier.

Meanwhile, the rupiah was unchanged as of the stock market’s close, trading at 8,938 against the dollar, after Bank Indonesia signaled this week it would limit appreciation that could hurt exporters.

The rupiah slipped 0.3 percent in October, but has advanced 5.1 percent this year. It was little changed on the week.

Bank Indonesia said on Wednesday that it would “guard” the rupiah at 8,900 to 9,300 against the dollar.

In Manila the Philippine Stock Exchange index added 8.05 points or 0.19 percent to finish at 4,268.74.

The market opened with sluggish sentiment following a lackluster session on Wall Street but a late surge in risk appetite paved the way for a positive close.

There were 73 advancers as against 61 decliners and 43 unchanged stocks.

Newly listed Cebu Air Inc. continued to succumb to profit-taking, closing 0.48 percent lower to P124.50, falling below its P125 initial public offering price for the first time since its listing on Tuesday.

It was the day’s most actively traded stock, followed by Philippine Long Distance Telephone Co., which likewise traded in the red.

Alliance Global Group Inc. led the day’s gainers as its gaming joint venture with the Genting Group of Malaysia announced a successful $300-million bond deal.

Megaworld Corp., led by tycoon Andrew Tan, was likewise up.

Other Winners for the day were Metropolitan Bank & Trust Co., SM Investments Corp., Metro Pacific Investments Corp., Banco de Oro Unibank Inc., Universal Robina Corp., DMCI Hldings Inc., Bank of the Philippine Islands, International Container Terminal Services Inc., Philex Mining Corp. and JG Summit Holdings Inc.

DMCI and JG Summit, along with First Gen Corp., is set to join the 30-company stock barometer PSEi effective November 8.

The Losers, Ayala Corp., Atlas Consolidated Mining & Development Corp., SM Prime Holdings Inc. and Aboitiz Power Corp.

In Kuala Lumpur the Bursa Malaysia rose 0.41% to close at 1505.66 points on Friday after trading in the negative territory in the morning session.


The Winners were CIMB (+10 sen to RM8.29), AXIATA (+7 sen to RM4.49), GENTING (+16 sen to RM10.44), GENM (+10 sen to RM3.50) and MISC (+11 sen to RM8.78).

The Losers were TNB (-7 sen to RM8.80), PUBLIC BANK (-4 sen to RM12.72), IOI (-1 sen to RM5.82), SIME (-1 sen to RM8.83) and MAS (-3 sen to RM2.20). Market breadth was positive with 436 gainers as compared to 380 losers.

The Finance Index added 0.54% to 13719.42 points, the Properties Index climbed 0.66% to 987.77 points and the Plantation Index fell 0.04% to 7585.57 points. The market traded within a range of 7.94 points between an intra-day high of 1505.66 and a low of 1497.72 during the session.

Trading volume increased to 1462.58 mil shares worth RM2342.71 mil as compared to Thursday’s 1137.31 mil shares worth RM1634.77 mil.


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