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||Asean Affairs 31 October 2011
Asean Stock Watch- October 31
Stocks closed out a fourth week of gains in quiet fashion on Friday, edging higher as the market took a breather after rallying 3 percent on Europe's deal to stem its debt crisis.
Though investors still have questions about implementing the deal, they appeared satisfied by Europe's progress as stocks ended their longest weekly winning streak of the year.
The S&P 500 rose 3.7 percent for the week. The benchmark index had a seven-week rally that ended in January, but only two of the weeks were in 2011.
October also was on track to be the best month for stocks since 1974, supported by strong earnings. Merck & Co Inc (NYSE:MRK - News) and Chevron Corp (NYSE:CVX - News) both topped expectations with financial results on Friday.
With risks haunting the commodities sector and a telecommunications market that faces saturation, domestic-market oriented companies — especially in property and consumer goods — are now emerging as star performers.
“As long as a stock is domestic-market oriented and does not have a high exposure to foreign loans, growth will be positive,” said Ahmad Nurcahyadi, an analyst at BNI Securities.
Stefanus Susanto, director of UOB Kay Hian Securities, said the strong performance of the property sector is due to wider economic growth. “Higher incomes make people want to buy properties,” he said.
Strong nine-month earnings were noticeable at four major property developers.
Lippo Karawaci, the largest listed property company, Bakrieland Development, the second-largest listed, Agung Podomoro, an integrated property developer and Summarecon Agung, which owns Mal Kelapa Gading, all reported solid growth.
Lippo Karawaci said all business divisions reported satisfactory growth in the first nine months, with an exceptionally good performance from its residential and township business division. There, revenues were up 42 percent to Rp 1.42 trillion ($162 million).
“The fourth quarter looks promising and we anticipate continued progress in the buildup of our hospitals and mall activities,” Lippo Karawaci’s president director Ketut Budi Wijaya said.
Lippo Karawaci and the Jakarta Globe are affiliated with Lippo Group.
Commodities-related companies were performing well in the first three quarters of the year, despite analysts worrying about their future performance.
The sector is seen as vulnerable to fluctuations in global commodity prices.
However, at Astra Agro Lestari, the nation’s largest listed plantation firm, as well as heavy equipment distributor Intraco Penta, profits have grown more than 50 percent so far this year.
Petrus Halim, president director of Intraco, attributed his company’s 51 percent growth in nine-month net profit to Rp 68 billion to strong demand for heavy equipment from the mining sector.
Less stellar performance was seen in the telecommunications sector, where tough competition has significantly thinned margins.
At Telekomunikasi Indonesia, the nation’s biggest telecom company, nine-month net income fell 6.7 percent from the same period in 2010.
The third-largest mobile phone operator in Indonesia, XL Axiata, posted a 5 percent increase in its nine-month net income to Rp 2.2 trillion.
Bursa Malaysia closed higher Friday in tandem with steady gains on regional markets, prompted by progress in Europe's debt plan and better growth of the US gross domestic product (GDP) for the third quarter period, dealers said.
The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 10.89 points or 0.74 percent to end at 1,481.82, lifted by gains in blue chip counters.
It had opened 9.29 points higher at 1,480.22.
In trading today, the benchmark index moved between 1,478.15 and 1,488.22.
The dealers said in line with extended gains on regional markets, the key index was also lifted by the positive mood on major US equity indices, which jumped overnight between 2.9 percent and 3.4 percent.
The Finance Index rose 129.26 points to 13,420.59, the Plantation Index added 2.22 points to 7,494.68 and the Industrial Index gained 13.32 points to 2,714.66.
The FBM Emas Index advanced 68.221 points to 10,117.36, the FBM70 Index was up 73.341 points to 10,959.65 and the FBMT100 jumped 71.641 points to 9,935.99, while the FBM Ace added 9.98 points to 4,072.95.
Gainers led losers by 470 to 338 while 319 counters were unchanged, 349 untraded and 25 others suspended.
Turnover stood at 1.877 billion shares worth RM2.295 billion from the 1.877 billion worth RM2.413 billion Thursday.
Of the active counters, Hubline gained half sen to 10 sen, GPRO Technologies added four sen to 23.5 sen, Time DotCom gained 1.5 sen to 64 sen, and Hirotako rose 6.5 sen to 94.5 sen.
For the heavyweights, Maybank increased six sen to RM8.35, CIMB advanced 18 sen to RM7.46, Sime Darby jumped five sen to RM8.90 and Petronas Chemicals rose 10 sen to RM6.41.
Volume on the Main Market increased 1.52 billion shares worth RM2.247 billion from the 1.51 billion shares worth RM2.36 billion on Thursday.
Turnover on the ACE market advanced 219.702 million units valued at RM35.35 million from 180.315 million units valued at RM26.378 million previously.
Warrants declined to 131.182 million shares worth 10.153 million from the 167.874 million shares worth RM12.257 million yesterday.
Consumer products accounted for 56.925 million shares traded on the Main Market, industrial products 470.711 million, construction 71.788 million, trade and services 421.723 million, technology 25.318 million, infrastructure 48.31 million, finance 188.436 million, hotels 2.078 million, properties 167.284 million, plantation 46.308 million, mining 113,000, REITs 2.13 million and closed/fund 101,900.
Philippine share prices may consolidate in the shortened-trading week following a spirited rally in the previous month when investors cheered the agreement to resolve Europe’s debt woes.
The 8 percent bounce from September to October put the Philippine Stock Exchange index at overbought levels in the short term, which may invite investors to book profits.
“From its recent low, the market has gained almost 17 percent in value, exposing it to profit-taking in the days ahead,” said SB Equities in a research note.
The financial problems in Europe have weighed on investor sentiment in the previous months.
In the last week of October, European finance ministers finally decided on a bailout plan for Greece. The European Union subsequently approved to recapitalize the region’s banks, triggering a rally in global markets.
“With the movement of some of the big index issues giving us a hint of correction soon, we could probably expect the same in this shortened week,” said Bonner Dytoc, senior instructor at Absolute Traders and Consulting Services Inc.
Dytoc said the index’s rise to 4,333.72 on Friday, although accompanied with very good volume, was not as bullish because “it seemed undecided if it wanted to move higher or not.”
“We need the index to surpass the all-time high at 4,563 and continue going higher to erase any bearish sentiment; otherwise, it’s time for us to take profits again,” Dytoc said.
Immediate support is at 4,250 with resistance at 4,400.
SB Equities advised investors to pick stocks with steady income stream in the next 12 months, which should provide comfort amid the continued volatile market environment.
They are power and utility stocks Energy Development Corp. and Manila Water Co., property firms with strong recurring income such as Ayala Land Inc. and Robinsons Land Corp., undervalued financial stocks such as Metropolitan Bank and Trust Co. and conglomerates below their net asset valuations with above market growth for 2012 which include Alliance Global Group Inc. and DMCI Holdings.
Singapore shares closed higher on Friday, with the benchmark Straits Times Index at 2,905.72, up 2.04 percent, or 58.15 points.
About 2.0 billion shares exchanged hands.
Gainers beat losers 335 to 181.
Thai composite stocks index (SET) closed on Friday at 973.18, up 13.01 points, or 1.35 percent amid32.68 billion baht turnover.
Blue chip SET-50 index was at 691.99, up 10.55 points, or 1.55 percent.
Top five active (value) stocks: PTTGC, PTT, SCB, IVL, TOP.
The VN-Index rose 1.76 percent to reach 422.07 points on the HCM Stock Exchange Friday.
Gainers outnumbered losers by 203-38, with nearly 90 stocks hitting their ceiling prices.
The value of trades doubled yesterday's level, totaling VND700.4 billion (US$33.4 million) on a volume of 41.4 million shares.
Of the 10 leading shares by capitalisation, insurer Bao Viet Holdings (BVH), PetroVietnam Finance (PVF) and property developer Hoang Anh Gia Lai (HAG) all increased by the daily limit of 5 percent. Four other blue chips also added 1.6-3.1 percent while Vietinbank (CTG) lost 1.6 percent.
Property trader Hoang Quan (HQC) was the most active stock with more than 2.5 million shares exchanged, followed by Refrigeration Electrical Engineering Corp (REE) with 1.8 million shares changing hands.
On the Ha Noi Stock Exchange, the HNX-Index climbed 3.2 percent, concluding at 69.94 points with the majority of stocks posting gains.
Market value jumped 2.5 times over yesterday's session to VND504.9 billion ($24 million) while trading volume reached 50.8 million shares.
Kim Long Securities Co (KLS) was the most active code nationwide with 4.73 million shares changing hands. Speculative shares of banks, securities and construction firms, and
especially PetroVietnam's subsidiaries on the northern bourse, rebounded, with many hitting their ceiling prices.