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ASEAN STOCK WATCH 7  October  2010

ASEAN Markets Continue Rally

Shayne Heffernan

Another slow night on Wall St will not have to much impact in ASEAN today, the markets here are in Rally mode. Thailand looks set to break 1000 next week and others sit at all time highs.

Best Buys today are Banpu, IVL, Bumi, NEPS, GENTING, Timah, PTT, COSCO

Shares of NOL rose as much as 4.4 percent to a two-month high on expectations that more stimulus measures may give the global economy a boost and spur international trade.

Singapore shares rose 0.66 percent on Wednesday to a 28-month high, led by gains in shipping firm NOL (NEPS) on hopes that fresh state-backed stimulus measures may be initiated to bolster the global economy.

Shares of Sembcorp Marine (SCMN), the world’s second-largest oil-rig builder, rose 4.1 percent to S$4.29 after it secured a $364 million contract to build two jack-up rigs.

Singapore-listed shipbuilder Cosco Corp (COSC) also outperformed the market, rising by as much as 3.2 percent to S$1.91 after a broker upgraded it to “buy”.

In Kuala Lumpur the Bursa Malaysia rose 0.50% to close at 1479.61 points on brisk buying in selected heavyweights and lower liners. The market traded within a range of 7.20 points between an intra-day high of 1483.25 and a low of 1476.05 during the session.


Trading volume declined to 954.74 mil shares worth RM1657.03 mil as compared to Tuesday’s 985.74 mil shares worth RM1505.40 mil.

Winners GENTING (+16 sen to RM10.20), TNB (+10 sen to RM8.94), AXIATA (+5 sen to RM4.48), SIME (+6 sen to RM8.56) and MAYBANK (+4 sen to RM8.98).

Losers CIMB (-4 sen to RM8.13), GAMUDA (-4 sen to RM3.83), MMC (-2 sen to RM3.13) and MAS (-1 sen to RM2.35). Market breadth was positive with 443 gainers as compared to 330 losers.

The Finance Index added 0.25% to 13488.65 points, the Properties Index climbed 0.36% to 929.42 points and the Plantation Index rose 0.85% to 6905.87 points.

In Manila the Philippine Stock Exchange index added 25.03 points, or 0.6 percent, to close at 4,196.73.

The day’s upswing was across all counters, but the mining/oil and services sub-indices benefited the most, rising by 2.72 percent and 1.19 percent, respectively.

There were 77 advancers as against 63 decliners while 45 stocks were unchanged. Value turnover amounted to P6 billion.

Winners were Metro Pacific Investments Corp., Energy Development Corp., Megaworld Corp., Alliance Global Group Inc., Philex Mining Corp., Filinvest Land Inc., First Gen Corp.,

Metropolitan Bank & Trust Co., Philippine Long Distance Telephone Co., Banco de Oro Unibank Inc., DMCI Holdings Inc., Rizal Commercial Banking Corp., Lepanto Consolidated Mining Co. “A,” Aboitiz Power Corp. and Semirara Mining Corp.

Losers were SM Investments Corp., Atlas Consolidated Mining & Development Corp., Ayala Land Inc., International Container Terminal Services Inc. and Bank of the Philippine Islands.

In Jakarta Composite Index rose 11.71 points, or 0.3 percent, to 3,603.40, its ninth-straight record close. Volume was heavy, with 9.6 billion shares worth Rp 8.83 trillion ($989 million) traded.

Decliners outnumbered gainers 132 to 89.

Metals producers advanced as prices continued to rise.

Timah, the country’s biggest tin company, rose 3.2 percent and Aneka Tambang, a state-run gold and nickel producer, advanced 2 percent.

Tin futures increased 1.9 percent to $26,412 a metric ton in London, set to extend Tuesday’s record.

Gold for immediate delivery jumped to a record for a second day, rising 0.6 percent to $1,348 an ounce in London.

Lippo Karawaci, the country’s biggest property developer, gained 4.6 percent on Wednesday, a day after soaring 8.3 percent on news that it would sell some of its malls, hospitals and hotels to raise capital in order to triple its assets by 2015.

Meanwhile, the rupiah gained 0.2 percent to 8,923 against the dollar as of the market’s close on Wednesday, contributing to this year’s 5.2 percent advance.

Analysts said the rupiah rally was triggered by unceasing demand for high-yielding assets in light of near-zero interest rates in Japan and the United States.

Bank Indonesia on Tuesday kept its benchmark rate at 6.5 percent for a 14th-straight month, while the Bank of Japan effectively lowered its policy rate to zero and pledged to buy up to $60 billion of assets.

The US Federal Reserve’s key rate is zero to 0.25 percent, and Chairman Ben S. Bernanke said on Monday that a first round of asset purchases had lifted the economy and further buying would likely help more.

“The American economy is still weak and the spread between the BI rate and the Fed funds rate is still wide,” said Rully Nova, a currency analyst at Bank Himpunan Saudara.

“That’s supporting a stronger rupiah.”

However, further gains in the rupiah could be limited if the central bank began selling the currency for dollars to counter the appreciation that was putting exports at risk, he added.

The nation’s foreign-exchange reserves climbed $5.2 billion last month to a record $86.55 billion, the biggest increase since April, the central bank reported on Wednesday.

“Bank Indonesia will intervene in the rupiah so it won’t quickly move below 8,900,” Rully said.

Foreign holdings of local-currency government bonds climbed by Rp 78.8 trillion this year to Rp 186.8 trillion as of Oct. 5, figures from the Ministry of Finance showed.

Overseas funds have pumped a net $2.4 billion into Indonesian shares this year, according to exchange data.

The Stock Exchange of Thailand (SET) composite index gained 9.72 points or 1.00 per cent to close at 979.00 points on Wednesday. The trade value was 38.15 billion baht.

Foreign central banks are beginning to compete each other to devalue currencies but the situation should not lead to a currency war as many predicted, Bank of Thailand assistant governor Suchada Kirakul said on Wednesday.

The baht continued to strengthen, trading at 29.95/97 baht to the US dollar this morning. The baht’s value was the strongest in 13 years.

Mrs Suchada said it was not unusual that the Thai currency appreciated to below 30 baht per US dollar this morning as the export sector had expanded 20 per cent due to the country’s strong economic fundamentals.

Foreign capital inflows continued entering the country despite the political instability. The world’s liquidity remained high, she said.

“The baht has been getting stronger in the past three years but exports have been growing continually as well. Although the baht’s value will determine the export situation, the key factor is the economies of our trading partners,” the assistant governor said.

The Singaporean dollar was now close to its value in 1987. Singapore was using the basket of currencies exchange rate system but the country allowed its currency to strengthen, she added.

Thai Airways International has agreed to award a contract worth 6 billion baht to Rolls-Royce to provide engines, maintenance services and spare parts for its new fleet of Airbus wide-body jets.

The deal with the British company is the largest in a series of contracts worth 7.83 billion baht for components for the seven twin-engine A330-300 aircraft.

Rolls-Royce outbid US rivals GE and Pratt & Whitney, according to sources with knowledge of the selection. The British company currently has about 120 engines in THAI jets, similar to the number supplied by GE.

The THAI board approved the Rolls-Royce contract on Sept 24 and the deal is expected to be formalised in November.

The contract includes the supply of 14 units of Trent 772 B engines worth about 2.74 billion baht, two spare units with engine stands (744 million), tools (32 million) and a 10-year service contract (2.35 billion baht).

Sources said THAI chose Rolls-Royce because of engine commonality with existing A330-300s in service. Trent 772 B engines power 54% of the world’s fleet of A330-300s.

Top five most active values were as follows;

PTTEP closed at 170.00 baht, up 10.00 baht or 6.25 per cent.

PTT closed at 302.00 baht, up 5.00 baht or 1.68 per cent.

BANPU closed at 742.00 baht, up 20.00 baht or 2.77 per cent.

KTB closed at 17.20 baht, up 0.10 baht or 0.58 per cent.

KBANK closed at 118.50 baht, up 2.50 baht or 2.16 per cent.


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