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ASEAN STOCK WATCH Asean Affairs  4 October 2012

ASEAN Equities Preview

By Shayne Heffernan Ph.D.

The three major U.S. stock indexes, which initially got a modest lift from the positive data, came off their highs by late afternoon trade on lingering concerns about the global economy. A gloomier outlook in China and Europe weighed on commodity prices and hit energy and materials shares.

The proportion of bullish U.S. investment advisors fell below 50 percent for the first time in five weeks, hitting 46.8 percent in the latest week versus 51 percent the previous week, according to a survey by Investors Intelligence on Wednesday.

Investors often see bullishness as a contrarian indicator, meaning that when bullishness is running high, the market may be due for a pullback. Investors Intelligence said a reading of 55 can often signal a market top.


CapitaLand Limited (CapitaLand) is pleased to announce that it has been accorded the prestigious Golden Circle Award as well as the Most Transparent Company Award (Real Estate) for the 12th consecutive year at the Securities Investors Association Singapore (SIAS) Investors' Choice Awards 2012. The Golden Circle Award is the highest honour accorded to the Overall Most Transparent Company across industry sectors.

CapitaLand Group won a total of five accolades at the event. This includes the Group's listed entity, CapitaMall Trust, winning the Singapore Corporate Governance Award (REITs) and a runner-up position in the Most Transparent Award (REITs & Business Trusts). Mr Wilson Tan, CEO of CapitaMall Trust Management Limited was among the eight winners of the inaugural Brendan Wood International - SIAS TopGun CEO Designation Award.

Mr Liew Mun Leong, President and CEO of CapitaLand Group, said: "We are honoured to be conferred the Golden Circle Award, as well as Most Transparent Company Award (Real Estate) in the SIAS Investors' Choice Awards for the 12th consecutive year. It is testament of our efforts in practising good corporate governance principles."

"At CapitaLand, we believe that good corporate governance principles are the bedrock of a trusted and respected organisation, and therefore we have been relentless in our efforts. In particular, we have found that transparency towards our stakeholders has helped us to meet our business needs for long-term sustainable growth as well as protect the interests of our shareholders and enhance shareholder value. Ensuring good corporate governance is part of the Group's greater commitment towards sustainability."

SIAS Investors' Choice Awards 2012:

Golden Circle Award (Overall Most Transparent Company)
CapitaLand Limited

Most Transparent Company Award (Real Estate)
CapitaLand Limited (winner)

Most Transparent Company Award (REITs & Business Trusts)
CapitaMall Trust (runner-up)

Singapore Corporate Governance Award (REITs)
CapitaMall Trust (winner)

Brendan Wood International - SIAS TopGun CEO Designation Award
Wilson Tan, CEO of CapitaMall Trust Management Limited

CapitaLand, including its listed entities CapitaMalls Asia, CapitaMall Trust, CapitaCommercial Trust, Ascott Residence Trust and CapitaRetail China Trust, is among the listed companies taking part in the pledge signing on the Statement of Support during the SIAS Corporate Governance Week. The pledge signing marks the Group's ongoing commitment in upholding and advancing good corporate governance standards and being accountable to its shareholders and the public.

About CapitaLand Limited

CapitaLand is one of Asia's largest real estate companies. Headquartered and listed in Singapore, the multi-local company's core businesses in real estate, hospitality and real estate financial services are focused in growth cities in Asia Pacific and Europe.

The company's real estate and hospitality portfolio, which includes homes, offices, shopping malls, serviced residences and mixed developments, spans more than 110 cities in over 20 countries. CapitaLand also leverages on its significant asset base, real estate domain knowledge, financial skills and extensive market network to develop real estate financial products and services in Singapore and the region.

The listed entities of the CapitaLand Group include Australand, CapitaMalls Asia, CapitaMall Trust, CapitaCommercial Trust, Ascott Residence Trust, CapitaRetail

Trust, CapitaMalls Malaysia Trust and Quill Capita Trust.


Thai Sugar Terminal Public Company Limited, together with its subsidiaries provides transfer and transport services for sugar and agricultural products. The company also involves in the land trading; and real estate development and construction of buildings for sale, rental, and hire purchase of residential, office, and commercial units.

In addition, it builds palm oil refineries; produces and distributes wheat flour; engages in the warehousing and loading of goods; produces, imports, and exports polypropylene bags, plastic fibers, plastic resins, and plastics; and provides security services. The company is based in Samutprakarn, Thailand.

According to the Consolidated - Audited financial statement for the first quarter of 2012, total net operating revenues increased with 63.33%, from THB 517,672 thousands to THB 845,531 thousands. Operating result increased from THB 70,485 thousands to THB 117,773 thousands which means 67.09% change.

The results of the period increased 108.13% reaching THB 79,011 thousands at the end of the period against THB 37,963 thousands last year.

Return on equity (Net income/Total equity) went from 4.36% to 7.71%, the Return On Asset (Net income / Total Asset) went from 1.90% to 3.20% and the Net Profit Margin (Net Income/Net Sales) went from 7.33% to 9.34% when compared to the same period of last year. The Debt to Equity Ratio (Total Liabilities/Equity) was 149.44% compared to 137.71% of last year. Finally, the Current Ratio (Current Assets/Current Liabilities) went from 0.99 to 1.02 when compared to the previous year.


Sime Darby’s share price was sharply lower at the end of the day yesterday as the diversified conglomerate lost 33 sen to RM9.41 per share.

The Malaysian multinational was the second top loser in the morning session with 19.573 million shares traded.

Its share price hovered between RM9.73 per share and RM9.24 per share.

MIDF Research analyst Nur Nadia Kamil said the lower share price partly reflected weakening crude palm oil (CPO) prices.

Investors are adopting a ‘hold’ position while waiting for the CPO to rebound, but the prices continue to slide,” she told Bernama.

Yesterday, CPO futures contracts on Bursa Malaysia Derivatives closed lower on selling pressures, while on the physical market, October South dropped RM160 to RM2,200 a tonne.

Sime Darby is Malaysia’s leading multinational conglomerate involved in six core sectors, with the plantation sector being one of the largest revenue generators for the company

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Bumi Resources, Indonesia’s largest coal miner by production volume, said it expects to conclude the sale of its non-core assets this year as part of its efforts to finance debt payments.

Dileep Srivastava, a director at Bumi Resources, said on Tuesday that the sale of its stake in coal mining company Fajar Bumi Sakti is “moving forward” at a good pace. He added that Bumi intends to sell the entirety of its 50 percent stake in the company, hopefully by the end of the year.

Ahmad Reza Wijaya, head of investor relations at Bumi, said the company is committed to disposing its secondary assets and raising funds to accelerate its refinancing. The company and its subsidiaries have a total debt of $4.11 billion with maturity varying from this year up to 2016.

Dileep defined Bumi Resources’ peripheral assets as those outside its two main coal producers: Kaltim Prima Coal and Arutmin Indonesia. According to the company’s website, those include Indocaol Resources, Dharma Henwa and Pendopo Energi Batubara.

Dileep noted that the company will not sell its 70 percent stake in Bumi Resource Mineral, a miner, as it did not expect it fetch a good price.

Bumi Plc, the London-based holding company for Bumi Resources, made an offer last year to buy the firm’s entire stake in BRM, but the deal did not proceed because the value of BRM deteriorated.

Bumi Resources held a public presentation for investors and journalists in Jakarta to explain its stance on recent incidents, including Bumi Plc initiating a probe into Bumi Resources due to suspected financial irregularities.


The Asian Development Bank has cited the Philippines as one of the few exceptional cases in terms of economic expansion, raising its growth outlook for the country from 4.8 to 5.5 percent for 2012 while it scaled down its forecasts for other developing countries in the region.

In its latest “Asian Development Outlook” report, the increase in the growth projection for the Philippines took into account observations that the country was stronger than earlier anticipated in terms of withstanding the effects of global economic woes.

“The Philippine economy continues to show strength despite global and regional economic slowdown,” the ADB said in the report, which was released on Wednesday.

ADB cited the rise in investments by local firms, robust household consumption, and increase in government spending as factors behind the latest growth forecast.

For 2013, however, ADB expects the country to expand at a slower pace of 5 percent. This was anchored on expectation that demand from industrialized countries for exports from the Philippines would be weaker due to prolonged economic challenges confronting them.

For all developing countries in Asia, ADB cut its average growth forecast from 6.9 to 6.1 percent for this year, and from 7.3 to 6.7 percent for 2013.

China and India, which are the two biggest Asian economies, suffered from cuts in growth projections because they are believed to be hit more significantly by the crisis in the eurozone and the anemic performance of the United States.

China is now seen to grow by 7.7 percent for 2012 from an earlier projection of 8.5 percent. Moreover, it is now estimated to grow by 8.1 percent in 2013 from the previous forecast of 7.7 percent.

India is now expected to grow by just 5.6 percent this year from an earlier forecast of 7 percent. In addition, it is now seen to grow by 6.7 percent next year from the previous estimate of 7.5 percent.

“Developing Asia must adapt to a moderate growth environment, and countries will need to do more to reduce their reliance on exports, rebalance their sources of growth, and increase their productivity and efficiency,” Changyong Rhee, chief economist of ADB, said in a statement.

The United Sates and the eurozone are key export markets and major sources of foreign direct investments for many developing Asian economies. This is the reason the crisis in the eurozone and the lackluster performance of the United States are seen pulling down growth rates of the Asian countries.

Meanwhile, Neeraj Jain, ADB country director for the Philippines, said the favorable growth performance of the country would not mean absence of economic problems.

He said the key challenge for the Philippines has been to make its economic growth redound to poverty reduction. Despite its continually growing economy, Jain said, poverty has remained a serious problem.

“Despite growth, poverty incidence in the Philippines rose from 2003 to 2009. That is a cause for concern,” he said. Poverty rate stood at 24.9 percent in 2003 and 26.5 percent in 2009.

Jain said the country must implement policies that would attract investments in sectors that could provide jobs for the masses, especially those without college education.

Yesterday in Asia

Hong Kong, which was returning after a two-day holiday, rose 0.23 percent, or 47.90 points, to 20,888.28.

Sydney climbed 0.13 percent, or 5.6 points, to 4,438.6 but Tokyo fell 0.45 percent, or 39.18 points, to 8,746.87.

Shanghai and Seoul were closed for public holidays.

– Singapore was flat, losing 2 points to close at 3,077.14.

Wilmar International shed 1.25 percent to Sg$3.16 and Keppel Land fell 0.85 percent to Sg$3.52.

– Taipei fell 0.44 percent, or 34.05 points, to 7,684.63.

Hon Hai Precision dropped 0.33 percent to Tw$91.4 while TSMC was 0.22 percent higher at Tw$89.8.

– Manila was 0.50 percent higher, adding 26.84 points to 5,375.52.

SM Investments gained 2.70 percent to 760 pesos while Ayala Land rose 0.85 percent to 23.60 pesos but Alliance Global Group fell 0.13 percent to 14.94 pesos.

– Wellington finished 0.47 percent, or 18.35 points, higher at 3,889.60.

Fletcher Building added 2.5 percent to NZ$7.34 and Nuplex surged 5.5 percent to NZ$3.09, while Air New Zealand was up 0.4 percent at NZ$1.22.

– Jakarta eased 0.13 percent, or 5.33 points, to 4,251.51.

Palm oil company London Sumatra fell 6.2 percent to 2,275 rupiah, while its rival Sampoerna Agro lost 7.1 percent to 2,600 rupiah. Bucking the trend was cement maker Gresik, which was up 3.2 percent at 14,650 rupiah.

– Kuala Lumpur closed flat, nudging down 1.28 points to 1,649.75.

Sime Darby shed 3.4 percent to 9.41 ringgit, while AirAsia fell 1.6 percent to 3.02. Tenaga Nasional gained 1.5 percent to 6.95 ringgit.

– Bangkok gained 0.14 percent, or 1.89 points, to 1,307.55.

Power firm Electricity Generating PCL gained 1.55 percent to 131 baht, while oil company PTT lost 0.61 percent to 325 baht.

– Mumbai rose 0.24 percent, or 45.78 points, to 18,869.69.

Hindustan Unilever rose 2.37 percent to 555.5 rupees while Tata Global Beverages added 6.57 percent to 154.9 rupees.

India’s cash-strapped Kingfisher Airlines fell 4.89 percent to 14.16 rupees.

Shayne Heffernan Ph.D.  


Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
3 Raffles Place #07-01
Bharat Building Singapore 048617
Tel: +65 6329 6408 Fax: +65 6329 9699
Email :
Suite 53 Athenee Tower
63 Wireless Road, Lumpini, Pathumwan, Bangkok 10330
New York 347 5th Avenue, Suite 1402-508 NY, NY 10016


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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

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