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ASEAN STOCK WATCH Asean Affairs  4 October 2012

ASEAN Equities Preview

By Shayne Heffernan Ph.D.

The S&P 500 has climbed 16 percent so far this year. That strong gain, combined with weak global economic data and questions of whether Spain's bailout will come to pass, have prompted Economist Shayne Heffernan to say the rally is starting to look overextended.

The Federal Reserve may adopt numerical thresholds for inflation and joblessness that would serve as guideposts for policy, according to minutes from a September meeting that revealed some reticence about the U.S. central bank's latest stimulus.

The Dow Jones industrial average gained 80.77 points, or 0.60 percent, to 13,575.38. The Standard & Poor's 500 Index gained 9.63 points, or 0.66 percent, to 1,460.62. The Nasdaq Composite Index  gained 9.13 points, or 0.29 percent, to 3,144.36.

Initial claims for state unemployment benefits rose 4,000 to a seasonally adjusted 367,000, the Labor Department said, below economists' expectations for an increase to 370,000.

Coal companies' stocks rallied following Republican presidential nominee Mitt Romney's support of the coal industry during his televised debate with President Barack Obama on Wednesday night.

The weaker dollar lifted the prices of crude and basic metals, which helped buoy shares in the energy and materials sectors. An S&P index of energy shares .GSPE rose 1 percent, while an S&P index of materials shares .GSPM gained 1.3 percent.

Shayne Heffernan's Best Buys in ASEAN

Singapore

Hutchison Port Holdings Trust ("HPH Trust") is the first publicly traded container port business trust.

Listed on the Singapore Exchange (SGX), HPH Trust is sponsored by Hutchison Port Holdings ("HPH"), the global leader in the container port industry by throughput and a subsidiary of Hutchison Whampoa Limited ("HWL").

HPH Trust is managed by Hutchison Port Holdings Management Pte. Limited ("Trustee-Manager") (Read More), an indirect wholly-owned subsidiary of HWL.

HPH Trust's investment mandate is principally to invest in, develop, operate and manage deep-water container ports in the Pearl River Delta, while aiming to provide investors with stable and regular distributions as well as long-term Distribution Per Unit ("DPU") growth.

HPH Trust's portfolio consists of controlling interests in world class deep-water container port assets, namely Hongkong International Terminals ("HIT") and COSCO-HIT Terminals ("COSCO-HIT") in Kwai Tsing Port, Hong Kong; and Yantian International Container Terminals Limited ("YICT") in Shenzhen Port, PRC. The assets also comprise of certain port ancillary services and river ports complementary to the deep-water container ports operated by HPH Trust.

Thailand

Pakfood Public Company Limited produces and exports frozen seafood under a variety of brand names. The Company exports the majority of its products to Japan and the United States.

Current P/E Ratio (ttm)
8.5763

Estimated P/E (- )

Earnings Per Share () (ttm)
5.8300

Est. EPS

Est. PEG Ratio


Market Cap (M THB)
1,500.00

Shares Outstanding (M)
30.00

Enterprise Value (M THB) (ttm)
3,226.76

Enterprise Value/EBITDA
33.47

Price/Book
0.8664
Price/Sale
0.2205
Dividend Indicated Gross Yield
-%
Next Earnings Announcement
11/14/2012

Malaysia

DRB-Hicom Bhd is venturing into the automotive exhaust systems and manufacturing of vehicle parts under a joint venture with France's Faurecia Exhaust International SAS.

DRB-Hicom subsidiary Oriental Summit Industries Sdn Bhd had on Thursday signed a JV agreement with Faurecia to set up a JV company Faurecia Hicom Emissions Control Technologies (M) Sdn Bhd.

"With Faurecia's expertise in complete exhaust systems, the JVA will enable automakers to comply with increasingly stringent international anti-pollution standards with high quality products while keeping costs under control," said DRB-Hicom group managing director Datuk Seri Mohd Khamil Jamil.

He said the JV would enable them to introduce new emission control technology products to the group, in line with the current global trend towards energy efficient vehicles.

As for Faurecia, its shareholders are PSA Peugeot Citron (57.43%), public (42.34%), FCP Faurecia shareholders (0.19%) and Autocontrol (0.04%).

Faurecia's total group turnover in 2011 was 16.2bil, with 63.1% contributed by Europe, 20.8% (North America), 9.0% (Asia).

Faurecia's total workforce is 84,200 at 270 production sites in 33 countries.

Indonesia

Express Transindo Utama, the taxi operator controlled by Rajawali Corpora, is set to buy control of a rival to help expand its operations in the Greater Jakarta area.

“We are acquiring a small taxi operator that is not operating yet because we need their license for 2,000 units of taxis,” David Santoso, chief financial officer at Express, told reporters in a meeting in Jakarta on Wednesday. He didn’t disclose the price for the acquisition.

The company will acquire a 100 percent stake in Ekspres Mulia Kencana, a nonaffiliated company. EMK, which was established as a company early this year, has not been in operation but is licensed as a taxi operator in Indonesia.

Express plans to sell 1.05 billion shares, or 49 percent of the company’s equity, via an initial public offering on Oct. 25, 29 and 30. The company set the indicative price at Rp 440 to Rp 860 per share, which would raise as much as Rp 904 billion ($94 million). It would become the first taxi operator to be listed on the Indonesia Stock Exchange (IDX).

Of the total 1.05 billion shares, 255.68 million shares are owned by Rajawali Group, while 795.60 million shares are newly issued shares by Express. Of those new shares, 16 percent of the proceeds from the IPO will go to Express, which it will use for the acquisition of EMK, David said, while an additional 63 percent from the share sale will be used to help Express finance the purchase of 2,000 taxis next year.

Another 20 percent of the proceeds will be used to refinance its debt to Bank Central Asia, while the remaining 1 percent will be used as working capital, he said.

Ninety percent of Express’s revenue comes from its regular taxis, while its premium taxi, limousine and other car or bus rental business contribute the remaining 10 percent, said Daniel Podiman, chief executive of Express.

“We will continue to expand our regular taxi business because it is out biggest revenue contributor,” Daniel said, adding that for the regular taxi business, it is focusing its expansion in the Greater Jakarta area

“For the other businesses, we will expand it accordingly based on demand we see,” he said.

The company is targeting to be the No. 1 taxi operator in the Greater Jakarta area within the next three years and secure as much as 35 percent market share in the same period. Express Transindo is competing with rivals such as the Blue Bird Group, which is the biggest in Indonesia.

Dadang Suryanto, head of investment banking at Mandiri Sekuritas, the sole underwriter, said that Express will offer the shares to investors in Indonesia and overseas markets such as in Hong Kong and Singapore.

Express had Rp 60.2 billion in net income and Rp 338.4 billion in revenue in 2011. In the first quarter this year, it reported Rp 28.4 billion in net income and Rp 155.5 billion in revenue. Express is slated for listing on the IDX on Nov. 5.

Philippines

Meralco PowerGen Corp., the power generation arm of Manila Electric Co., plans to put up a liquefied natural gas-fired power plant in Batangas that can generate at least 1,200 megawatts, as part of its plans to help secure the growing electricity requirements within its franchise area.

The company wants to build the proposed LNG facility beside the Department of Energy’s $2.1-billion Batangas-Manila natural gas pipeline, and near the $1-billion regasification terminal in Tabangao, Batangas, to be constructed by Shell Companies in the Philippines—a strategic position that will enable Meralco to secure the supply of LNG from Shell and allow it to transport the gas to Manila through the pipeline.

Meralco PowerGen hopes that Shell would become its supplier of the LNG should it decide to push through with the project. This was formalized through a memorandum of understanding recently signed by both parties.

“The setting up of an LNG-based combined cycle power plant is meant to address fuel diversification as well as address the mid-merit capacity needs of the Luzon grid. This collaboration with Shell companies in the Philippines helps pave the way for facilities that ensure a reliable and competitively priced power supply,” said Aaron A. Domingo, Meralco PowerGen executive vice president and general manager.

For his part, Shell country chairman and president Edgar Chua said that the agreement with Meralco PowerGen would open “the door for greater use of cleaner energy and enhance energy security for the Philippines. We are very excited to work with Meralco PowerGen on this project.”

Shell may be able to supply the LNG to Meralco PowerGen through its planned LNG regasification terminal, which will be constructed beside its Tabangao refinery, and may be commissioned by 2016.

Yesterday in Asia

Tokyo gained 0.89 percent, or 77.72 points, to 8,824.59, Sydney added 0.31 percent, or 13.8 points, to 4,452.4.

Hong Kong was 0.09 percent higher, closing 19.67 points up at 20,907.95, but Seoul eased 0.17 percent, or 3.35 points, to 1,992.68.

Shanghai is closed for a weeklong public holiday.

– Singapore closed up 0.31 percent, or 9.50 points, at 3,086.64.

Jardine Cycle and Carriage gained 2.55 percent to Sg$49.84 and CapitaLand advanced 3.46 percent to Sg$3.29.

– Taipei ended flat, dipping 2.29 points to 7,682.34.

HTC fell 2.21 percent to Tw$287.0 while TSMC rose 0.89 percent to Tw$90.6.

– Manila closed 1.27 percent higher, adding 68.22 points to 5,443.74.

SM Investments was up 5.98 percent at 805.50 pesos while Ayala rose 3.62 percent to 440.20 pesos.

– Wellington fell 0.20 percent, or 7.61 points, to 3,881.99.

Fletcher Building fell 1.2 percent to NZ$7.25, Fisher & Paykel Appliances rose 3.7 percent to NZ$1.25 and Air New Zealand added 2.9 percent to NZ$1.25.

– Kuala Lumpur gained 0.71 percent, or 11.72 points, to end at 1,661.47.

KLCC Property rose 4.9 percent to 6.19 ringgit, KL Kepong gained 3.0 percent to 21.52 ringgit and Sime Darby added 2.9 percent to 9.68 ringgit.

– Bangkok was flat, edging down 0.92 points to 1,306.63.

Mobile telephone giant Advanced Info Service lost 1.44 percent to 206 baht, while Siam Cement gained 0.57 percent to 351 baht.

– Jakarta added 0.47 percent, or 19.95 points, to 4,271.46.

Carmaker Astra was up 4.7 percent at 7,750 rupiah and cement maker Gresik rose one percent to 14,800 rupiah.

– Mumbai rose 1 percent, or 188.46 points, to 19,058.15.

Engineering giant Bharat Heavy Electricals rose 6.57 percent to 266.05 rupees, private bank ICICI was up 2.93 percent to 1,083.7 rupees and Kingfisher Airlines fell 4.79 percent to 13.9 rupees.

Shayne Heffernan Ph.D.  

Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
Sales@Heffcap.com
 
Singapore
3 Raffles Place #07-01
Bharat Building Singapore 048617
Tel: +65 6329 6408 Fax: +65 6329 9699
Email : info@heffcap.com
 
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THAILAND Email : info@heffcap.com
 
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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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