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ASEAN STOCK WATCH 15  September  2010

Profit Taking in ASEAN Expected

Shayne Heffernan

Today may see some profit taking as we suggested, profit taking in ASEAN started after lunch yesterday.

Overnight trading in the USA was flat, and with out some strong indicators we expect some selling today.

However, long term investors should be looking at PTT, Banpu, Genting, Bumi and all the regions Bank stocks.

Singapore shares closed lower on Tuesday, with the benchmark Straits Times Index at 3,048.65, down 0.59 per cent, or 18.16 points. About 2.19 billion shares exchanged hands.

Losers beat gainers 255 to 230.

The Singapore Exchange (SGX) on Tuesday unveiled a list of 19 Chinese firms – including Baidu, China Mobile and PetroChina – whose American Depository Receipts (ADRs) will start trading here from Oct 22.

The move was first mooted by the SGX in March. It will be the first Asian exchange to offer ADR trading.

Issued by United States depository banks, ADRs are priced and pay dividends in US dollars and can be traded like the shares of US companies. They enable US investors to buy shares in foreign companies with reduced cross border and cross currency transaction risks.

SGX will work with US-based bourse operator Nasdaq OMX to bring ADR quotations to its new GlobalQuote platform.

Before its revamp, GlobalQuote was the Clob International board, providing trading mainly for Malaysian stocks in Singapore.

In Kuala lumpur today the KLCI ended higher for the day with the benchmark index surging 17.48 points to 1,474.44.

At Bursa Malaysia, 503 counters were up, 274 were down while 270 remained unchanged. There were 1.04 billion shares done at a total value of RM2.13 billion.

Maybank rose 25 sen to RM8.76, pushing the index up by 4.31 points while Public Bank advanced 32 sen to RM12.62, piling another 3.67 points to the index. CIMB climbed 13 sen to RM8.18, nudging the index up by 2.24 points. Public Bank foreign rose 20 sen to RM12.70.

The gains in the bank stocks reflected investors’ confidence of more upside for the Malaysian market, barring negative external factors. Genting jumped 42 sen to RM9.99 and Genting Malaysia six sen to RM3.16. Genting Malaysia’s associate Genting New York cleared the last hurdle to operate New York City’s first slot-machine-style “racino.”

IOI Corp rose 11 sen to RM5.74, Tenaga and Telekom Malaysia four sen each to RM9.24 and RM3.43 The ringgit fell back a little Tuesday after rising to its strongest level in 13 years against the US dollar on Monday in tandem with other strengthening regional currencies, as the latest economic reports showed China’s industrial output and retail sales in August accelerated more than expected.

Bernama reported the ringgit opened easier against the US dollar Tuesday on mild profit-taking, dealers said.

At 9am(0100GMT), the ringgit opened slightly lower at 3.1060/1080 against the greenback compared with Monday’s close of 3.1000/1030 The Philippine Stock Exchange index dipped 4.37 points or 0.11 percent to close at 3,968.29.

President Aquino is looking forward to “more happy days” in the local stock market as well as influx of investments in the country after share prices hit record highs.

The President on Tuesday expressed optimism about the country’s economic prospects shortly after he rang the opening bell at the Philippine Stock Exchange in Makati City.

“Confidence in the country’s prospects is experienced in many ways, but one of the most concrete manifestations is the recent improvement of the stock market,” he said.

The President, a few days before he embarks on visit in the United States to attract more investors, cited the market bull run and anticipated more foreign direct investments in the country.

“Last week, we averaged a daily turnover of P5.78 billion. This week, we could very well see average turnover in excess of P4 billion. These are numbers we haven’t seen in years,” he said.

Profit-taking escalated as the index pierced through the 4,000 mark in intraday trading, thus weighing down the financial, holding firm and property counters. But despite the much-anticipated correction, other investors still saw some selective buying opportunities especially in the mining/oil, services and industrial sectors.

Foreign investors were more aggressive than local buyers during the session as net foreign buying was still sizeable at P1.54 billion. During the last few days, it was the domestic investors that were mostly cashing out of the market while foreign players were just coming in.

Value turnover was higher at P9.1 billion compared to about P8 billion the previous day. There were 68 advancers, 81 decliners and 36 unchanged stocks.

Dealers said the respite was very much needed following the nine-day rally. Despite the small correction, however, the outlook remains still bullish.

The stock market is now trading in unchartered territory, close to breaching the 4,000 mark, on the back of strong foreign investor interest.

Among the stocks that defied the day’s pullback were Philippine Long Distance Telephone Co., Energy Development Corp., Megaworld Corp., First Gen Corp., Metro Pacific Investments Corp., Atlas Consolidated Mining and Development Corp., Filinvest Land Inc., Banco de Oro Unibank Inc. and Philex Mining Corp.

On the other hand, investors locked in gains by selling SM Investments Corp., Alliance Global Group Inc., Metropolitan Bank and Trust Co., Ayala Corp., Ayala Land Inc., Aboitiz Power Corp., Globe Telecom Inc. and Bank of the Philippine Islands. The Stock Exchange of Thailand (SET) composite index on Tuesday lost 15.65 points or 1.67 per cent to close at 921.39 points. The market value was 39.67 billion baht, with 5.08 billion shares traded.

The market is sensative to the pending Red Shirt rallies and the very strong Baht.

Police nationwide have been ordered to take strict legal action against any protesters who break the law, police spokesman Pol Maj-Gen Prawut Thavornsiri said on Tuesday.

The spokesman said the order was issued by police chief Pol Gen Wichean Potephosree.

He was speaking after a meeting of the Royal Thai Police Office operations centre in charge or preparations for planned rallies by the red shirts to mark the fourth anniversary of the Sept 19, 2006 coup.

Legal action would be taken against demonstrators who defy legal orders to end a rally found to have broken the law, such as setting up a road block, obstructing people from travelling to and from their residences, inciting unrest and causing physical harm to others, he said. Pol Maj-Gen Prawut said, there had so far been no reports of protesters being brought to Bangkok for a mass rally on Sept 19. The capital is under a strict watch, he said.

Exports for 2010 should be up 20 per cent year-on-year as projected as long as the baht does not strengthen to below 30 baht per US dollar, Commerce Minister Porntiva Nakasai said on Tuesday.

“The baht’s current value is not affecting the export sector much and the value of exports this year is expected to be around $183 billion,” Mrs Porntiva said.

Thai commerce attaches in 76 countries will meet on Thursday to discuss ways to help protect small and medium-sized businesses from the baht’s sharp appreciation, she said.

The Commerce Ministry is asking producers to continue the price freeze on consumer items until the end of the year, even though the price-fixing measure will end this month.

Most producers agreed to cooperate with the ministry, she said.

Top five most active values were as follows;

PTT closed at 282.00 baht, down by 9.00 or 3.09 per cent.

BANPU closed at 636.00 baht, down by 20.00 or 3.05 per cent.

PTTCH remained at 119.00 baht.

TCAP closed at 39.00 baht, up by 0.50 or 1.30 per cent.

TMB closed at 2.44 baht, down by 0.10 or 3.94 per cent.


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