ASEAN KEY DESTINATIONS
ASEAN Markets Ready to Rally Again
ASEAN Markets look like they will improve further in the next week as the USA sits close to a possible break forward. On our ASEAN watch list today are PTT, PTTCH, Genting, NOL, and UOB.
Over night on Wall St Markets were pressured early by a report showing a measure of New York state business conditions slipped to the lowest level in more than a year, while industrial output rose at a slower rate in August.
The S&P found support shortly after the reports at its 200-day moving average, climbing back above the 1115 level.
But the benchmark index was once again unable to pierce the 1130 threshold, seen as a key resistance level by Ebeling Heffernan, which, if breached, could spark further buying.
The Dow Jones industrial average gained 46.24 points, or 0.44 per cent, to 10,572.73. The Standard & Poor’s 500 Index rose 3.97 points, or 0.35 per cent, to 1125.07. The Nasdaq Composite Index climbed 11.55 points, or 0.50 per cent, to 2301.32.
Among the top decliners, energy shares were pressured by a fall in crude oil prices and technology shares lost ground after some bearish analyst comments.
Equities were little moved after the Japanese government intervened in global currency markets to sell yen for the first time in six years, though the US dollar climbed.
October crude futures settled down 1 per cent to $US76.02 per barrel, while the S&P Energy index lost 0.2 per cent.
In Malaysia the KLSE eased 0.1 percent ahead of a holiday on Thursday to close at 1472.95 points as the market consolidated after a three-day rally, in line with weak Asian peers.
Actively traded stocks include GENS-CB, TIMECOM, CAROTEC, AXIATA, COMPUGT, KNM, IOI, GAMUDA, MAYBANK and GAMUDA-CM. Trading volume declined to 725.15 mil shares worth RM1436.06 mil as compared to Tuesday’s 1040.20 mil shares worth RM2127.93 mil. Lagging Movers were MAYBANK (-4 sen to RM8.72), AMMB (-9 sen to RM5.89), SIME (-4 sen to RM8.29), IOI (-3 sen to RM5.71) and PLUS (-7 sen to RM4.10). Leading Movers were PUBLIC BANK (+14 sen to RM12.76), MISC (+5 sen to RM9.00), AXIATA (+1 sen to RM4.55), YTLP (+2 sen to RM2.34) and BAT (+20 sen to RM47.20). Market breadth was negative with 299 gainers as compared to 416 losers.
Ebeling Heffernan Strong Buy Genting Malaysia Bhd announced that its indirect wholly owned subsidiary, Genting New York LLC, has received the final approval for it to be the developer and operator of a video lottery facility at the Aqueduct Racetrack in New York, the United States.
The approval brings Genting NY closer to kick-starting works to roll out its first-ever video lottery facility in the United States.
“This changes the profile of Genting Malaysia. Now that it will have operations in the United States and the United Kingdom, Genting can be viewed as a global gaming stock,” said a gaming analyst.
Genting Malaysia shareholders recently approved the resolution to acquire Genting UK from Genting Singapore for about RM1.67bil.
In Singapore the Straits Times Index closed higher on strong economic data, with the benchmark Straits Times Index at 3,071.03, up 0.73 per cent, or 22.38 points.
About 2.60 billion shares exchanged hands.
Gainers beat losers 348 to 148.
Las Vegas Sands and Genting Resorts are booming, tourism is Singapore will hit all time highs and Employment vacancies in Singapore rose by 73 per cent over the year to 45,100 in June, fuelled by strong economic expansion.
Seasonally adjusted, job openings climbed for the fifth straight quarter, with a gain of 12 per cent from the earlier quarter in March, said the Ministry of Manpower on Wednesday. As vacancies rose and unemployment stabilised, the seasonally adjusted ratio of job vacancies to unemployed persons increased to 1.04 in June, from 0.90 in March.
The Stock Exchange of Thailand (SET) composite index went down 0.29 points or 0.03% to close at 921.10 points at the end of trading session on Wednesday afternoon. The trade value was 41.09 billion baht.
Thai Airways (THAI) shares slumped after it priced new stock worth 15 billion baht ($488 million) at a 14.5 percent discount to the market, cheaper than analysts had expected.
The Thai flag carrier said on Wednesday it would sell 483.89 million new shares at 31 baht each, including 246.93 million to the finance ministry, which had committed itself to maintaining its 51.03 percent stake.
Shares in Thai Airways International Pcl slid nearly 9 percent to a seven-week low as trading in the stock resumed after a brief delay while details of the new issue were announced.
Thai Airways International’s chairman is adamant that the controversial plan to create a low-fare carrier with Singapore-based Tiger Airways will proceed in spite of lingering opposition.
Ampon Kittiampon yesterday said THAI’s board authorised management to carry on with negotiations with Tiger Airways on a draft agreement that will lead to the formal establishment of Thai Tiger Airways (TTA).
A memorandum of understanding to set up TTA, 51% owned by THAI and 49% by Tiger, was signed on Aug 1.
The fact that the prime minister and the Finance Ministry, the major shareholder in THAI at 51%, expressed support for the deal, as well as the upward trend in THAI’s share price after the agreement was announced, showed TTA’s formation was a move in the right direction, said Mr Ampon.
By the midsession, the stock was down 6.9 percent at 33.75 baht, underperforming a 1.3 percent fall in the overall market.
On our watch list at Ebeling Heffernan is PTTCH, the company has seven projects in Map Ta Phut that were suspended by the Administrative Court in 2009 for failing to meet the requirements of Section 67 of the 2007 Constitution that requires a completion of environmental and health impact assessments, the holding of public hearings and independent reviews before projects can operate.
Mr Veerasak said that the company is now waiting for confirmation from the court on its ruling earlier this month that allowed most of the halted projects to proceed.
“Once the projects are allowed to operate, our revenue next year should grow by 50-60% from this year, or 130 billion from a sales target of 80 billion this year,” said Mr Veerasak.
The baht has set 13-year highs against the dollar in the past week but fell on Wednesday in line with other Asian currencies after the Bank of Japan intervened to push down the yen.
Asked about market talk that the Bank of Thailand might consider imposing capital controls after an unscheduled meeting of its Monetary Policy Committee last Friday, Tarisa said: “It was meant for monitoring the baht, which has appreciated fast.”
The Thailand Futures Exchange (TFEX) is paving the way to allow foreign investors to trade Thailand’s first interest rates futures contracts in an attempt to expand trading volume.
Kesara Manchusree, the TFEX managing director, said the exchange was seeking Bank of Thailand approval of foreign investor trading of the new futures contract that is due to be introduced next month.
Ms Kesara said the central bank agreed with the principle, but formal approval is expected later and should be in time for the first day of trading.
Top five most active values were as follows;
PTT closed at 281.00 baht, down 1.00 baht (0.35%)
SCB closed at 92.50 baht, down 2.00 baht (2.12%)
KBANK closed at 105.00 baht, down 2.50 baht (2.33%)
PTTCH closed at 118.50 baht, down 0.50 baht (0.42%)
SCC closed at 313.00 baht, up 1.00 baht (0.32%)
The Philippine Stock Exchange added 5.16 points, or 0.13 percent, to close at an all time high of 3,973.48, reversing the loss incurred the previous day.
The mining/oil and services counters led the day’s gainers, respectively rising by 2.56 percent and 1.24 percent.
Value turnover eased to P6.42 billion from the previous day’s P9 billion. There were 74 advancers against 64 decliners, while 44 stocks were unchanged.
“There’s rational exuberance in the market,” said Paul Joseph Garcia of ING Investment Management.
After hitting 4,000, the PSEi may rise to as high as 4,700 next year. Also, strong support will be at around 3,800, Garcia said.
He added that the entry of big fund management and investment firms in the local market had helped stoke bullish prospects over the next two years.
The Jakarta Composite Index leaped higher by 126.14 points, or 3.9 percent, to a record high of 3,357.03. It was its steepest gain since May 26.
The market was closed for the Idul Fitri holiday from Sept. 8 through Tuesday. Analysts said investors were eager to buy Indonesian stocks following a raft of encouraging economic news in recent days.
“We’re catching up on regional market gains, with foreign buyers looking to Asia for growth,” said Fadlul Imansyah, who helps manage $200 million in assets at Jakarta-based CIMB Principal Asset Management.
Reports that topped economist estimates over the past week included US retail sales and Chinese industrial production, lending and retail. The European Commission also said this week that the region’s economy may grow almost twice as fast as forecast in 2010. Indonesia’s economy may grow 6 percent this year, President Susilo Bambang Yudhoyono said on Wednesday. That compares with growth of 4.5 percent last year.
Astra International, the country’s biggest listed company, jumped 8 percent to Rp 57,800, its highest in at least 19 years.
“Astra is attractive because its many businesses represent all the major sectors in Indonesia,” Fadlul said. The nation’s largest car retailer also has subsidiaries in the banking, palm oil and coal mining sectors.
Bumi Resources, the country’s largest coal producer, rose 6.4 percent. The miner on Sept. 7 revealed that Glencore International, the world’s largest commodities trader, has owned a stake in the company since June.
Bank Central Asia, the largest lender by market value, gained the most since March 17, rising 7.4 percent to a record Rp 6,500. The bank expects lending growth this year of more than 22 percent, its vice president director, Jahja Setiaatmadja, said on Tuesday.
BCA said in July that it may raise its 2010 loan-growth target to 20 percent from 15 percent.
International Nickel Indonesia, the nation’s biggest producer of the metal, climbed 4.6 percent to Rp 4,525, the highest since May 10. Nickel futures jumped 2.2 percent to $23,350 a metric ton in London on Tuesday, the highest close since May 4.
Edwin Sebayang, head of research at Bhakti Securities, attributed the rally to foreign buying and Indonesia’s low-interest rate environment.
“On the banking and auto move, market chatter says since this morning that most people in the market expect the central bank will continue to hold rates next month, which created excitement as Astra and the banks jumped,” he said.
The rally made the market Asia’s second-best performer this year, ahead of the Philippines and Thailand, respectively.
The rupiah was little changed at 8,983 per dollar as of the stock market’s close in Jakarta, after earlier climbing as much as 0.3 percent, according to data compiled by Bloomberg. The dollar rebounded from a 15-year low versus the yen after Japan intervened to weaken its currency for the first time since 2004.
“We suspect a coordinated intervention in currencies across Asia, including Indonesia,” said Aris Setiawan, a Jakarta-based foreign-exchange trader at Bank Chinatrust Indonesia. “We saw some activity by Bank Indonesia. It doesn’t want a volatile rupiah.”
Central banks intervene by buying or selling currencies to influence exchange rates. The yen tumbled 2.9 percent to 85.43 per dollar on Wednesday, the biggest drop in almost two years.
Government bonds rose, pushing the 10-year yield to the lowest level in a month, on optimism relatively high yields will draw funds from abroad. The rupiah erased gains as Japanese intervention to weaken the yen boosted demand for dollars.
The yield on the government’s benchmark 11 percent bonds due in November 2020 fell seven basis points to 7.95 percent, according to midday prices provided by the Inter-Dealer Market Association. Foreign funds increased their holdings of the nation’s debt by 61 percent this year to Rp 174.1 trillion ($19.33 billion) as of Sept. 3, Finance Ministry data show.
“The risk appetite for Indonesian bonds is getting better,” said Dino Nunuhitu, vice president at Indo Premier Securities in Jakarta. “We are seeing buying from offshore.”