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ASEAN STOCK WATCH 17  September  2010

ASEAN Markets Consolidate for Rally

Shayne Heffernan

Shayne Heffernan on ASEAN, PTT, LH, Genting, Malaysia, Bakrie, PLDT, Banpu, LVS

ASEAN markets are building for a strong run and today we are focused on PTT, LH, Genting, Malaysia, Bakrie, PLDT, Banpu, LVS

US stocks closed flat to unchanged Thursday on light trade.

The DJIA .DJI added 22.10 pts, or 0.21%, to close at 10,594.83, the S&P 500 .SPX dipped 0.40 pts, or 0.04%, to close at 1,124.67, and the NAS .IXIC gained 1.93 pts, or 0.08%, to end the session at 2,303.25.

The S&P 500 has been trading in a range between support at its 200 Day Moving Average,1,117, and the Key resistance at 1,130. Attempts to break 1,130 have not been successful since June, including one shot at it this week.

Beginning 2012, Genting Malaysia Bhd will no longer be your domestic stock which merely depends on visitors coming up for fun rides in Genting Highlands.

It will soon enjoy the benefits of a global gaming pie when its Aqueduct Racetrack in New York is fully operational.

A total of 53 projects are in active consideration by the Government for potential investments worth US$97bil, representing 45% of the total investment value targeted under the Economic Transformation Programme (ETP).

Topping the list for 131 entry point projects (EPPs), which have an overall investment value of US$216bil, are seven potential investors that have shown serious commitment for EPPs worth US$37bil.

One of the key projects targeted under the greater Kuala Lumpur plan is the mass rapid transit rail proposal, the brainchild of MMC Corp and Gamuda Bhd.

Further details of the EPPs will be revealed on Sept 21, the open day for public feedback and consultation with Pemandu, the Performance Management and Delivery Unit in charge of coordinating and monitoring the ETP. Public sessions in Kuching and Kota Kinabalu will be held on Oct 4 and 7 respectively.

Among the potential benefits are the generation of an additional 3.3 million jobs, the GNI impact per public dollar spent of seven times as well as personal and corporate tax revenue potentially hitting US$36bil to US$40bil.

“Commitment from the private sector is strong,” Idris said at a press conference yesterday. “However, in the past, the public and private sectors have not sat down to talk about this.” Of the total amount of funding required, about 92% was projected to come from private investment (32%, or RM144bil, from government-linked companies (GLCs), and 60%, or US$266bil, from non-GLCs).

Despite the major role played by domestic investors, the Government will embark on roadshows to attract foreign direct investments. The Jakarta Composite Index fell 15.40 points, or 0.5 percent, to close at 3,341.63.

The rupiah was at 8,985 per dollar as of 3:43 p.m. in Jakarta, compared with 8,980 yesterday.

The rupiah traded steady on concern the central bank will seek a weaker currency to support exports after Japan intervened to stabilize the yen for the first time since 2004.

Bakrie Telecom jumped 7.3 percent to 205 rupiah, closing at the highest level since Sept. 29, 2008. Telekomunikasi Indonesia may acquire a stake in the company by buying new shares, State Enterprises Minister Mustafa Abubakar said.

Bakrie Telecom Finance Director Jastiro Abi declined to comment on the possible stake purchase.

Bank Danamon Indonesia, the bank owned by Singapore’s Temasek Holdings Pte and Deutsche Bank AG, fell 0.9 percent to 5,700 rupiah. Danamon had its rating cut to “sell” from “neutral” by Goldman Sachs Group Inc., which said funding costs will likely start rising in the fourth quarter.

Bank Rakyat Indonesia, the nation’s second-biggest bank by assets, rose 5.9 percent to 10,700 rupiah, a record close. President Director Sofyan Basir said today he expects lending growth of as much as 22 percent in the third quarter.

Timah, the largest tin-mining company in the country, surged 12 percent to 2,825 rupiah, the steepest gain since June 1, 2009. Tin futures rose 2.2 percent to $23,150 a metric ton in London yesterday, closing at the highest level since July 22, 2008.

The contract climbed 1 percent to $23,375 a ton in London.

Astra Agro Lestari, the country’s largest listed plantation company by market value, fell 1.2 percent to 20,700 rupiah. Palm oil futures lost 1.1 percent to $840 a metric ton in Kuala Lumpur yesterday, declining for a second day.

The Philippine Stock Exchange index gained 31.79 points or 0.8 percent to 4,005.46.

All counters traded higher but the mining/oil, property and holding firm counters benefited most, surging by 1.6 percent, 1.83 percent and 1.23 percent, respectively.

There were more than twice gainers (105) as were there decliners (40).

Value turnover stood at P6.6 billion.

Investors bid up shares of Philippine Long Distance Telephone Co., Metropolitan Ban & Trust Co., Megaworld Corp., SM Investments Corp., Philippine National Bank, Aboitiz Power Corp., Alliance Global Group Inc., SM Prime Holdings Inc., Ayala Land Inc., Atlas Consolidated Mining & Development Corp., Philex Mining Corp. and Manila Electric Co.

On the other hand, the market sold down shares of Energy Development Corp., Metro Pacific Investments Corp., Filinvest Land Inc., First Gen Corp., Ayala Corp., Universal Robina Corp., Robinsons Land Corp. and Banco de Oro Unibank Inc.

The Stock Exchange of Thailand (SET) composite index on Thursday gained 3.71 points or 0.40 per cent to close at 924.81 points. The market value was 27.27 billion baht, with 5.05 billion shares traded.

Federation of Thai Industries chairman Payungsak Chartsuthipol said the planned mass rally of the red-shirts would not have any impact on the industry sector nor on the confidence of investors.

A recent survey on confidence of investors in the industry sector found that investors were not worried about the planned mass gathering. They viewed it is just a political expression which would not cause any problem to the production sector, said Mr Payungsak.

FTI’s Automobile Group spokesman Surapong Paisitpattanapong took the same tone, saying he was not concerned about the planned gathering.

Mr Surapong said it is a political activity to express the red-shirts’ point of view. He was confident that the mass gathering would not escalate to violence and cause damage to the country as all Thais want the country to have peace.

Thailand’s PTT Polymer Logistics division on Thursday opened Southeast Asia’s largest international distribution centre for plastic resin in this eastern province to facilitate plastic resin shipping to overseas buyers.

PTT president and chief executive officer, Prasert Bunsumpun, and representatives from public and private agencies participated in the opening ceremony.

According to Mr Prasert, the centre will initially provide services to the PTT Group’s subsidiary companies, which are PTT Polyethylene to receive 700,000 tonnes of plastic resin per year, and Bangkok Polyethylene PCL for 300,000 tonnes per year.

LH Land and House is staging a come back, the stock is trading like it is ready to make a serious move higher.

Top five most active values were as follows;

LH closed at 6.95 baht, up 0.40 baht or 6.11 per cent.

SCB closed at 91.75 baht, down by 0.75 baht or 0.81 per cent.

PTT closed at 284.00 baht, up 3.00 baht or 1.07 per cent.

CPALL closed at 39.00 baht, up 1.00 baht or 2.63 per cent.

BANPU remained at 642.00 baht.

Asian economic powerhouses China and India dominated a list of the region’s top companies released Thursday, claiming 32 of the top 50 places.

Each country accounted for 16 of the firms on the annual Forbes Asia Fab 50 list. Last year, China also had 16 businesses listed while India had 13.

China’s entries included Lenovo Group Ltd, the China Mengniu Dairy Co and SAIC Motor Corp Ltd while India’s included Infosys Technologies Ltd, JSW Steel Ltd and HDFC Bank Ltd.

The growing influence of Chinese and Indian firms was reflected by the fact that when the first list was compiled in 2005, it contained five Chinese and three Indian businesses.

Hong Kong and Taiwan tied this year for third place with four companies each while South Korea had three and Australia and Japan had two each. Japan topped the inaugural list in 2005 with 13 firms.

Indonesia, Singapore and Thailand rounded off the 2010 list with one entry each – Indonesia’s Bank Central Asia Tbk PT, Olam International Ltd in Singapore and Banpu Pcl in Thailand, one of 18 companies to make the list for the first time.

The list released by magazine publisher Forbes Inc was compiled from a shortlist of 936 Asian companies with revenues or market capitalization of at least 3 billion dollars.

Ranking criteria included recent financial returns, share price movement and future prospects. The previous five years’ revenue, operating earnings and return on capital were also taken into account as were recent financial results and share price movements.

In a report on the annual survey’s findings, Forbes said the fortunes of many of the Fab 50 companies bounced back last year in line with recovering economies around Asia.

China’s Dongfang Electric Corp saw its profits jump 256 per cent, the report said, adding that for Asian businesses in general: ‘Earnings, revenues and stock prices soared almost across the board after a rocky time the previous year.’

However, there were some high-profile casualties from the 2009 Fab 50, including Taiwan’s Hon Hai Precision Industry Co Ltd, parent company of Foxconn Technology Group, which dropped off the list for the first time after a spate of suicides at its southern China factories this year.

Only two companies have made the Fab 50 list every year since it started – Hong Kong’s Li and Fung Ltd and Infosys Technologies. Australian conglomerate Wesfarmers Ltd returned to the list after a four-year absence and was the biggest company out of the Fab 50 with 43 billion US dollars in sales in its past fiscal year.

Technology companies had the biggest single share of positions on the list with 10 representatives, followed by the materials industry, which took up eight places.

For the first time, there were no oil and gas or telecommunications companies on the list.

Shares in Singapore closed lower on Thursday, with the benchmark Straits Times Index at 3,067.11, down 0.13 per cent, or 3.92 points. About 1.93 billion shares exchanged hands.

Losers beat gainers 270 to 212.

Las Vegas Sands Corp, formed in 1989 with the purchase of the Las Vegas Sands Hotel, is considering changing its name to better reflect an increased global presence.

Sands, headquartered in Las Vegas, has for several years made most of its money in Asia. Its namesake hotel was demolished in years ago.

The company operates the Venetian and Palazzo resorts on the Las Vegas Strip, a casino in Pennsylvania, and three casinos in Macau, the world’s largest gambling center and the only place in China where wagers are legal. In April, it opened the $5.7 billion Marina Bay Sands resort in Singapore and construction is currently underway on two new Macau sites.

‘Senior management is seriously discussing a name change that would better reflect the company’s increased global presence,’ said company spokesman Ron Reese.

He said the change could be voted on as early as the company’s next board meeting, which is currently scheduled for early November. Goh Choon Phong, the incoming chief executive officer of Singapore Airlines Ltd., will face growing competition for both premium and economy-class passengers in Asia as he tries to revive profits from a two-decade low.

Goh, 47, will take over the company in January, the carrier said Sept. 3. Middle East carriers including Qatar Airways Ltd. and Emirates Airline are adding planes to win business-class traffic while AirAsia Bhd. and Qantas Airways Ltd.’s Jetstar are focusing on cost-conscious and first-time leisure travelers.

“The big question now is whether Singapore Air can still maintain their pricing power without losing out to rivals,” said K. Ajith, an analyst at UOB-Kay Hian Research Pte in Singapore. “Competitors are getting new aircraft and the service quality at Middle Eastern carriers is also improving. The low-cost carriers are also expanding very quickly.”

Profit at Singapore Air, the world’s second-largest airline by market value, sank 80 percent in the year ended in March as the worst recession in six decades prompted companies to cut premium travel and job losses led to a slump in leisure trips. Goh also needs to bring back capacity cut during the recession without hurting yields, or the average price a traveler pays to fly one kilometer, said Ajith.


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