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ASEAN STOCK WATCH 23  September  2010

ASEAN Markets to Open Higher

Shayne Heffernan

Wall St closed slightly lower but it was far better than expected which should give ASEAN investors some hope this morning.

PTT, NEPS, BANPU, GMGG, PLDT, BUMI all look cheap today and are companies that are going to benifit from the growth in the region.

We expect a strong day on the local markets.

The Stock Exchange of Thailand (SET) composite index on Wednesday gained 7.79 points or 0.83 per cent to close at 945.00 points. The market value was 42.36 billion baht, with 5.55 billion shares traded.

PTT has dropped an offer for Carrefour’s Tahi assets, 43 stores, including 39 hypermarkets.

PTT Pcl (PTT), Thailand’s largest energy firm, withdrew its bid for French retailer Carrefour SA’s (CARR) Thai assets on Wednesday following pressure by the Thai government.

The race for ownership is now made up of Berli Jucker Pcl (BJC), Thai retailer Central Group, France’s Casino (CASP) and Britain’s Tesco (TSCO) for Carrefour’s estimated $600 million assets in Thailand.

Carrefour, Europe’s top retailer, wants to sell its stores in Malaysia, Singapore and Thailand at a potential price of $1 billion to focus on markets where it holds leading positions.

It has set a Nov. 5 deadline for second round bids, said two other sources with the knowledge of the bidding process.

Thai Energy Minister Wannarat Charnnukul had questioned the PTT plan on Tuesday and Prime Minister Abhisit Vejjajiva had said that according to Thailand’s 2007 constitution, state enterprises cannot compete with private companies without justification.

Centennial Coal Company Ltd’s Thai suitor, Banpu Public Company Ltd, has declared its $2.4 billion takeover bid unconditional after taking effective control of the target.

Centennial also announced on Wednesday that directors Catherine Brenner, Richard Grellman and Paul Moy had resigned and had been replaced by Banpu’s nominees Chanin Vongkusolkit, Somruedee Chaimongkol and Rawi Corsiri.

Banpu, which now has a 53.73 per cent stake in the coal miner, on Tuesday received unconditional support from the Australian Treasurer Wayne Swan for its off-market offer.

The condition that the Foreign Investment Review Board approve the offer had been fulfilled, Sydney-based Centennial said in a statement on Tuesday.

Ebeling Heffernan Strong Buy PTTCH, Thailand’s largest olefins maker, expects to run its new 1 million tonne ethane cracker at full capacity next year, up from 50 percent now, its chief executive said.

“If the sixth gas separation plant of PTT, which is the main feedstock supply to the cracker, is able to start operations in the fourth quarter, then the cracker should run fully next year,” Veerasak Kositpaisal said.

Its parent’s gas separation plant is now expected to start up in the fourth quarter after work on it was suspended a year ago by a court ruling in an environmental dispute at Map Ta Phut, the world’s eight-largest petrochemical hub.

The $780 million gas plant was among 74 projects at Map Ta Phut whose suspension was lifted by a court last week

Top five most active values were as follows;

PTT closed at 293.00 baht, up by 6.00 baht or 2.09 per cent.

PTTCH closed at 132.00 baht, up by 8.50 baht or 6.88 per cent.

BANPU closed at 680.00 baht, up by 10.00 baht or 1.49 per cent.

SCB closed at 96.75 baht, up by 2.50 baht or 2.65 per cent.

KTB remained at 15.50 baht.

Shares in Singapore closed higher on Wednesday, with the benchmark Straits Times Index up 0.71 points, or 0.02 per cent, at 3,096.10.

Shares of Singapore’s Neptune Orient Lines (NEPS) led gains in the STI, and rose 3.5 percent to S$2.07 after Macquarie upgraded the stock to “outperform” from “underperform”, a local trader said. Ebeling Heffernan have NEPS rated a Strong Buy.

Chinese shipbuilder Cosco Corp (COSC) also outperformed the broader market, and jumped 5.2 percent to S$1.82 after Citigroup upgraded the stock to “buy” from “sell”, citing the firm’s success in getting more sophisticated projects.

GMG Global (GMGG) surged 23 percent on higher rubber prices before its shares were halted around midday. Some 3.5 billion shares were traded.

Investors sold down shares of SM Investments, Megaworld, PLDT, Aboitiz Power, EDC, Alliance Global Group, Ayala Land, Ayala Corp., Banco de Oro, Filinvest Land, First Gen, Metrobank and DMCI Holdings.

The Philippine Stock Exchange index shed 33.93 points or 0.83 percent to close at 4,054.18 at the close.

Value turnover amounted to about P6 billion. Foreign investors, however, remained upbeat on selected stocks, resulting in a P324 million worth of net foreign buying for the day.

The mining/oil counter bucked the downturn, rising 3.33 percent. The property sector succumbed the most to profit-taking as its counter declined by 1 percent.

Despite the overall index decline, advancers outnumbered decliners, 83-76, while 36 stocks were unchanged.

PNB, Philex, Metro Pacific Investments, Lepanto Mining, SM Prime Holdings, RCBC and Security Bank led the day’s advancers.

Philex has been rising on reports of prospective new mining acquisitions such as the $5-billion Tampakan mine while Lepanto benefited from a recent deal with a South African gold miner for the development of its Far Southeast project.

In Jakarta the JCI fell 21.69 points, or 0.6 percent, to close at 3,343.34. Volume was heavy, with 12.4 billion shares worth Rp 6.54 trillion ($726.2 million) changing hands. Decliners outnumbered gainers 142 to 80.

Indications of weakness in European and US markets helped fuel late selling across Asia.

Bumi Resources, the country’s largest coal producer, declined 1.2 percent after Kim Eng Securities downgraded the stock to “sell” from “hold.”

Perusahaan Perkebunan London Sumatra Indonesia, the nation’s second-biggest listed plantation company by market value, rose 3.5 percent to Rp 10,250, its highest level since July 2008.

Rubber gained for a third day to its highest level in almost five months, with futures in Tokyo reaching 311.5 yen per kilogram ($3,669 a metric ton).

Timah, Indonesia’s biggest tin producer, fell 2.7 percent, dropping for a third day. Tin futures retreated 1.9 percent to $23,000 a metric ton in London on Tuesday, the sharpest drop since Aug. 31.

Astra International, the nation’s biggest automotive retailer and a seller of Honda motorcycles, fell 0.4 percent to Rp 55,000.

Motorcycle sales in Indonesia may fall 15 percent to 20 percent this month from August due to Ramadan, Bisnis Indonesia reported, citing Sigit Kumala, senior general manager of sales at Astra Honda Motor.

Meanwhile, the rupiah gained ground against the US dollar, reaching its strongest level in a week after policy makers in the United States vowed to keep borrowing costs low for an “extended period,” boosting the appeal of higher-yielding Indonesian assets.

The US Federal Reserve said it was willing to ease monetary policy further, as the pace of recovery and job growth in the world’s biggest economy had “slowed in recent months.” The rupiah traded at 8,950 per dollar as of the stock market’s close, from 8,965 on Tuesday.

“The basic theme for the rupiah’s strengthening is the weakening of the dollar,” said Tetsuo Yoshikoshi, a senior economist at Sumitomo Mitsui Banking in Singapore. “We are seeing capital inflows into Indonesian equities and bonds. The currency could strengthen more.”

Bank Indonesia Deputy Governor Hartadi Sarwono said the rupiah would likely remain stable this year, with a “slight” risk of depreciation next year.

Overseas investors have pumped $2.2 billion into Indonesian stocks this year and nine times that amount in debt assets to benefit from the nation’s policy rate of 6.5 percent, the highest in Asia.

Jakarta logged $25.76 million in inflows on Wednesday, enjoying net buying for the ninth straight session.


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