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ASEAN STOCK WATCH 2  September  2010

ASEAN Stocks to Have Strong Day

Shayne Heffernan

Wall Street Stocks closed strongly on Wednesday, posting its best day in eight weeks, as investor mood brightened after better-than-expected factory data from the United States and China.

This will lead to another day of gains in ASEAN markets, if you have been following the advice, today will be a great day for you.

Positive economic data favoured commodities stocks in Singapore, with Noble Group up 2.9% at S$1.61, Golden Agri-Resources 3.8% higher at S$0.58 and Olam International up 3.4% at S$2.76.

Gaming group Genting Singapore, which owns one of two licensed casino resorts in Singapore, led the STI higher, rising 6.5% to S$1.80. The stock has been bolstered in recent weeks by continued upgrades in analyst ratings on improved earnings forecasts.

Property developer City Developments rose 1.5% to S$11.10, clawing back some of its losses incurred on the government’s recent measures to curb property speculation. Hong Kong Land rose 1.7% to US$5.46.

Singapore Telecommunications was flat at S$3.08 as investors mulled increased competition in the broadband space after the launch of the country’s high-speed national broadband network. Rival telco StarHub rose 2.0% to S$2.51.

Singapore share prices ended 1.1 percent higher on Wednesday, in line with the broader rise in Asian stocks as upbeat economic data from China and Australia revived shaky equity markets and gave a boost to risk sentiment.

The key Straits Times Index gained 32.50 points to end at 2,982.83. Overall volume traded was 1.66 billion shares worth S$1.60 billion. In the broader market, gainers outnumbered losers 323 to 134.

Data out on Wednesday showed Australia’s economy grew at the fastest pace in three years in the June quarter as households spent far more than expected while exports enjoyed an Asian-driven boom.

Other data showed Chinese manufacturing staged a moderate rebound in August, easing concerns about the pace of global growth that are based on weakness in the United States.

Singapore’s economy will likely expand at a record pace this year as a surge in demand for the city-state’s exports fuels manufacturing, according to a central bank survey of analysts.

The city-state’s gross domestic product will likely grow 14.9 percent this year, according to the median forecast of 20 economists in the quarterly survey, the Monetary Authority of Singapore said Wednesday.

In the previous survey in June, analysts had expected the economy would grow 9 percent this year.

Singapore’s economy – which relies on trade, finance and tourism – will likely be led this year by a 29 percent expansion of the manufacturing sector as non-oil exports soar 20 percent, according to the analysts.

The government boosted its 2010 growth forecast in July to a range of 13 percent to 15 percent after the economy expanded 18 percent in the first half from a year earlier.

The JCI rose 53.43 points, or 1.7 percent, to close at 3,135.37.

About 5.2 billion shares worth Rp 4.8 trillion changed hands. Gainers outnumbered decliners 139 to 59.

“The lower-than-expected inflation triggered investors to buy up interest-sensitive stocks like banking stocks and consumer goods stocks,” said Janson Nasrial, an analyst of Amcapital Indonesia.

“I am confident the JCI will hit 3,300 by the end of this year because inflation is still considered manageable, and our economic fundamentals are strong.”

The Central Statistics Agency reported that year-over-year inflation was 6.4 percent in August, below economists’ expectations of 6.7 percent.

Meanwhile, China’s manufacturing expanded at a faster pace in August and Australia’s economy grew faster than expected.

“Faster growth in Australia’s economy and China’s manufacturing are likely to support risk-taking sentiment,” said Yuji Saito, director of the foreign exchange department at Credit Agricole Corporate and Investment Bank in Tokyo.

On the Jakarta bourse, finance stocks rose. Bank Mandiri, the country’s biggest lender by assets, increased 1.7 percent.

Mortgage provider Bank Tabungan Negara climbed 2.2 percent.

Its finance director, Saut Pardede, said the company planned to sell Rp 1.5 trillion to Rp 2 trillion of bonds in the second quarter of next year to expand and improve the funding structure. He said lending could grow 27 percent in 2011.

Indofood Sukses Makmur, the nation’s biggest maker of instant noodles, slid 1.1 percent, while Unilever Indonesia advanced 0.9 percent.

Telekomunikasi Indonesia, the country’s biggest telecommunications provider, jumped 4.1 percent, its first gain in four days.

The rise followed a report by the Boston Consulting Group that the number of Internet users in Brazil, Russia, India, China and Indonesia would double to 1.2 billion by 2015, fueling growth at media companies and phone carriers.

Semen Gresik, the nation’s biggest cement-maker, increased 1.2 percent to Rp 8,800, the steepest climb since Aug. 19.

The stock was rated “buy” by BNP Paribas analyst Helmy Kristanto, who said the company would likely be the “main beneficiary” of growing development on Indonesia’s outer islands. Kristanto has a 12-month share-price estimate of Rp 10,150 for the stock.

The rupiah advanced the most in nearly three weeks on speculation the central bank will tolerate appreciation to curb the cost of imported goods, and on optimism overseas investors will buy more of the nation’s assets as trade with the rest of the world grows.

The rupiah climbed 0.4 percent to 9,000 per dollar. The currency strengthened as much as 0.6 percent, the most since Aug. 13.

The rupiah has risen 4.2 percent this year, the third-best performance among Asia’s most-traded currencies, excluding the yen.

The IPO by PT Indofood CBP Sukses Makmur, Indofood’s instant noodle and seasonings division, would be Indonesia’s largest in two years after Adaro Energy (ADRO.JK) raised $1.3 billion in 2008.

Indofood CBP set the price range for bookbuilding at 4,300 rupiah to 5,500 rupiah per share, said Harry Zen, a director at Credit Suisse Indonesia, one of the underwriters, giving a prospective 2011 price-earnings multiple of 15-19 times and a market cap of between $2.8 billion to $3.5 billion.

Indofood CBP will sell up to 1.166 billion new shares in the IPO, representing 20 percent of the enlarged share capital. It said 70-80 percent of the funds raised from the IPO would be used to repay debt and the rest for capital expenditure.

Indofood CBP will be competing with several other firms for investor funds, including IPOs by state-owned national carrier Garuda Indonesia and steel giant Krakatau Steel, which between them hope to raise a combined $800 million, while Bank Mandiri’s (BMRI.JK) rights issue could raise as much as $1.55 billion.

Coal miner Bumi Resources (BUMI.JK) plans to spin off its non-coal mining assets, while U.S. miner Newmont Corp (NEM.N) is considering listing its local unit.

Southeast Asia’s biggest economy has seen a steady pick up in investor interest over the past 18 months, thanks to a combination of political stability and improving economic growth.

Strong domestic consumption and demand for the country’s abundant commodities, ranging from coal to palm oil has also boosted foreign direct investment and appetite for Indonesian bills and bonds, lifting the rupiah.

The G20 member is expected to win an investment grade credit rating in the next year or two and is increasingly talked about as the up-and-coming emerging market, set to join the elite BRIC club consisting of Brazil, Russia, India and China.

SET index closed at 919.34, up 6.15 or 0.67% in trade worth 49.07 billion baht on Wednesday.

Top energy firm PTT (PTT.BK) gained 1.1 percent and rose to 269 baht amid hopes the national environment board would announce the list of hazardous projects later in the day, which may enable several key industrial projects, including PTT’s suspended sixth gas separation plant, to start up later this year, analysts said.

The country’s largest olefins maker, PTT Chemical PTTC.BK, was up 0.9 percent at 107.5 baht on expectations its ethylene product volume would rise along with more feedstock from its parent PTT’s sixth gas separation plant, they said. Other operators of halted projects were also expected to benefit from the approval of the list, including industrial conglomerate Siam Cement SCC.BK, which was up 2.2 percent at 274 baht.

Thai Union TUF the world’s largest canned tuna maker rose 7.5 percent to 61.25 baht, at one point climbing to an all-time high of 61.5 baht, as its plan to buy French-based MW Brands Holding SAS boosted earnings outlook and share price target.

Stocks with most active value were as follows:

PTT increased to 271.00 baht, up 6.00 baht.

KTB increased to 14.60 baht, up 0.20 baht.

TMB decreased to 2.66 baht, down 0.04 baht.

SCC increased to 305.00 baht, up 9.00 baht.

BANPU increased to 618.00 baht, up 6.00 baht

Bursa Malaysia Kuala Lumpur Composite Index closed at 1431.96 points on Wednesday, added 9.47 points or 0.67%.

DiGi dropped 8 sen to RM24.66; CIMB closed unchanged at RM7.80; IOI rose 5 sen to RM5.30 and Maybank jumped 10 sen to RM8.49 The ringgit was quoted at 3.1302 to the US dollar.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) has chalked up gains of more than 3% in the past two weeks compared with Japan’s Nikkei 225 which lost 3.55%, Hong Kong’s Hang Seng which shed 2.7% and China’s Shanghai Composite Index which is down 0.87%.


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