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ASEAN STOCK WATCH Asean Affairs   13 September  2011

Asean Stock Watch- September 13



Stocks in Europe and Asia plunged on Monday, while Wall Street posted a last-minute rally on a volatile day in which headlines about the eurozone’s debt crisis rattled markets.

The Dow Jones Industrial Average was up 0.63 percent, while the broader S&P 500 climbed 0.70 percent and the tech-heavy Nasdaq Composite surged 1.10 percent, rebounding from steep initial losses.

Earlier in Europe, London’s FTSE-100 dropped 1.63 percent, while Frankfurt’s DAX slid 2.27 percent and Paris’ CAC 40 plummeted 4.03 percent amid a steep sell-off in French banking stocks.

Shares in French lenders such as Societe Generale fell as much as 10 percent during the day on concerns that the Moody’s ratings agency might downgrade them because of the amount of Greek debt bonds they hold.

The euro was also shaken by the sell-off, at one point dropping to $1.3495, its lowest level against the dollar since February, and to 103.90 yen, its lowest level against Japan’s currency since 2001.

In Asia, the Tokyo stock market tumbled 2.31 percent to strike its lowest close in 29 months.

The surge in US stocks, which came in the last minutes of trading on Wall Street, was triggered by a report in the Financial Times that China was in talks to buy Italian government bonds, some analysts said.

“There was a story… that the Chinese were talking to Italy about buying a bunch of their bonds. That’s why you saw a late run-up in stocks and the euro,” said David Solin, an analyst with Foreign Exchange Analytics.

Other analysts pointed to optimism that stocks might be oversold and that fears of a global economic slowdown could be overblown.

“There are ongoing worries about the global economy, there are ongoing worries about Greece and the eurozone, there are ongoing worries about US fiscal policy,” said Hugh Johnson, of Hugh Johnson Advisors.

“They are not behind us, but the key question that investors are trying to answer is: is it just a slowdown in the economy or something more serious? And they are slowly coming to the conclusion it may only be a slowdown.”

Developments in the eurozone’s debt crisis spooked investors, including a warning from Germany’s economy minister on Monday that Europe could not rule out an “orderly default” by Greece.

In Greece itself, protesters challenged unpopular austerity measures over the weekend, while the government announced plans for two billion euros ($2.7 billion) in budget cuts.

“The political theater playing out in Europe continues to drive investors towards the exits with policymakers adopting an increasingly tough line with respect to Greece as bailout fatigue in northern Europe starts to manifest itself alongside austerity fatigue in southern Europe,” Michael Hewson of CMC Markets in London said.

On the forex market, the euro bounced back from its lows of the day to stand at $1.3680 against the dollar at 2100 GMT, compared to $1.3649 at the same time on Friday. Europe’s common currency made a similar comeback against the yen, trading for 105.56 yen late on Monday, compared to 105.91 on Friday.

The dollar fell to 77.15 yen from 77.58 on Friday.

The greenback also weakened against the Swiss franc, falling to 0.8800 francs from 0.8836 on Friday.

Against the British pound, the dollar stood at $1.5862 on Monday, compared to $1.5847 late on Friday.


Singapore shares closed lower on Monday, with the benchmark Straits Times Index at 2,743.58, down 2.89 percent, or 81.52 points.

About 1.1 billion shares exchanged hands.

Losers beat gainers 387 to 91.


Share prices on Bursa Malaysia were higher in early trade Tuesday as investors took the cue from the positive overnight performance on Wall Street despite ongoing concerns about euro debt and the possibility of a Greek default, dealers said.

After 10 minutes of trading, the benchmark FTSE Bursa Malaysia KLCI was up 3.47 points at 1,449.73.

Key US stock indices jumped in the last trading hour to close higher by between 0.6 per- cent to 1.1 per cent amid news that China might purchase Italy bonds.

"News that China was looking to buy some Italian bonds tempered investors' worst fears over the euro zone's sovereign debt crisis," said a dealer.

Meanwhile, HwangDBS Vickers Research said the local bourse could stage a mild recovery after a plunge of 23 points yesterday, with trading activity expected to be light in view of the still hazy general market outlook.

"The immediate support and resistance levels for the benchmark index are currently seen at 1,435 and 1,465 respectively," it added.

The Finance Index rose 3.57 points to 13,507.54, the Plantation Index added 25.49 points to 7,308.62 and the Industrial Index gained 1.74 points to 2,668.68.

The FBM Emas Index improved 20.43 points to 9,900.86, the FBM Mid 70 Index increased 9.17 points to 10,723.82 and the FBM Ace Index rose 5.47 points to 3,795.08.

Gainers beat losers 120 to 39 while 85 counters were unchanged, 1,245 untraded and 28 others suspended.

A total of 27.43 million shares worth RM25.99 million were traded.

Among active stocks, Dutaland rose one sen to 62.5 sen, Ramunia Holdings added 1.5 sen to 44.5 sen and Ramunia HLD BHD-WA increased half a sen to 28.5 sen.

For heavyweights, Maybank slipped three sen to RM8.58, CIMB improved one sen to RM7.07 and Sime Darby gained seven sen to RM8.75.


The Philippine stock market on Monday fell below its key support level on the back of investor worries over a potential Greek debt default.

At the Philippine Stock Exchange, the composite index lost 48.22 points, or 1.11 percent to 4,297.85, closing below its 4,300-support line, while the broader all-shares index fell 28.73 points, or 0.94 percent to 3,034.61.

Losers beat gainers, 110 to 39, while 34 stocks were unchanged. A total of 8.24 billion stocks worth P3.20 billion changed hands.

“Concerns of a possible Greek default spilled over to local equities,” said Astro del Castillo, managing director at First Grade Finance Inc.

On Friday, the surprise resignation of a key official of the European Central Bank spooked Wall Street with the Dow Jones Industrial Average tumbling 2.7 percent to 10,992.13.

Asian stock markets followed suit on Monday, aggravated by the resignation of Japan’s trade minister after just eight days in office.

Debt-plagued Greece recently committed to state spending cuts of 22.7 billion euros, but it seems unlikely that such a commitment will be met, analysts said.

“Such a failure will deprive Greece of the second tranche of its bailout package. This could spell doom for Greece and a default may follow,” said AB Capital Securities Inc., adding that a default may trigger a “bank run of huge proportions” that will strike a big blow on confidence.

Now hovering at its immediate support, the PSEi may further fall to the 4,100 to 4,200 levels given the problems in Europe and weakness in the US economy, said Joseph Roxas, president of Eagle Equities.

“A further breakdown [of its immediate support] will mean a testing of the next major support of the main index, which would be at its long term 250-day exponential moving average,” AB Capital said.

“This is significant and could trigger a start of a bear market as the PSEi has stayed above the said moving average since May of 2009,” the brokerage said.

Asian currencies also fell sharply on Monday amid fresh fears that Europe’s debt problems and a potential default by Greece would damage the global economy. At the Philippine Dealing System, the peso shed 32.50 centavos to close at 42.815 against the US dollar from 42.490 on Friday.

Analysts said concerns Greece’s debt problem would spread across Europe have caused massive sell-offs, as investors headed for safer havens like bonds and Japanese yen. The dollar-peso pair opened at 42.630 and moved to a high of 42.820 and to a low of 42.630.

During the intra-day session, the currency pair averaged 42.692. Total trading volume surged to $921.700 million from $752.810 million last week.

The currency pair is expected to trade within the 42.20 to 43 range this week.


Singapore shares closed lower on Monday, with the benchmark Straits Times Index at 2,743.58, down 2.89 percent, or 81.52 points.

About 1.1 billion shares exchanged hands.

Losers beat gainers 387 to 91.


The Stock Exchange of Thailand main index went down 21.54 points or 2.03 percent to close at 1,040.83 points at the end of trading session on Monday afternoon. The trade value was 22.06 billion baht, with 3.54 billion shares traded.

The SET50 index ended at 723.30 points, down 16.43 points or 2.22 percent, with a total trade value of 16.68 billion baht.

The SET100 index fell 35.53 points or 2.20 percent to stand at 1,577.58 points, with a total turnover of 18.99 billion baht.

The SETHD index went down 20.14 points or 1.97 percent to stand at 1,003.85 points, with total trade value of 5.87 billion baht.

The MAI index dropped 4.69 points or 1.57 percent to close at 293.45 points, with total transaction value of 234.12 million baht.

Top five most active values were as follows;

BBL (XD) closed at 150.50 baht, down 5.50 baht (3.53 percent)

PTT closed at 314.00 baht, down 7.00 baht (2.18 percent)

IVL closed at 36.00 baht, down 2.00 baht (5.26 percent)

SCC closed at 312.00 baht, down 9.00 baht (2.80 percent)

ADVANC closed at 121.00 baht, up 1.00 baht (0.83 percent)


On the HCM Stock Exchange, the VN-Index advanced by 0.65 percent, closing the first session of the week at 462.93 points.

Gainers outnumbered losers by 143-91.

The value of trades jumped 20.5 percent over last Friday's level to VND862.8 billion (US$41.7 million) with the trading volume up 10.6 percent to 52.2 million shares.

The increase of the Index was due in part to three large capitalised stocks which hit their ceiling prices: insurer Bao Viet Holdings (BVH), food processor Masan (MSN) and PetroVietnam Finance (PVF). Real estate developer Hoang Anh Gia Lai (HAG) added nearly 2 per cent to VND37,100.

Meanwhile, real estate developer Vincom (VIC) bottomed out and six other bluechips tumbled 0.6-2.7 per cent.

Property trader Hoang Quan Corp (HQC) claimed the highest trading volume of around 2.7 million shares. It also hit the daily limit of 5 percent to close at VND15,000.

On the Ha Noi Stock Exchange, the HNX-Index edged up 2.3 percent to conclude the morning's session at 78.53 points with nearly 70 percent of all listed codes gaining.

The market value reached VND806.7 billion ($39 million), a 12.7 percent increase, on a volume of 67.4 million shares.

With 7 million shares exchanged, Kim Long Securities Co (KLS) was the most active code nationwide.



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