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ASEAN STOCK WATCH Asean Affairs   16 September  2011

Asean Stock Watch- September 16



U.S. stocks closed sharply up for fourth straight session overnight following news that major central banks across the world agreed to lend U.S. dollars to European banks, alleviating funding pressure for European banks.

The Dow Jones Industrial Average surged 186.45 points, or 1.66 per cent, to close at 11,433.18. The S&P 500 rallied 20.43 points, or 1.72 percent at 1,209.11. All 10 S&P sectors were higher, led by financials and energy.

Nasdaq surged 34.52 points, or 1.34 percent at 2,607.07, highest in six weeks. Gold at US$1,775.58 an ounce, while crude oil settled at $89.23 an ounce.


With the US economy in poor shape, the euro zone debt crisis worsening by the day and fears of inflation on the rise, the government is hurrying to calm investor fears.

Amid the global economic turmoil and market uncertainty, foreign investors are beginning to unwind their holdings in Indonesia, causing both the rupiah and the Jakarta Composite Index to falter in recent days.

The rupiah weakened slightly to Rp 8,760 against the greenback on Thursday while the Jakarta Composite Index fell 24.7 points to 3,774.33.

Finance Ministry data showed that foreign investors sold off Rp 5.3 trillion ($604.2 million) in debt paper in the last five days, with Rp 3.3 trillion sold on Wednesday alone. As a result, foreign holdings in the country dropped to Rp 245.9 trillion on Wednesday, after peaking at Rp 251.2 trillion on Sept. 9.

Hatta Rajasa, the coordinating minister for the economy, hastened to say that Indonesia’s economic fundamentals remained strong. “I think this is temporary,” he said. “It’s not about us.”

Finance Minister Agus Martowardojo said the government had prepared a stimulus package to be used in the first half of 2012 if the euro zone crisis dragged on into the new year.

Meanwhile, a possible move by Bank Indonesia to offset rising “hot money” inflows by lowering interest rates and easing monetary policy is worrying economists and businesspeople. The central bank indicated this week that it might ease monetary policy and cut the benchmark interest rate by 50 basis points from 6.75 percent, its level for the past seven months.

A lower interest rate, however, could hurt both the trade surplus and current account surplus, several economists said. With exports stagnating as a result of a strong rupiah and global economic growth slowing, the trade surplus has already fallen sharply over the past few months from a high of $3 billion.

Overall trade has so far managed to avoid falling into a deficit, with commodities making up 60 percent of the country’s current exports.

But the shrinking trade surplus has also impacted the country’s current account surplus, now just over $200 million in the second quarter, from more than $1.5 billion in the first quarter.

“Financial markets are mixed over the rate cut,” economist and analyst Mirza Adityaswara said.

Fauzi Ichsan, chief economist at Standard Chartered Bank, expressed a fear that core inflation, which excludes food and energy prices, could rise next year, especially if the government were to raise fuel prices.

“Under the current global economic conditions, if you cut interest rates, it will lead to higher inflation,” he said. “It is too early for a rate cut given the ongoing uncertainty.”


Asian markets closed mixed, amid some rising hope for the Greek economy, even though investor sentiment in general was still weak.

On Thursday, the FBM-KLCI fell 6.68 points to 1,430.93, ahead of Malaysia Day tomorrow. Turnover was thin, with only 729.27 million shares worth RM1.53bil being traded. Losers trumped gainers by 393 to 291, while 296 counters traded unchanged.

Shanghai's A share index fell 5.77 points to 2,479.05 due to concern about China's government tightening measures.

Singapore's Straits Times Index rose 25.83 points to 2,765.18, while Hong Kong's Hang Seng Index climbed 136.06 points to 19,181.50.

Tokyo's Nikkei 225 was up 150.29 points, to 8,668.86, Seoul's Kopsi Index gained 24.92 points to 1,774.08.

Crude oil prices were weaker, with the Nymex shedding a marginal US$0.38 to US$88.53 per barrel in the evening. Spot gold prices were also weaker at around US$1,813.30 per ounce, falling US$6.32 per ounce.

The ringgit weakened to 3.0912 per US dollar.


Most Philippine stock prices went up Thursday as investors started to see some light at the end of the tunnel with respect to debt default risks hounding Greece.

The main-share Philippine Stock Exchange index recouped 32.54 points or 0.76 percent to 4,291.40 as the market snapped up oversold stocks.

The property and mining/oil counters led the day’s upswing, respectively rising by 2.31 percent and 1.15 percent.

Turnover amounted to P4.66 billion. There were 91 advancers against 49 decliners while 45 stocks were unchanged.

The index was led higher by SM Prime, PLDT, BDO, SM Investments, ALI, Metrobank, AGI, BPI, Globe Telecom, Philex and Meralco. Non-index stocks Lepanto “A” (for local investors) and “B,” Union Bank, Manila Mining and Boulevard also gained in heavy trade.

On the other hand, the PSEi’s gains were tempered by the decline of EDC, Metro Pacific Investments and AEV shares.

Overseas sentiment improved as the leaders of Greece, France and Germany agreed that Greece was an “integral” part of the euro-zone. For its part, Greece vowed to swallow bitter pills to trim its debts in order to obtain more help from EU.


Singapore shares closed higher on Thursday, with the benchmark Straits Times Index at 2,765.95, up 0.97 percent, or 26.60 points.

About 1.3 billion shares exchanged hands.

Gainers beat losers 249 to 167.


The Stock Exchange of Thailand main index went up 13.25 points or 1.30 percent to close at 1,036.21 points at the end of trading session on Thursday. The trade value was 21.59 billion baht, with 2.88 billion shares traded.

The SET50 index ended at 721.34 points, up 10.00 points or 1.41 percent, with a total trade value of 16.91 billion baht.

The SET100 index rose 21.62 points or 1.40 percent to stand at 1,571.28 points, with a total turnover of 19.06 billion baht.

The SETHD index went up 10.65 points or 1.07 percent to stand at 1,004.12 points, with total trade value of 6.73 billion baht.

The MAI index went up 1.59 points or 0.55 percent to close at 292.10 points, with total transaction value of 461.60 billion baht.

Top five most active values were as follows;

BBL closed at 152.00 baht, up 4.50 baht (3.05 percent)

SCC closed at 311.00 baht, up 1.00 baht (0.32 percent)

PTT closed at 316.00 baht, up 4.00 baht (1.28 percent)

KBANK closed at 121.00 baht, up 2.50 baht (2.11 percent)

BANPU (XD) closed at 628.00 baht, up 18.00 baht (2.95 percent)


After Wednesday's sluggishness, the VN-Index took back 3.68 points, or 0.8 per- cent, to conclude at 470.67 points.

Trades during this morning's session were essentially unchanged from yesterday, reaching nearly VND1.3 trillion (US$62.8 million) on a volume of 70.6 million shares.

The increase of some bluechips helped lift the benchmark index, including insurer Bao Viet Holdings (BVH), software giant FPT (FPT) and food processor Masan (MSN), which all rose to their ceiling prices.

PetroVietnam Finance (PVF) also added 1.9 percent.

However, Vietinbank (CTG), Phu My Fertiliser (DPM), property developer Hoang Anh Gia Lai (HAG) and Vinamilk (VNM) tumbled between 0.8-3.1 percent.

Saigon Securities Inc (SSI) was the most active code on the southern bourse with 2.5 million of its shares exchanged. It finished up 1.9 percent to VND21,000 per share.

Meanwhile, on the Hanoi Stock Exchange, the HNX-Index retreated 1.2 percent, closing at 76.37 points.

Losers outnumbered gainers by 249-56.

The value of trades fell 34 percent compared to Wednesday's level of VND727.5 billion ($35.1 million). Trading volume also dropped 32 percent to just 64.6 million shares.

Kim Long Securities Co (KLS) was the most heavily traded code, with around 6.4 million of its shares changing hands, although it slid 2.3 percent to end at VND12,600.



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It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

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