ASEAN KEY DESTINATIONS
Asean Stock Watch- September 27
U.S. markets reacted positively, finishing more than 2 percent higher on Monday <.DJI> <.SPX>, and the mood continued in Asia, where Tokyo's Nikkei <.N225> rose 2.8 percent, coming off its lowest close in more than two years.
S&P 500 index futures rose 0.4 percent.
The Jakarta Composite Index rose 143.98 points, or 4.3 percent, to 3,460.12 at the Tuesday midday break, mirroring gains across the region amid optimism that European leaders will take steps to alleviate debt problems from worsening in the euro zone.
Share prices ended the Tuesday morning session higher after rebounding from yesterday's steep losses, in line with the recovery on Wall Street and on renewed hopes that European officials will take bold steps to resolve the debt crisis in Europe, dealers said.
At the mid-day break, the FTSE Bursa Malaysia KLCI (FBM KLCI) finished 21.63 points higher at 1,353.43 after opening 7.55 points better at 1,339.35.
HWANGDBS Vickers Research, in its research note, said the oversold FBM KLCI could stage a moderate technical rebound following a 142.3 points tumble or 9.7 percent decline since the beginning of the month.
The Finance Index surged 279.88 points to 12,349.50, the Plantation Index increased 76.77 points to 6,783.73 and the Industrial Index gained 20.31 points to 2,482.76.
The FBM Emas Index climbed 148.60 points to 9,121.81, the FBM70 Index rose 192.03 points to 9,500.37, the FBMT100 advanced 151.22 points to 8,976.39 and the FBM Ace added 36.82 points to 3,518.63.
Gainers outnumbered losers 474 to 186 while 221 counters were unchanged, 604 untraded and 33 others were suspended.
Turnover stood at 406.4 million shares worth RM669.7 million.
Actives, Tiger Synergy gained one sen to 12 sen, SAAG Consolidated was unchanged at five sen, GPRO Technologies perked one sen to 13.5 sen and UEM Land Holdings added seven sen to RM1.65.
Heavyweights, Maybank advanced 32 sen to RM7.83, CIMB Group Holdings increased 16 sen to RM6.86, Sime Darby rose three sen to RM8.08 and Petronas Chemicals perked 17 sen to RM5.48.
Philippine share prices on Monday fell to a one-year low on heightened risk aversion as recession fears prompted investors to aggressively cash out of the market.
At the Philippine Stock Exchange, the composite index fell 164.74 points, or 4.24 percent to 3.721.22, its lowest close since September 2, 2010.
The broader all-shares index lost 81.72 points, or 2.94 percent to 2,700.58.
A total of 5.28 billion stocks worth P9.39 billion changed hands. Decliners dominated advancers, 171 to 23, while 24 stocks were unchanged.
“Bearish movement continued as buyers bid for time for local barometers to stabilize, after it cracked below the psychological 4,000 zone,” said Freya Natividad, investment analyst at 2TradeAsia.com.
“Equity prices continued to get a beating as markets in Asia opened a week of trading amid elevated risks as a satisfactory and acceptable solution to the Greece crisis remained elusive,” said Jun Calaycay of Accord Capital Equities Corp.
The PSE index has shed 829.31 points, or 18.22 percent from its high of 4,550.53 on August 1. It has lost 11.40 percent year to date.
The benchmark index opened 14.40 points higher through the first 15 minutes, but the lack of sufficient cues from the fundamental side prompted the benchmark to give in to negative pressure, joining its Asian peers in the red.
Prior to making aggressive buying, most will check on the extent of supply pressure in the region because downside may still occur, said Natividad.
Also fuelling fears was a fresh statement from the International Monetary Fund that it does not have sufficient funds to aid ailing Euro zone economies, Calaycay said.
“The risks are very much evident, not only in terms of the pervasive sentiment but in the numbers and recent developments as well. The over-all view is that things may get even worse before it gets better,” he added.
Immediate support is at 3,700 while long-term support is at 3,640, represented by the first Fibonacci retracement line measured off the bear low to the record high close.
While aggressive buying is not advised, Calaycay said current equity prices are inviting for consideration over a long-term portfolio. Valuations are down with price to earnings ratio at 12.74x against Friday’s 13.32x and the 10-year average of 15 to 16x.
Regional currencies remained volatile Monday as investors believed Greece would default on its debts, which economists said has the potential to worsen a global downturn.
At the Philippine Dealing System, the peso shed 29 centavos to close at 43.870 against the US dollar compared with 43.580 last Friday.
The dollar-peso pair opened at 43.70 with bids moving to a high of 43.890 to a low of 43.670. Total trading volume reached $883.200 million.
Traders said the central bank might have sold at least $150 million today.
In a commentary, Development Bank of Singapore noted that Asian central banks are “now visibly less tolerant of the sharp sell-offs in their currencies.”
“While they have signaled a pause in hiking rates from global growth worries, Asian central banks have not signaled rate cuts either because inflation data has yet to ease. Markets are no longer as short dollars as they were two to three weeks ago. While no one dares venture to say that the worst is over, the market is unlikely to stay a one-way bet in buying dollars too,” Asia’s biggest lender said.
The dollar-peso pair is expected to trade at the 43.50 to 44 range within the week, with the BSP present to smoothen the sharp movement.
Singapore shares were higher at 12.44 p.m. on Tuesday, with the benchmark Straits Times Index at 2,690.47, up 1.36 percent, or 36.16 points.
About 601.8 million shares exchanged hands.
Gainers beat losers 264 to 91.
The Stock Exchange of Thailand (SET) Index gained as much as 28 points. It ended the Tuesday morning session with an 18.56 points or 2.05 percent gain, to 922.62 points.
Yesterday, the SET nosedived as much as 9.42 percent before closing with a narrower loss of 5.65 per cent as European bourses edged up on anticipation of good news in solving the public debt crisis. There were reports that Germany would endorse the expansion of the European Financial Stability Facility (EFSF) this weekend while the European Central Bank would cut the interest rate.
Bad news is lingering, including the expectation of huge recapitalisation of banks in Germany, France and the US as well as the chance of double-dip recession in both continents next year.
Tisco Securities expects the SET Index to move in the range of 870-985 points in October. While the index could rise as investors bet on listed companies' quarterly earnings, bad news overseas could pull down the market.
It noted that if the index breaches 990 points in November, there is a 20 percent chance that it could end the year at 1,060 points. On the contrary, if the index falls below 965 points (50 percent chance), it could slip further to 760 points at the end of the year.
Shares opened in the red for their first session of the week yesterday, with the VN-Index losing 1.3 percent from last week's close to end the day at 434.43 points.
Volume on the HCM Stock Exchange was sluggish, with only 35.3 million shares exchanged, and the value of trades dropped 10.2 percent to just VND642.6 billion (US$31 million). Decliners outnumbered advancers by 144-81.
None of the 10 leading shares by capitalisation posted gains. Only Sacombank (STB) and real estate developer Vincom (VIC) managed to close unchanged.
On the Ha Noi Stock Exchange, the HNX-Index retreated by nearly 1.6 per cent to conclude the session at 73.40 points, with losers far outnumbering gainers. The value of trades only reached VND392.5 billion ($19 million) on a volume of 35.4 million shares, a decline of 6 per cent in value and 3.5 per cent in volume.
Kim Long Securities Co (KLS) continued as the most-active code nationwide, with 2.9 million shares changing hands.
Foreign investors were net sellers on both bourses for a fifth consecutive session, picking a combined net of VND116 billion ($5.6 million) worth of shares.
Global markets collapsed late last week on disappointment with US Federal Reserve measures to combat the economic slowdown. Metals, foreign currencies and commodities also dropped, with the domestic gold price easing yesterday by about VND2,000 per tael to VND45.5-45.6 million (around $2,200) (One tael equals 1.2 ounces.)
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