ASEAN KEY DESTINATIONS
Asean Stock Watch- September 28
Stocks rose for a third day on Tuesday on efforts by euro-zone officials to solidify the debt-ridden region's rescue fund, but sharp selling into the market's close highlighted investors' ongoing nervousness.
The Dow Jones industrial average finished up 146.83 points, or 1.33 percent, at 11,190.69. The Standard & Poor's 500 Index was up 12.44 points, or 1.07 percent, at 1,175.39. The Nasdaq Composite Index was up 30.14 points, or 1.20 percent, at 2,546.83.
But those gains were just half of what it had sported just a couple of hours prior to the close.
Stocks got a nice pop at the open as market participants took their cues from Europe, where the major bourses bounced to gains that ranged to almost 6 per cent amid hope that plans are being crafted to help restore the region's fiscal and financial conditions.
Broad-based buying had the stock market up almost 3 percent at its session high, but traders began to lean on stocks late in the session. Selling accelerated into the close, but a bit of buying in the final minutes kept stocks from settling at their session lows.
Financials fell the hardest. The sector had been up more than 3 per cent before its break down took it into negative territory. The sector managed to work its way back to a modest gain of 0.4 percent.
Goldman Sachs managed to eke out such a gain despite word that influential analyst Meredith Whitney cut her earnings estimate on the stock.
Stocks rebounded from a 12-month low on Tuesday after the central bank reportedly continued its intervention in the foreign exchange and bond markets to stop the value of Indonesian assets from declining further.
The Jakarta Composite Index advanced 157.80 points, or 4.8 percent, to close at 3,473.94, clawing back the previous day’s 3.2 percent decline. The benchmark ended Monday at its lowest since Sept. 7 last year.
More than 5.25 billion shares worth Rp 5.79 trillion ($648 million) were traded on the Indonesia Stock Exchange. Gainers outnumbered decliners, 247 to 23. Foreign investors returned to the market on Tuesday, with net buying of Rp 42 billion.
The rupiah and bonds rose after the government intervened. The rupiah edged up 0.7 percent to trade at 8,915 against the dollar. Indonesia’s 10-year bond yield fell to 7.20 percent on Tuesday from 7.25 percent on Monday in a sign of easing investor fears.
“This is purely a technical rebound because the market was oversold,” said Janson Nasrial, an analyst with AmCapital. “Government bond yields fell and the rupiah strengthened, all because of the central bank’s intervention.”
Bank Indonesia officials were unavailable to comment.
The International Monetary Fund, which provided more than $20 billion to Indonesia during the 1997-98 Asian financial crisis, backed the government’s intervention in the currency but advised it also to take action in the secondary bond market.
Discussing Indonesia at a briefing in Washington on Saturday, senior IMF adviser Mahmood Pradhan said that yields should be allowed to rise in the local bond market. “That is the volatility that foreign investors should be getting accustomed to,’’ he said.
On the Jakarta boards on Tuesday, Charoen Pokphand, the nation’s largest listed poultry company, surged 20 percent to Rp 2,425.
Kim Eng Securities on Tuesday issued a “buy” recommendation on the stock, with a target price of Rp 3,500. On Monday, Charoen secured $250 million in loans to fund its expansion.
Bank Mandiri and Bank Central Asia were among the mandated lead arrangers for Charoen’s loan facility, with each bank contributing $31 million to the loan. Bank Mandiri’s shares rose 8.2 percent to Rp 5,950, while Bank Central gained 2 percent to Rp 7,500.
Commodity-related shares were higher following a rebound in prices. Crude palm oil futures on the Malaysian exchange rose 1.2 percent on Tuesday to 2,947 ringgit ($936).
The agribusiness sector, which tumbled 6.5 percent on Monday, gained most of that back on Tuesday, rising 5.8 percent.
Astra Agro Lestari, the largest listed crude palm oil company, gained 3.2 percent to Rp 19,400, after falling 9.4 percent on Monday. Fellow producer London Sumatra Plantation jumped 8.5 percent to Rp 1,910.
Astra International, the nation’s largest auto distributor, rebounded 6.2 percent to Rp 60,550 after slipping to its lowest close in four months on Monday.
At Bursa Malaysia, advancers outpaced decliners 207 to 181 while 198 other counters were traded unchanged. There were 209.75 million shares traded with a total turnover of RM279.75 million. Bluechip stocks led gains on the local bourse with BAT up 40 sen to RM44.42 and DiGi gaining 26 sen to RM30.26.
Genting Malaysia added 12 sen to RM3.36, Gamuda was 12 sen higher at RM2.86, Bursa gained 11 sen to RM6.02 and Maybank added 9 sen to RM7.96.
Commodities continued to lose ground with Nymex crude oil in electronic trade down US$1.28 to US$83.17 per barrel at 10am.
Spot gold remained under downward pressure with the precious metal's prices fluctuating between US$1,633 to US$1,637 per ounce, losing between US$13 and US$17.
The ringgit was quoted at 3.147 to the US dollar and 4.274 to the euro.
The Philippine Stock Exchange on Tuesday missed out on a rally in global markets after trading was suspended because of Typhoon Pedring.
“Please be informed that trading today has been suspended due to lack of clearing facilities; government offices have been suspended, including the Bangko Sentral ng Pilipinas, due to inclement weather condition,” Hans Sicat, PSE president and chief executive, said in a statement.
“Also, there will be no SCCP clearing and settlement of trades today,” said Sicat, referring to the Securities Clearing Corp of the Philippines.
Work was also suspended at the PSE with corporate disclosures to be processed and published on the bourse’s website on Wednesday.
Puregold Price Club Inc. also postponed submission of the trading participants of the firm undertaking to purchase shares in its initial public offering.
Overnight, the Dow Jones Industrial Average shot up 272.38 points, or 2.53 percent to close at 11,043.86 on hopes that European officials would find a resolution to Greece’s debt. Asian stocks also bounced back from their lowest level since May 2010.
“Barring any negative leads overseas, prospective technical relief rallies might greet local stocks as some brave buyers take advantage of local mart’s cheap state during the previous sessions,” said Freya Natividad, investment analyst at 2TradeAsia.com.
“Large caps previous beaten by the rout might benefit, although some might seize on rallies to cash out,” Natividad added.
On Monday, the composite index plunged 164.74 points, or 4.24 percent to a one-year low of 3.721.22 on heightened risk aversion as recession fears prompted investors to aggressively cash out of the market.
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.
“So long as the market remains very volatile and all options remain relatively risky, one can opt to wait it out until it stabilizes,” said AB Capital Securities Inc.
“And because of the Europe debt crisis and Fed’s solution to swap long term securities with short term ones, the best decision might be prudence,” the brokerage added.
Net foreign selling was at P852 million as they dumped Philippine Long Distance Telephone Co., Lepanto Consolidated Mining Co., Philex Mining Corp., Metropolitan Bank & Trust Co., Bank of the Philippine Islands, SM Investments Corp., Alliance Global Group Inc. and Manila Electric Co. to bargain levels.
Besides Universal Robina Corp. and Jollibee Foods Corp., which held their support and refused to be sold down, most stocks responded sensitively to the global sentiment.
“We have identified significant stock bargains with PE ratios way below industry standards and investor expectations, yet today’s prices proved that market sentiment can greatly affect the perceived valuation of these stocks,” said AB Capital.
Singapore shares opened lower on Wednesday, with the benchmark Straits Times Index at 2,717.40 in early trade, down 0.31 percent, or 8.51 points.
Around 106.5 million shares exchanged hands.
Losers beat gainers 96 to 50.
The Stock Exchange of Thailand main index went up 42.56 points or 4.71 percent to close at 946.62 points at the end of trading session on Tuesday afternoon. The trade value was 35.93 billion baht, with 4.40 billion shares traded.
The SET50 index ended at 662.51 points, up 33.37 points or 5.30 percent, with a total trade value of 29.56 billion baht.
The SET100 index rose 70.68 points or 5.18 percent to stand at 1,435.81 points, with a total turnover of 33.07 billion baht.
The SETHD index went up 38.09 points or 4.26 percent to stand at 932.90 points, with total trade value of 11.17 billion baht.
The MAI index rose 6.28 points or 2.55 percent to close at 252.35 points, with total transaction value of 374.49 million baht.
Top five most active values were as follows;
PTT closed at 283.00 baht, up 16.00 baht (5.99 percent)
SCC closed at 286.00 baht, up 15.00 baht (5.54 percent)
PTTCH closed at 105.00 baht, up 10.50 baht (11.11 percent)
KTB closed at 16.40 baht, up 1.00 baht (6.49 percent)
BANPU closed at 562.00 baht, up 36.00 baht (6.84 percent)
The stock market on Tuesday continued to be affected by gold-related information. Despite a slight drop in domestic gold prices, they remained around VND4 million (US$193.2) higher than on the global market, ranging from VND45.1 million to VND45.2 million ($2,180) per tael (one tael equals 1.2 ounces).
"It means that money is still being poured into gold, increasing the need for dollars and pushing the exchange rate up on the free market," commented Sai Gon - Ha Noi Securities Co's analyst Le Trung Dung.
The State Bank's aim to control exchange rate fluctuation at 1 per \cent would also be affected, he added.
Meanwhile, the trade deficit in September was estimated at $1 billion, while the figure in August was just $395 million. "However, this number is not as bad as it may seem, since it was mostly caused by gold imports," stated Viet Capital Securities Co's analysts.
The trade deficit, if gold imports are excluded, was only $400 million, representing a 60 percent decrease compared to the same period last year. Analysts also reduced their forecast for this year's deficit from $12 billion to $10-11 billion.
Shares on the HCMC Stock Exchange were back in positive territory at the end of yesterday's session, after a morning of mixed fortunes.
The VN-Index closed up 0.7 percent to finish at 437.47 points.
Market value edged up 8.5 percent from Monday's close to VND697.1 billion ($33.7 million), with about 40 million shares changing hands. "The value of trades is an important factor to judge the trend of the market, but it did not improve much," Dung said.
"With the current upheavals of the global economy, investors should give priority to safe investment, buying in when trading is enhanced," he suggested.
Of the 10 leading shares by capitalisation on the southern bourse, insurer Bao Viet Holdings (BVH), which fell to its floor price in the previous session, rose the daily limit of 5 percent to reach VND71,500 per share. Five other codes managed gains of between 0.3 – 2.4 percent, but the remaining blue chips slumped from 0.6 – 1 percent.
Sacombank (STB) claimed the highest trading volume in HCM City, with 1.9 million shares exchanged.
On the Ha Noi Stock Exchange, the HNX-Index lost a further 0.08 percent to finish the session at 73.34 points.
The value of trades rose 32.3 percent against Monday to VND519.4 billion ($25.1 million) on a volume of 46.3 million shares.
Kim Long Securities Co (KLS) was the most active stock nationwide, with 5.8 million shares changing hands.
Foreign investors ended the day as net sellers, offloading combined net of VND29.6 billion ($1.4 million) on both bourses.
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