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ASEAN STOCK WATCH Asean Affairs  11 September 2012

ASEAN Equity Preview

By Shayne Heffernan Ph.D.

Stocks retreated as investor wariness about the outlook for the EU debt crisis, in particular Greece, offset hopes that the US central bank will act decisively later this week to bolster the world's biggest economy.

The battle in Greece continues as the country is trying to secure its next tranche of an international bailout amid falling short of meeting the requirements. Greek political leaders have yet to agree on where to make further spending cuts.

In Germany, Chancellor Angela Merkel won political support for her support for the ECB's plan to buy bonds of some of the most indebted EU members to stabilise financial markets.

The support comes a day before Germany's constitutional court will rule on the legality of the EU's proposed rescue fund. While the court is expected to approve Germany's participation in the fund, it also is expected to limit future moves by the government.


PTT Plc has reaffirmed its financial capability as adequate for new mergers and acquisitions for both conventional and unconventional petroleum resources.

"We have a debt-to-equity ratio of only 0.5, and it is not that difficult for us to find new funds through loans, self-financing, retained earnings and debentures," said Surong Bulakul, chief financial officer of the national oil conglomerate.

"So there is no need to raise registered capital," he added.

According to Mr Surong, PTT is cautious about every project it acquires, trying its best to steer clear of high-risk projects.

For Cove Energy, which was snapped up by PTT Exploration and Production Plc (PTTEP), PTT's exploration unit, for US$2.2 billion, Mr Surong said PTT believes the project is worth investing given Cove's large proven reserves of natural gas.

"We expect the deal will help enable us to produce liquefied natural gas at relatively low costs, so we are committed to the Cove deal. More importantly, it's our obligation to procure LNG to cater to growing Thai demands."

He admitted, however, that all affiliated firms are set to jointly plan funding management if PTTEP has large projects to be acquired which need to raise massive funding.


Singapore Airshow 2012 contributed over S$254.5 million worth of direct spending to Singapore's economy in tourism receipts, hospitality, event and personal spending, accrording to a study by Kadence International.

Of this, over S$219 million was from foreign exhibitors, trade and public visitors, it said.

The biennial Singapore Airshow is Asia's largest and one of the three most important aerospace exhibitions in the world.

This year's event, from Feb 14-19, 2012 attracted over 135,000 attendees.

It attracted 44,801 trade attendees with 30 per cent from overseas.

The two public days also attracted 90,301 visitors, of which nine per cent were foreign. In total, the airshow attracted some 22,000 foreign visitors.

Of the foreign exhibitors, nearly a quarter (23 per cent) stayed in Singapore for over 10 days to leverage on the networking and business opportunities in the region.

The Kadence study also established that the airshow generated nearly S$120 million of foreign revenue among Singapore-based stand-building contractors, freight forwarders and food and beverage caterers.

Jimmy Lau of Experia Events, organiser of the airshow, said he was delighted that the airshow has had such a positive impact on Singapore's economy, with 86.2 per cent of revenue generated coming from overseas attendees.

"This strong showing is testimony to Singapore Airshow's position and relevance not only as a premier platformfor networking and business opportunities in the global aerospace industry calendar, but also as an important contributor to the meetings, incentives, conventions and exhibitions industry in Singapore," he said.

Over US$31 billion worth of deals were announced at the airshow.

The airshow returns from Feb 11-6, 2014 at Changi Exhibition Centre.


 "We need to do more, judging from the potentials especially from China, with huge economic and financial potentials.” Imron Cotan, Ambassador of the Republic of Indonesia to the People's Republic of China, said during an exclusive interview with 21CBH. China's investment in Indonesia has amounted US$ 1.2 billion in 2011.

The Master Plan for the Acceleration and Expansion of Indonesia's Economic Development has provided more opportunities for Chinese investors. Chinese companies have expressed strong interests in the megaproject Sunda Strait Bridge which will start in 2014.

Cotan is confident that Indonesia is one of the selected few countries for Chinese investors to come and invest, especially in this economic and financial crisis. “If I were an investor, I will go to Indonesia." he said.

Philippines - Peso

The peso inched up to a new four-year high on Monday as market expectation of a third round of “quantitative easing” by the US Federal Reserve boosted appetite for emerging-market securities.

The local currency closed at 41.615 against the US dollar, up by 6.5 centavos from Friday’s finish of 41.68:$1.

Intraday high hit 41.54:$1, while intraday low settled at 41.62:$1. Volume of trade amounted to $804.5 million from $883.46 million previously.

Traders said the appreciation of the peso was triggered by the expectation of the market that the US Federal Reserve would implement a third round of stimulus, called QE3 (third quantitative easing), to boost the still lackluster performance of the US economy.

Quantitative easing is done by the US Fed’s buying of bonds to infuse money into the US economy.

Although infusion of funds by the US Fed is meant to boost growth of the United States, fund owners believe that portions of the liquidity could spill over to emerging markets like the Philippines. In particular, recipients of the cash from the US Fed may use it to buy emerging-market assets.

Given this backdrop, fund owners see another round of stimulus raising demand for emerging market assets, thus causing appreciation of emerging market currencies.

Wanting to take advantage of the income potential from an expected appreciation of emerging market currencies, fund owners actually buy securities denominated in these currencies. As a result, currencies indeed appreciate.

The rise of the peso against the US dollar on Monday came with the appreciation of other Asian currencies against the greenback.

“The appreciation today was due to the stimulus bets on the US dollar,” Jonathan Ravelas, market strategist for Banco de Oro, told the Philippine Daily Inquirer.

Ravelas said the peso would likely hover between 41.6 and 41.8 against the US dollar in the coming days until the US Fed’s announcement of a QE3.

Speculation that the US Fed may implement another round of stimulus measure came following the release of a report that US payroll increased in August by 96,000, which was below most forecasts.

Unfavorable employment situation in the United States is one of the factors supporting the view that the US Fed may eventually be forced to implement QE3.

Tokyo ended flat, dipping 2.28 points to 8,869.37, with a slightly stronger yen compounding figures showing the Japanese economy grew at a slower pace than initially thought.

Seoul was 0.25 percent down, or 4.88 points, at 1,924.70 while Sydney climbed 0.18 percent, or 8.0 points, to 4,333.8.

Hong Kong finished 0.13 percent higher, adding 25.01 points to 19,827.17 while Shanghai gained 0.34 percent, or 7.13 points, to 2,134.89.

– Singapore closed 0.10 percent, or 2.98 points, lower at 3,008.72.

Singapore Airlines rose 0.38 percent to Sg$10.55 and DBS Group Holdings advanced 0.76 percent to Sg$14.54, while Fraser and Neave gained 1.58 percent to Sg$8.38 and Oversea-Chinese Banking Corp. advanced 1.96 percent to Sg$9.35.

– Taipei closed 0.78 percent, or 57.83 points, higher at 7,482.74.

Taiwan Cement gained 4.0 percent to Tw$35.10 while Formosa Plastics was 1.47 percent higher at Tw$82.7.

– Manila closed 0.20 percent lower, slipping 10.51 points to 5,190.81.

Gold-producer Philex Mining fell 8.14 percent to 15.80 pesos while Alliance Global Group gained 1.12 percent to 12.64 pesos.

– Wellington rose 0.13 percent, or 4.72 points, to 3,726.90.

– Jakarta climbed 0.41 percent, or 16.98 points, to 4,160.66.

Car maker Astra International rose 4.2 percent to 7,400 rupiah, consumer goods producer Unilever jumped 1.3 percent to 28,350 rupiah and mining company Aneka Tambang increased 2.4 percent to 1,280 rupiah.

– Kuala Lumpur fell 0.22 percent, or 3.51 points, to 1,621.04.

UEM Land Holdings lost 3.4 percent to 1.73 ringgit and Genting Malaysia gained 1.7 percent to close at 3.55 ringgit.

– Bangkok rose 0.39 percent, or 4.83 points, to 1,250.93.

Medical services firm BGH dropped 2.30 percent to 106 baht, while PTT lost 0.30 percent to 329 baht.

– Mumbai edged up 0.10 percent, or 17.13 points, to 17,766.78.

Shayne Heffernan Ph.D.  

Linda Johnson, Business Development Director - Private Client Group, Heffernan Capital Management
3 Raffles Place #07-01
Bharat Building Singapore 048617
Tel: +65 6329 6408 Fax: +65 6329 9699
Email :
Suite 53 Athenee Tower
63 Wireless Road, Lumpini, Pathumwan, Bangkok 10330
New York 347 5th Avenue, Suite 1402-508 NY, NY 10016


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