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ASEAN STOCK WATCH Asean Affairs  12 September 2012

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By Shayne Heffernan Ph.D.

Since October 2007, when the Fed's policy committee began giving quarterly predictions for GDP growth and the jobless rate, the central bank has downgraded its nearer-term forecasts almost two-and-a-half times as often as it upgraded them.

The gap between Wall Street's expectations for 2012 growth and the Fed's own current view points to yet another downgrade on Thursday, when policymakers wrap up a two-day meeting that has world financial markets rapt.

The trend of back-pedaling shows how poorly the central bank has fared at reading the economic tea leaves, with the Fed's optimism a likely factor in policy decisions through the Great Recession and its fallout, economists say.

Policy makers and economists predicted on Tuesday that the sovereign debt crisis will continue to cast a shadow over the European economy, but called for confidence in the euro.

The eurozone crisis is stabilizing and risks are decreasing in the region's fiscal and monetary systems as well as in its financial markets, but the risks to economic growth are rising, International Monetary Fund (IMF) Deputy Managing Director Zhu Min told reporters on the sidelines of the 2012 Summer Davos Forum in north China's Tianjin.

Deterioration in the European economy will have a huge impact on the global economy as Europe is one of the world's largest economies and accounts for one third of value-added exports to Asia, Zhu said.

"We should talk more about the growth side, not the financial side (of the eurozone crisis)," he told a panel discussion during the forum.

In the worst-case scenario, a more disastrous situation in Europe could lead to a 1.5 percent-2 percent growth cut in the United States and a 1 percent-1.5 percent cut in China, as IMF models showed, according to Zhu.


While Singapore continues to grow, the Government stands ready to act if the economy hits a downturn, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam in Parliament today.

He elaborated that specific measures and the level of Government risk-sharing with businesses and banks would depend on the severity of the downturn.

Mr Tharman said: "The Ministry of Trade and Industry expects the Singapore economy to grow by 1.5 to 2.5 per cent for the whole of 2012.

"Nevertheless, I can assure members that we are monitoring the downside risks to Singapore's economic and financial stability very closely. The government stands ready to provide assistance to businesses and workers should there be a more significant economic downturn."

Mr Tharman was responding to Nominated MP Teo Siong Seng, who asked whether the Finance Ministry will implement extraordinary financing measures like the Special Risk-Sharing Initiative (SRI) introduced as part of the resilience package launched during the financial crisis in 2008/2009.

The Government had taken up 80 per cent of the risk share for the bridging loan programme to help SMEs in the event the economy goes into a tailspin.


Thailand plans to introduce a bill letting it borrow 2.2 trillion baht ($70.8 billion) for infrastructure projects over the next seven years, the finance minister said on Monday.

Even with the increased borrowing, to boost the economy following last year's devastating floods, the government still aims for a balanced budget in 2017, Kittirat Na Ranong told a briefing.

Earlier, the plan was to borrow 1.6-2.0 trillion baht, but the amount has been increased to include utilities and telecommunications project, he said.

"With the current fiscal position, there is room to invest in long-term infrastructure projects to increase the country's competitiveness," the minister said.

A bill on the borrowing is under preparation before approval is sought from the cabinet and parliament, Kittirat said. He did not give details about the timeframe and how the money would be raised.

Kittirat said public debt was still low at 43.34 percent of gross domestic product, below its legal limit of 60 percent.

In February, the government pushed through an emergency decree to borrow 350 billion baht for water management projects after the floods in late 2011 that dragged economic growth down to just 0.1 percent for last year. The central bank has forecast the economy will grow 5.7 percent this year.


Philippine exports grew faster in July after a slowdown in the previous month but a downtrend was reported in electronics.

Outbound shipments increased 7.8 percent in July from a year earlier as growth in export items like metal components and activated carbon offset a sharp drop in electronics and seminconductors.

The July export figure marked an improvement from 4.3 percent in June.

According to the National Statistics Office, exports in July registered $4.807 billion in receipts, higher than $4.460 billion reported in the same month last year.

Electronics, which accounted for about a third of revenue in July went down 25.6 percent to $1.675 billion from $2.253 billion registered in July 2011.

Semiconductors, which make up bulk of electronic exports, earned $1.344 billion in July, down 12.1 percent from $1.529 billion a year ago.

Month-on-month, exports went up 11.4 percent from $4.314 billion in June.

Aggregate exports from January to July rose 7.7 percent to $31.564 billion from $29.306 billion during the same period last year.


KLCI index lost 6.80 points or 0.42% on Tuesday. The Finance Index fell 0.79% to 14367.87 points, the Properties Index dropped 0.72% to 1015.97 points and the Plantation Index down 0.11% to 8374.53 points. The market traded within a range of 17.30 points between an intra-day high of 1618.61 and a low of 1601.31 during the session.

Actively traded stocks include INGENS, MAYBANK, INGENS-WA, CIMB, TANCO, NEXTNAT, AIRASIA, UTOPIA, ASUPREM and THHEAVY. Trading volume increased to 961.10 mil shares worth RM1789.42 mil as compared to Monday’s 876.44 mil shares worth RM1440.18 mil.

Leading Movers were IOICORP (+8 sen to RM5.07), PETCHEM (+11 sen to RM6.39), GENTING (+5 sen to RM8.98), SIME (+1 sen to RM9.80). Lagging Movers were CIMB (-12 sen to RM7.28), TENAGA (-12 sen to RM6.63), HLBANK (-36 sen to RM13.00), MAXIS (-9 sen to RM6.78) and PPB (-32 sen to RM12.68). Market breadth was negative with 199 gainers as compared to 604 losers.

Yesterday in Asia

Tokyo fell 0.70 percent, or 61.99 points, to 8,807.38, Sydney closed 0.18 percent, or 8.0 points, lower at 4,325.8 and Seoul lost 0.24 percent, or 4.70 points, to close at 1,920.00.

Shanghai ended down 0.67 percent, or 14.34 points, at 2,120.55 but Hong Kong staged a late rally to close 0.15 percent higher, adding 30.71 points to 19,857.88.

– Taipei edged up 2.39 points, or 0.03 percent, at 7,485.13.

Taiwan Semiconductor Manufacturing Co. rose 1.08 percent at Tw$84.4 while Hon Hai Precision added 1.80 percent at 90.4.

– Manila ended flat, nudging down 4.76 points to 5,186.05.

BDO Unibank eased 0.59 percent to 59.25 pesos and Megaworld fell 1.37 percent to 2.16 pesos.

– Wellington closed up 0.48 percent, or 18.05 points, at 3,744.96.

Fisher & Paykel Appliances was up 7.22 percent at NZ$1.04.

– Singapore closed 0.26 percent, or 7.68 points, higher, at 3,016.40.

Fraser and Neave rose 1.29 percent to Sg$8.66 and Singapore Airlines fell 0.28 percent to Sg$10.52.

– Kuala Lumpur lost 6.80 points, or 0.42 percent, to end at 1,614.24.

Malayan Banking shed 0.22 percent to 9.15 ringgit, while CIMB Group Holdings declined 1.62 percent to 7.28. Felda Global Ventures Holdings gained 1.07 percent to 4.73 ringgit.

– Bangkok fell 0.21 percent, or 2.61 points, to 1,248.32.

Coal producer Banpu fell 2.69 percent to 434 baht, while PTT lost 0.61 percent to 327 baht.

– Jakarta closed 0.13 percent lower, or 5.30 points, at 4,155.36.

Carmaker Astra International fell 2.0 percent to 7,250 rupiah, Bank Mandiri declined 1.9 percent to 7,750 rupiah, while coal company Indika rose 2.0 percent to 1,540 rupiah.

– Mumbai rose 0.49 percent, or 86.17 points, to 17,852.95.

India’s private housing finance firm HDFC increased 2.49 percent to 758.1 rupees. The country’s largest private iron-ore producer Sesa Goa fell 5.81 percent to 159.8 rupees.


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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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

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.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


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