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ASEAN STOCK WATCH Asean Affairs  19 September 2012

ASEAN Market Preview

By Shayne Heffernan Ph.D.

Doubts grew over Spain's willingness to ask for an aid package, raising new concerns about Europe's debt crisis and the euro, while bellwether FedEx cut its profit forecast, darkening the corporate earnings outlook.

In addition, the Swiss government cut its growth forecast for this year and next.

Equities are coming off strong gains last week, when the Federal Reserve promised to keep pumping money into the U.S. economy and the euro zone's bailout fund got crucial backing from a German court. The Standard & Poor's 500 Index climbed to multi-year highs while European shares reached a 14-month peak.

Economist Shayne Heffernan says best buys are Genting Hong Kong, Trai Thien Singapore, Garuda, Sarawak Energy

Garuda Indonesia

National airline Garuda Indonesia has stepped up its efforts to promote itself in China, keen to tap into the growing tourism market in the world’s most populous nation.

Garuda president director Emirsyah Satar said the airline plans to replace its Boeing 737s with Airbus planes for its routes to China in order to add more passenger capacity. Garuda flies from Jakarta to Beijing, Shanghai and Guangzhou.

“With bigger planes, there will be more Chinese tourists that can be flown to Indonesia,” Emirsyah said.

According to the World Tourism Organization, around 70 million Chinese tourists spent $70 billion abroad last year.

According to Indonesian government data, 775,000 tourists from China visited the archipelago last year, up from 200,000 in 2010.

Imron Cotan, Indonesia’s ambassador for China, told Antara news agency that next year the number of visitors could top 1 million.

He said strong economic growth in China would fuel demand for overseas trips.

Emirsyah said that Garuda was evaluating the passenger occupancy rate of its flights to China, which currently stands at 83 percent.

The airline is conducting a “Garuda Travel Fair” in the three Chinese cities from which it flies.

On Sunday, Emirsyah and Imron inaugurated a Garuda billboard, measuring 2 meters by 4 meters, outside the Indonesian embassy in Beijing.

“Of the many Indonesian embassies overseas, only the Beijing embassy puts up a Garuda billboard, as the national carrier,” Imron said.

The billboard has a LED screen featuring five videos presenting information on Indonesia’s tourist attractions, including Borobudur temple in Central Java and Lake Toba in North Sumatra. Other videos preview Garuda’s domestic services and international routes.

Garuda, which operates 92 aircraft, in April inked a $2.5 billion agreement to purchase 11 A330-300 planes from European manufacturer Airbus during the visit of British Prime Minister David Cameron.

The airline carried 10.02 million passengers in the first seven months of the year compared with 8.64 million in the same period a year earlier, it said.

Shares in Garuda fell 3 percent to Rp 600 in Monday trading in Jakarta. The shares are up 26 percent since the start of the year.

Trai Thien USA Inc (OTC Markets:TRTH)

Trai Thien USA Inc (OTC Markets:TRTH), through its subsidiary Trai Thien Logistics, announced that it is planning to establish Singapore as a new Shipping and Trade Hub for the Company to expand ahead of the formation of the ASEAN Economic Community (“AEC”) in 2015. The AEC is ASEAN’s most resolute step to date to transform the region into a single market and production base by 2015.

The Port of Singapore is the busiest in the world, surpassing Rotterdam and Hong Kong. In addition, Singapore’s port infrastructure and skilled workforce, due in part to the success of the country’s education policy in producing skilled workers, is also fundamental in providing easier access to markets for both importing and exporting.

Trai Thien currently has six vessels operating at full shipping capacity. The six vessels realized 26 trips in the first quarter 2012, and are projected to make a total of 120 intra-regional voyages for the 2012 fiscal year. When factoring in down time for scheduled maintenance and repairs, a TRTH vessel completes a commercial voyage every 18 days on average. The full operational capacity status reflects the ability of Company management to fulfill its long-term plan of becoming a key player in inter-ASEAN cargo shipping.

Year-end 2011 revenues increased over 20.9% as compared to the previous fiscal year, from $12,232,991 in 2010 to $14,794,939 in 2011.
Income from Operations increased over 148% from 2010 to 2011, from $1,051,543 to $2,615,000.

Net Income increased from a loss of $539,452 in fiscal 2010 to a positive $1,377,391 in 2011.

The Company is operating a 21,990 DWT fleet comprised of six geared bulk vessels specialized in providing ocean transportation services for raw material input items such as coal, ore, grain, lumber, cement, steel and fertilizer throughout the Southeast Asia region.

The new Singapore Hub is expected to add to the capacity of Trai Thien beginning in late 2012 and early 2013.

Genting Hong Kong

A group led by taipan Andrew Tan is investing $550 million to complete by 2016 the first phase of Resorts World Bayshore City at the Entertainment City, a new entertainment hub that builds on the group’s success in operating the country’s first privately run gaming complex in Newport City.

The Bayshore complex is a project of Travellers International, a partnership between Tan’s Alliance Global Group Inc. (AGI) and Genting Hong Kong Ltd. It will be the last to open among the four licensees of the state-owned Philppine Amusement and Gaming Corp. in the Entertainment City but this could be an opportunity to top all earlier constructed facilities in the area, AGI president Kingson Sian said in a briefing after AGI’s stockholders’ meeting on Tuesday.

Sian said the master plan for Bayshore has been completed and it would feature two hotels—a luxury hotel and a five-star hotel offering a total of 800 rooms, a 3,000-seater grand opera house, a shopping mall, residential towers and a gaming area that would be double the size of Travellers’ existing facility in Newport City across from the Ninoy Aquino International Airport Terminal 3.

At 31 hectares, the Bayshore gaming complex is more than double the pioneering Resorts World Manila in Newport City (12 hectares) and will comprise about a third of the 90-hectare Pagcor City. The first phase of Bayshore development would occupy about 16 hectares, Sian said.

Beyond the first phase that will be completed by 2016, Bayshore is envisioned to be a themed tourism estate with about 3,500 hotel rooms alongside leisure, retail, gaming and entertainment facilities. Total project cost is $1.1 billion.

Tan told stockholders that Bayshore was “poised to be another world-class venue for entertainment and recreation.” The project is seen to not only promote local and international tourism but also significantly contribute to the country’s economic development by creating more than 100,000 direct and indirect jobs.

Sarawak Energy

Sarawak Energy Bhd will start the construction of its 500-kilovolts (Kv) backbone transmission system, with an investment of RM3 billion, to reinforce the infrastructure along the state from Bintulu to Kuching soon, its chief executive officer Torstein Dale Sjotveit said today.

He said the project would be finished in stages from late 2014 to late 2015.

"Sarawak Energy has now signed firm agreements with Tokuyama, Asia Minerals, Press Metal, OM Holdings and PLN (Persero) from Indonesia for a combined total of 1,800-megawatts (MW) and also term sheet agreements with a further three customers for an additonal 600 megawatts," he said at the official opening of the new Sarawak Energy headquarters at the Kuching Isthmus here by Chief Minister Tan Sri Abdul Taib Mahmud.

"This means that the entire firm output of both Bakun and Murum dams have been sold to solid industries at attractive prices and with reasonable inflation clauses," he said, adding that the Murum project, which was now 75 per cent completed, would start production by early 2014.

He said its new big project, the Balingian 600-MW coal fired plant, in Mukah area was due to commence construction next year with production to start in late 2015.

Only a small amount of power from the plant at Balingian remains available for sale, he said.

Competition for that power among potential customers is now fierce, he added.

Tokyo rose 0.15 percent by the break, Sydney fell 0.20 percent, Seoul lost 0.10 percent and Shanghai gave up 0.35 percent while Hong Kong was flat.

Investors were taking a step back after the Fed on Thursday said it would start a third round of bond-buying, known as quantitative easing (QE3), in a bid to jumpstart the US economy.

The announcement, which followed a European Central Bank plan to buy the debt of under-pressure eurozone nations, had injected global markets with some much-needed risk appetite on Friday.

But profit-taking on Wall Street Monday was fuelled by data showing the Fed’s Empire State manufacturing index for the New York region fell for a second straight month in September.


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.

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