Feb 15, 2013

ASEAN - ASEAN Stocks Preview

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It is slow trading in Asia as the New Year festival continues,

The Philippines is likely to outperform consensus growth forecasts this year with the political and reform environment looking ripe for the implementation of more changes and the world economy appearing to be on the mend, New York-based think tank Global Source said.

But behind the surging confidence, the think tank said there were emerging questions about the sustainability of the economy’s growth as the unresolved crisis in the West meant that the country would have to rely on internal sources of growth.

In a Feb. 10 commentary dated “High on Snake Blood” written by economists Romeo Bernardo and Marie-Christine Tang, Global Source projected the Philippines gross domestic product (GDP) growth at 6.1 percent this 2013, upgrading its previous forecast of 5 percent. This upgraded forecast is more optimistic than the 5.6 percent consensus forecast based on FocusEconomics Consensus Economics albeit slower than the actual 6.6 percent attained by the country last year.

The slightly slower growth seen for this year factors in weak external growth and a strong local currency weighing down on exports.

For 2014, Global Source expects a growth of 5.8 percent versus the 5.7 percent consensus forecast.

Local stocks started the first trading day of the Year of the Water Snake with a bang, allowing the main index to touch 6,500 for the first time, before retreating at close.

The main-share Philippine Stock Exchange index ended 0.66 points or 0.01 percent lower at 6,458.01 after hitting a new record intra-day peak of 6,500.08.

“Now, we cannot discount the fact that the market may either pause or do a slight pullback, say close to 6,200 (- 4.6 percent) or a bear-case scenario close to psychological support at 6,000 (- 7.7 percent),” said DA Market Securities in its research note issued on Monday.

The PSEi has risen by three times since bottoming out in 2008 during the US-epicentered global financial crisis.

The Stock Exchange of Thailand main index lost 8.19 points, or 0.55%, to close at 1,489.11 points at the end of trading session on Monday afternoon. The trade value was 49.55 billion baht, with 14.88 billion shares traded.

The SET50 index ended at 986.18 points, down 9.72 points, or 0.98%, with a total trade value of 19.46 billion baht.

The SET100 index fell 17.49 points, or 0.79%, to stand at 2,201.05 points, with a total turnover of 30.97 billion baht.

The SETHD index went down 14.03 points, or 1.09%, to stand at 1,269.85 points, with total trade value of 9.02 billion baht.

The MAI index dropped 5.39 points, or 1.19%, to close at 447.05 points, with total transaction value of 2.84 billion baht.

Top five most active values were as follows;

BLAND stood at 2.02 baht, up 0.10 baht (5.21%),

BMCL stood at 1.66 baht, up 0.26 baht (18.57%),

PTT stood at 347.00 baht, down 3.00 baht (0.86%),

UMI stood at 17.90 baht, up 2.00 baht (12.58%), and

TRUE stood at 7.15 baht, up 0.25 baht (3.62%).

The outlook on Indonesia’s stock market remains positive at JP Morgan Equity Research, which raised its recommendation on the market, even as the benchmark stock index slipped from a record high.

The securities firm upgraded Indonesia’s market rating to overweight, citing improved thermal coal and palm oil prices, stable economic momentum and attractive fundamentals. The overweight rating suggests that investors hold more shares in Indonesia in their model portfolio.

“Our commodity team forecasts stabilization in coal and palm oil prices. J.P. Morgan’s economics team forecasts a current account surplus in 2013. The key assumptions are lower refined petroleum product imports and higher gas exports,” the research house said on Friday. “The consensus is more optimistic.”

With this upgrade, Indonesia joins India, Thailand and the Philippines as countries that have an overweight rating from JP Morgan. South Korea, Taiwan, Singapore and Australia are rated underweight.

“As is the situation in our other EM overweights [India, Mexico, Thailand and the Philippines] ex Turkey, we think Indonesia is a fairly-priced growth market. Key sectors in Indonesia trade on par or at a slight discount to Asean.”

JP Morgan also remained bullish on financials and industrials sectors, but was cautious on technology hardware and energy companies

Shayne Heffernan

Business & Investment Opportunities
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