ASEAN Markets will fall today after US
investors rejected to so called bail out of Spain.
U.S.
stocks fell on Monday as Europe’s aid package for Spanish banks did little to
alleviate investor concerns about the euro zone’s finances and the slowdown in
the global economy.
The Dow
Jones industrial average .DJI fell 141.91 points, or 1.13 percent, to
12,412.29. The S&P 500 Index .SPX dropped 16.66 points, or 1.26 percent, to
1,309.00. The Nasdaq Composite .IXIC lost 48.69 points, or 1.70 percent, to
2,809.73.
Thailand
The Thai
economy appears to be well-positioned to take advantage of additional stimulus
that may be injected into the global economy, in addition to strong,
domestically-derived growth.
Thailand’s
export-driven economy usually vacillates with the global economy because of its
dependence on external demand. However, government spending to rebuild
infrastructure in the wake of last year’s disastrous flooding has buoyed the
Thai economy when other export-reliant economies around the globe have
suffered.
Building
on this foundation of domestic demand, Thailand looks ready to take advantage
of global stimulus packages, both confirmed and hypothetical.
The
Chinese government has already enacted stimulus to promote slumping growth on
the Mainland. As China is one of Thailand’s largest trading partners, the
Southeast Asian economy will likely benefit from the residual effects of such
measures.
With
the United States and Europe mulling over their own potential stimulus
packages, the implementation of such economic catalysts would be a net positive
for Thailand’s exports. As a result of stimulus rumors, the Thai baht has
strengthened over the past week .
For
those considering Thailand, it is imperative to incorporate the political
situation into your investment thesis. The country’s political stability is
feeble; with an awkward transition in the monarchy looming on the horizon. The
government could potentially have trouble maintaining order given the
grievances of the so-called “Red Shirt” faction that caused 87 deaths in 2010,
and last year’s opposition win in the general election.
The
success of the Thai economy, evidently, is contingent upon the health of the
global economy. It is probably too early to jump into THD; however, once the
euro zone is able to bring some order and/or clarity to its crisis, the Thai
economy is well positioned to take advantage of a return to growth.
Singapore
Singapore’s
economy will experience growth slower than in the last 10 years.
This,
against the backdrop of a more developed economy, internal resources
constraints and fierce competition from the region.
But
Singapore needs to strive for growth to improve the collective well-being of
its people.
Prime
Minister Lee Hsien Loong said this at the Economic Society of Singapore’s
annual dinner on Friday evening.
Since
2003, Singapore’s economy grew an average 6.3 per cent per year.
Mr Lee
said: “Singapore cannot avoid slower growth in the next decade and beyond. This
is natural because we are now more developed and we are also running up against
land and labour constraints, especially as we reduce the inflow of foreign
workers.
“Plus
competition is fiercer, not only from hundreds of millions of hungry workers in
the emerging economies, but also from new technologies that will transform
industries all over the world.”
Mr Lee
noted that some Singaporeans may desire slower growth, but deliberately slowing
growth beyond Singapore’s economic potential could have irreversible
consequences.
“For
Singapore, slow growth will mean fewer new investments. Good jobs will be
scarcer, and unemployment will be higher,” he said.
“Enterprising
and talented Singaporeans will be lured away by the opportunities and the
incomes they can earn in other leading cities. Low-income workers will be
hardest hit, just as they were each time our economy slowed down in the last
decade. Over time, our confidence will be dented.”
The
government is also prioritising low-income Singaporeans through skills
upgrading and sharing productivity gains.
Low-income
households are also not neglected.
According
to Mr Lee, a low-income household will receive more than S$500,000 in transfers
from the government over a lifetime.
And to
boost their assets more than incomes, Mr Lee said the bottom 20 per cent of
households have an average of more than S$200,000 of equity in their HDB flat.
To
continue doing so, he pointed out that Singapore must have a successful
thriving economy to improve the collective well-being of its people.
But Mr
Lee cautioned that the Singapore government must strike a balance between
raising social spending and taxes.
Expenditure
has so far been 17 per cent of GDP including defence, while tax revenue is only
15 per cent of GDP.
Economist
Shayne Heffernan of www.livetradingnews.com Market Outlook
Malaysia
KLCI
index gained 7.79 points or 0.50% on Monday. The Finance Index increased 0.43%
to 14128.17 points, the Properties Index up 0.20% to 990.58 points and the
Plantation Index rose 0.94% to 8379.07 points. The market traded within a range
of 6.34 points between an intra-day high of 1582.29 and a low of 1575.95 during
the session.
Actively
traded stocks include GASMSIA, DSCSOL, TMS, SKPETRO, TRINITY, FLONIC, GLOTEC,
SKPETRO-CB, AGLOBAL and NICORP. Trading volume increased to 732.91 mil shares
worth RM1373.45 mil as compared to Friday’s 576.86 mil shares worth RM988.39
mil.
Leading
Movers were TENAGA (+8 sen to RM6.48), SIME (+6 sen to RM9.75), YTL (+5 sen to
RM2.05), DIGI (+4 sen to RM4.06) and IOICORP (+4 sen to RM5.10). Lagging Movers
were PETCHEM (-5 sen to RM6.44), GENM (-1 sen to RM3.53), YTLPOWR (-1 sen to
RM1.62) and PPB (-4 sen to RM15.98). Market breadth was positive with 418
gainers as compared to 262 losers.
Indonesia
Indonesian
thermal coal miner PT Toba Bara Sejahtera said on Monday it has cut the size of
a planned June initial public offering to about $75 million, from previous
expectations of up to $400 million, due to weak investor sentiment.
Toba
Bara, controlled by former army general Luhut Panjaitan, plans to sell a 15
percent stake in the offering and has set a price range for bookbuilding at
between 1,850 rupiah to 2,400 rupiah per share, one of its underwriters said.
“We
have to cut the size because the market is volatile at the moment,” said Pandu
Sjahrir, a Toba Bara director.
The
price range values the company at up to 5.06 trillion rupiah ($539.16 million),
compared to earlier expectations for a valuation of about $2 billion, as
Europe’s debt crisis has led equity investors to demand a discount for
offerings.
Many
firms in Indonesia and globally have delayed plans to raise capital or canceled
deals this year.
Myanmar
Wunna
Maung Lwin, will make an official visit to the Philippines on June 14 and 15 as
head of his country’s delegation to the second meeting of the Manila-Yangon
Joint Commission for Bilateral Cooperation (JCBC), the Department of Foreign
Affairs (DFA) said Monday.
In a
statement, the DFA said Wunna’s visit “follows the historic trip made by
Foreign Secretary Albert del Rosario to Myanmar in February, which marked a new
page in Philippine and Myanmar relations following the prodemocracy reforms
undertaken by the latter’s government.”
The
foreign office noted the JCBC was a “political mechanism for the two countries
to discuss areas of mutual interest, such as political cooperation, trade and
investments, tourism, education, human rights, agriculture and forestry,
culture and information, and law enforcement.”
The
Philippines and Burma, both members of the Association of Southeast Asian
Nations (Asean), established diplomatic relations in 1956.
During
his trip to Burma, Del Rosario met with democracy icon Aung San Suu Kyi who was
then preparing to run for parliament. She won the elections in April and now
represents the constituency of Kawmhu.
Del
Rosario said Suu Kyi and he “held a brief exchange of views” about the Burmese
elections, as well as political and socioeconomic reforms and the rule of law
in her country.
“We
also declared our support for the lifting of sanctions against Myanmar and
offered our proposal to develop Philippine-Myanmar parliamentary friendship,”
Del Rosario had told the Inquirer.
He
described his trip to the country’s capital as “significant,” noting that it
was “taking place when Myanmar is at its crossroads of history.”
On
February 8, Del Rosario called on President Thein Sein and held discussions
with Foreign Minister Wunna.
The
secretary congratulated his hosts for the “political, economic and social
reforms they have undertaken.”
For his
part, Thein Sein urged the Philippine business community to “invest in various
sectors of the Myanmar economy, such as oil and gas, mining, agriculture,
forestry, and in the development of sea ports and other infrastructure.”
Vietnam
The
State Bank of Vietnam has said it will restructure nine weak lenders in the
country by the end of June, calling for the participation of all investors in
the process.
“For
these nine banks, the priority is to let them restructure on their own. If they
can’t come up with a plan, the State Bank will step in,” Governor Nguyen Van
Binh told legislators at a meeting last week.
“So far
banks have solved their own problems by calling for new investors and looking
for partners for mergers,” he said.
Binh
did not reveal the names of the banks. He said the government has already
approved a plan to restructure two of the nine banks, aiming to deal with at
least two banks in every remaining weeks of June.
The
central bank arranged for three weak lenders with liquidity problems to merge
at the end of last year.
Philippines
The
local automotive industry has started recovering from last year’s slump as
vehicle sales in the first five months of the year inched up by 0.6 percent to
59,177 units from 58,847 units a year ago.
Based
on the joint report by the Chamber of Automotive Manufacturers of the
Philippines (Campi) and the Truck Manufacturers Association (TMA), the month of
May showed a much stronger performance with a 30.7-percent growth in vehicle
sales to 14,265 units from the 10,913 units sold in the same month last year.
According
to Campi, the growth could be largely attributed to the “improved supply
condition and sustained consumer confidence that was reflected by the
6.4-percent growth in the Philippines economy” in the first quarter of the
year.
“During
the first four months of the year, the industry posted minimal sales growth due
to the continued limitations in supply still brought about by the effects of
the flooding in Thailand last year. However, because of exciting new model
introductions, improved supply conditions and the country’s thriving economy,
all brands still maintained a good showing during this period,” according to
Campi president Rommel Gutierrez.
“This
May, we have seen drastic improvements in the industry because manufacturers
are able to serve strong customer demands due to the stabilization of the
supply situation. We are very optimistic that the strong performance in May is
a clear sign that the industry is on the road to recovery and can achieve
record-breaking sales for 2012,” Gutierrez said.
According
to the report, sales of passenger cars alone in the January-May period declined
9.5 percent to 17,616 units compared to the 19,462 units sold during the same
period last year. From the previous month, however, May 2012 sales of passenger
cars were higher by 15.5 percent to 4,274 units.
Sales
of commercial vehicles rose slightly by 5.5 percent in the first five months of
the year to 41,561 units from the previous year’s 39,385 units. For May alone,
sales of commercial vehicles similarly rose by 16.1 percent to 9,991 units from
the previous month’s 8,602 units.
Yesterday in Asia
Asian
markets and the euro rallied Monday after the eurozone agreed to lend Spain up
to $125 billion to save its banks, but analysts warn the deal is just a
sticking plaster for Europe’s wider problems.
The
weekend also saw China release a mixed bag of data that, despite not being as
bad as expected, was unable to soothe dealers concerns over the world’s second
biggest economy. But it did provide hope that Beijing will introduce more
easing measures.
Tokyo
surged 1.96 percent, or 165.64 points, to 8,624.90 and Seoul jumped 1.71
percent, or 31.40 points, to end at 1,867.04.
Hong
Kong climbed 2.44 percent, or 451.29 points, to 18,953.63 and Shanghai gained
1.07 percent, or 24.41 points, to 2,305.86.
Sydney
was closed for a public holiday.
Singapore
closed up 1.82 percent, or 49.92 points, to 2,787.81.
United
Overseas Bank gained 2.19 percent to Sg$17.70 while palm oil producer Wilmar
International was up 0.58 percent at Sg$3.48.
Taipei
rose 1.72 percent, or 120.58 points, to 7,120.23.
Taiwan
Semiconductor Manufacturing Co ended 3.21 percent higher at Tw$80.4 while Hon
Hai Precision added 2.57 percent to Tw$83.8.
Wellington
gained 0.14 percent, or 4.77 points, to 3,454.24.
Manila
closed 1.64 percent higher, adding 81.78 points to 5,075.85.
First
Gen Corp. rose 1.8 percent to 16.28 pesos and Metropolitan Bank gained 1.6
percent to 87.80 pesos.
Bangkok
rose 2.75 percent, or 30.97 points, to 1,158.07.
Banpu
gained 5.29 percent to 478.00 baht while PTT added 3.56 percent to 320.00 baht.
Kuala
Lumpur ended up 0.50 percent, or 7.79 points, at 1,578.41.
Budget
carrier AirAsia gained 1.10 percent to 3.69 ringgit while plantation giant Sime
Darby added 0.62 percent to 9.75. Petronas Chemicals Group lost 0.77 percent to
6.44 ringgit.
Jakarta
advanced 1.07 percent, or 40.89 points, to 3,866.21.
Bank
Rakyat jumped 4.2 percent to 6,150 rupiah and nickel miner Vale Indonesia rose
5.1 percent to 2,575 rupiah while cigarette maker Gudang Garam fell 1.0 percent
to 58,050 rupiah.
Mumbai
fell 0.30 percent, or 50.86 points, to 16,668.01.
India’s
biggest engineering company Larsen and Toubro slipped 1.99 percent to 1,283.00
points while leading vehicle maker Tata Motors retreated 1.40 percent to 235.55
points.
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