Yesterday gains followed positive leads from Wall Street and Europe on
Friday, while comments from European Central Bank chief Mario Draghi Thursday
on saving the euro were reinforced by Germany, France and Italy over the
weekend.
Overnight in the USA Stocks
finished mostly flat on Monday as investors paused following the best two-day
run this year, with central bank meetings and a full load of U.S. economic data
looming.
Traders have bet that the Federal
Reserve and the European Central Bank will suggest further action to stimulate
their economies is on the way when each meets later this week.
The sectors least sensitive to
economic growth – telecoms, consumer staples and utilities – posted healthy
gains, suggesting a cautious move to defensive plays.
Blue chips like Wal-Mart Stores
(WMT.N) and AT&T (T.N) hit new 52-week highs. Wal-Mart rose 0.6 percent to
end at $74.98 after hitting $75.24 earlier. AT&T added 0.8 percent to close
at $37.43 after hitting $37.69.
Last week, a strong statement from
ECB President Mario Draghi drove the Dow above 13,000 for the first time since
early May, and gave the S&P 500 its biggest two-day rally since December.
Economist Shayne Heffernan has
warned of a possible large fall late this week as Central Banks fail to live up
to investor expectations.
Singapore
Singapore’s central bank, the
Monetary Authority of Singapore (MAS), has recently released its annual report,
the “MAS Annual Report 2011/12,” emphasizing its commitment to tackling
inflation and maintaining high levels of investor confidence whilst closely
monitoring the effects of the Eurozone on Singapore’s economy.
In its economic outlook, the MAS
said that the republic’s core inflation is likely to moderate to close to
historical average of 1.7% by the year-end. Headline inflation, on the other
hand, is said to remain elevated due to high imputed rentals on owner-occupied
homes and private road transport costs.
Nevertheless, MAS noted that the
city-state remains on track to grow at 1 – 3% in 2012 provided that there is no
recession in US, no significant escalation of the Eurozone crisis, and no “hard
landing” in China.
Analysis by Rikvin shows that the
projected growth of 1 – 3% this year will moderate and bring Singapore’s
economic growth to a sustainable level. “This is necessary to relieve cost
pressures as the country has witnessed an average growth of 5.8% over the last
half-decade, well over its underlying potential. That’s why there are low
levels of unemployment and high capacity utilization,” explained Mr. Satish
Bakhda, Head of Operations at Rikvin, a Singapore company registration
specialist.
There are already a few signs of
inflation easing out. Electricity tariffs have fallen and domestic oil-related
prices are stable now. Also, the 6% increase in domestic wages last year, which
was passed on to a variety of services costs, is expected to be more restrained
going forward.
The MAS also assured Singaporeans
about the efficacy of the city-state’s exchange rate-centered monetary policy
framework, which has come into question due to the persistence headline
inflation. “As communicated by Mr. Ravi Menon, Managing Director of MAS, the
exchange rate policy stance has had a restraining effect on inflation through
two channels by filtering import prices, as well as by moderating economic
activity in the export-oriented sectors. This policy remains our broadest and
most effective anti-inflation tool as Singapore makes a transition towards
productivity-driven growth,” added Mr. Bakhda.
MAS will be releasing the next
monetary policy statement as scheduled in October this year.
Thailand
Industrial output in Thailand
fell sharply in June and the central bank said monetary policy would probably
remain easy to help factories continue their recovery from last year’s floods.
Output slid 9.6 percent from a
year earlier, much worse than the 2.5 percent fall forecast in a Reuters poll.
It grew a revised 6.0 percent in May, the first annual rise since the floods
devastated industry last October..
On a monthly basis, output
dropped 3.5 percent in June after a revised 14.3 percent increase in May, the
Industry Ministry said.
The fall in output in June was
largely due to a high comparative base a year earlier, after a rebound in
production following supply chain disruptions caused by the earthquake and
tsunami in Japan in March 2011.
Malaysia
The FBM KLCI index gained 7.41
points or 0.46% on Monday. The Finance Index increased 0.41% to 14714.56
points, the Properties Index up 0.29% to 1048.05 points and the Plantation
Index rose 0.33% to 8745.82 points. The market traded within a range of 9.09
points between an intra-day high of 1632.35 and a low of 1623.26 during the
session.
Actively traded stocks include
PATIMAS, BIOSIS-WA, BIOSIS, HUBLINE, THHEAVY, IHH, GPRO, LUSTER, COMPUGT and
THHEAVY-WA. Trading volume increased to 1229.09 mil shares worth RM1284.98 mil
as compared to Friday’s 978.76 mil shares worth RM1710.21 mil.
Leading Movers were PETGAS (+130
sen to RM19.30), AXIATA (+5 sen to RM5.85), HLBANK (+34 sen to RM13.80),
IOICORP (+4 sen to RM5.34) and CIMB (+3 sen to RM7.84). Lagging Movers were BAT
(-158 sen to RM60.36), MAXIS (-8 sen to RM6.32), TENAGA (-3 sen to RM6.79), YTL
(-1 sen to RM1.87) and UMW (-4 sen to RM9.46). Market breadth was positive with
426 gainers as compared to 305 losers.
Indonesia
Expressindo Transindo Utama, the
operator of Express Taxi, is planning an overseas roadshow in the coming
months, as part of its effort to draw investor interest for its shares in an
initial public offering that is planned at the end of this year.
Stephen Sulistyo, managing
director for business development and investment at Rajawali Corporation, which
owns a controlling stake in Expressindo, said the roadshow’s planned
destinations included Singapore, Hong Kong and Europe.
Hoesen, a director at the Indonesia
Stock Exchange (IDX), said last Thursday that the bourse hoped Expressindo
would sell more than 20 percent of its shares to the public. The IPO would mark
the first time an Indonesian cab operator had listing on the IDX.
Details such as share price and
the size of the sale haven’t been announced by Expressindo or Rajawali. Media
reports have said that state brokerage Mandiri Sekuritas and JPMorgan Indonesia
have been appointed as the underwriters for the IPO.
Sulistyo said Expressindo planned
to use the proceeds to help finance its fleet expansion. The group aims to
boost its taxi operation to 8,000 units this year. The company currently owns
7,000 taxis.
“We aim to reach our target of
owning a total of 15,000 cabs,” he said.
Expressindo was established in
1989 and today says that it controls a 19 percent share of the taxi market
across the country. It also provides car rental and fleet management services.
Its biggest rival is the Blue
Bird Group, which started with 25 cabs in 1972 and now has a fleet of around
21,000 and is the biggest taxi company in the country.
Expressindo, which operates taxis
in Greater Jakarta, also has transportation services in other cities, including
Medan, Surabaya, Semarang as well as on Bali and Lombok islands.
Its Tiara Express offers premium
taxi services to customers in the Jakarta area.
Privately held Rajawali, created
in 1984, is controlled by billionaire Peter Sondakh. The Jakarta-based company
has interests in hotels, cement, consumer goods, retail, transportation and
department stores across the country.
Philippines
The peso slightly fell on the
first trading day of the week following the release of a report over the
weekend that the US economy grew by a slower pace in the second quarter.
The local currency closed at
41.93 against the US dollar on Monday, down by 3 centavos from Friday’s finish
of 41.90:$1.
Intraday high hit 41.81:$1, while
intraday low settled at 41.96:$1. Volume of trade amounted to $985.10 million
from $837.65 million previously.
The depreciation of the peso came
after the US government reported that the world’s biggest economy grew by only
1.5 percent in the first quarter from a year ago. This was slower than the
2-percent growth registered in the first quarter.
Traders said the decelerated
growth of the US economy was deemed by some investors as an indication that the
global economy would remain relatively week, at least over the short term. As
such, emerging markets like the Philippines are seen to also partly suffer in
the form of anemic export revenues.
Slowdown in the US economy is
also seen to drag growth of emerging markets through other channels, such as
investments and remittances.
·
Tokyo closed up 0.80 percent, or 68.80 points, at 8,635.44, Sydney gained
0.85 percent, or 35.9 points, to 4,245.7 and Seoul also climbed 0.80 percent,
adding 14.63 points to 1,843.79.
·
Hong Kong rose 1.61 percent, or 310.44 points, to 19,585.40 but Shanghai was down
0.89 percent, or 18.85 points, at 2,109.91.
·
Taipei rose 0.48 percent, or 34.39 points, to 7,158.88.
Formosa Plastics added 0.62
percent to Tw$81.4 while Taiwan Semiconductor Manufacturing Co. was 0.38
percent lower at Tw$79.0.
·
Manila closed 1.12 percent higher, gaining 58.35 points to 5,277.90.
Metropolitan Bank and Trust added
1.95 percent to 96.80 pesos while Philippine Long Distance Telephone rose 0.22
percent to 2,704 pesos.
·
Wellington added 0.50 percent, or 17.60 points, to 3,518.89.
Fletcher Building was up 1.01
percent at NZ$6.02, Telecom rose 2.55 percent to NZ$2.61 and The Warehouse was
steady at NZ$2.58.
·
Jakarta was up 0.37 percent, or 14.91 points, to 4,099.12.
Car maker Astra rose 0.75 percent
to 6,700 rupiah while Indocement gained 3.3 percent to 20,150 rupiah.
·
Bangkok was up 1.30 percent, or 15.31 points, to 1,193.32.
Banpu gained 2.01 percent to 406
baht, while PTT added 1.55 percent to 327 baht.
·
Kuala Lumpur closed up 0.46 percent, or 7.41 points, at 1,632.35.
Plantation group Sime Darby
gained 0.10 percent to 9.83 ringgit, while Telekom Malaysia added 1.06 percent
to 5.72 ringgit.
·
Singapore closed up 1.14 percent, or 34.31 points, at 3,032.80.
DBS Bank was up 0.61 percent to
Sg$14.74 and Singapore Telecom was 2.01 percent higher at Sg$3.55.
·
Mumbai rose 1.81 percent, or 304.49 points, to 17,143.68.
State Bank of India was up 4.63
percent at 2,031.05 rupees while Tata Motors rose 4.16 percent to 221.65.
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