Posts tagged stocks

Market corrections ‘temporary’, Malaysia growing says Deutsche Bank

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Don’t worry yet, the recent fall in stocks around the Asean region is just a “temporary” and “healthy” correction based on profit-taking and inflationary pressure, says Deutsche Bank.

DB continues to favor Asean markets, said its main representative in Malaysia/Asean, Teoh Su-Yin. She also cautioned investors, however, shouldn’t expect a repeat of last year’s returns when Thailand, Malaysia, Indonesia and the Philippines were Asia’s top four markets in terms of value. Indonesia and the Philippines in particular have seen drops in the past week, with other regionals likely to follow.

Malaysia

Teoh said Deutsche Bank regards Bursa Malaysia as a “growth market”, setting a 1,790 point target for the Kuala Lumpur Composite Index (KLCI) in 2011, with reported corporate earnings growing 26% on the back of palm oil, construction and results from large Malaysian corporations operating in Indonesia, such as CIMB and Petronas Chemicals Group. A third of Malaysian earnings came from outside the country itself, offering the kind of region-wide ‘footprint’ not seen in the rest of Asean.

source & article: Business Times

Malaysia is ‘back on the radar for international investors’: Bursa CEO

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It’s probably not surprising to anyone reading the Malaysian news recently, but the recent influx of foreign money to Bursa Malaysia has put the country “back on the radar for international investors”, according to Bursa Malaysia CEO Yusli Mohamed Yusoff. Positive fundamentals and good quality stocks would hopefully see that influx continue, he said.

Another sign of improvement was the FTSE’s re-classification of Malaysia’s economy as ‘advanced emerging’ in October 2010, a listing just below ‘developed’ which comes into effect June 2011 and applies to only nine countries in the world. Yusli said Bursa Malaysia would continue in 2011 to focus on stakeholder benefits likely to attract further interest; like quality, good governance, transparency and investor protection.

source & article: Bernama

Forecasters excited by Indonesian stock prospects

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The Indonesia Stock Exchange (IDX) grew 46% and foreigners doubled their equities stake to US$2.2 billion in 2010. With stats like that, it’s no surprise expectations are high for 2011, even amid concerns for the global economy in general. After Thailand, Indonesia’s market was the strongest performer in Asia.

There are still hopes major ratings agencies will upgrade Indonesia to investment grade this year, attracting institutional investors from overseas. It currently ranks two grades below that level. Processed foods, cosmetics and hygiene products from companies like Unilever are finding new domestic customers, while the banking sector is expected to grow further as lending increases. Should China’s demand for natural resources and energy continue at 2010 levels, Indonesia will need to meet it.

While no downsides are evident at the moment, forecasters are always cautious of unexpected (and inevitable) events and possible shocks. It seems the major internal concern for Indonesia’s economy in 2011 is a fear of overheating, becoming a bubble if too many join the rush and share values rise too quickly.

source & article: Channel NewsAsia

see also on CNA: Indonesia keeps interest rates steady to curb ‘hot money’ inflows & higher-than-expected inflation

Foreigners bought 27% of Malaysian stocks in December

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Foreign funds and retail investors bought just over 27% of Malaysian equities in December, over the figure CIMB Research predicted would be large enough to have a significant effect on the market. Net inflows of foreign funds increased in Malaysia and across most of Asia in 2010, spiking around three months ago but slowing down since then.

Foreigners bought RM11 billion (US$3.59 billion) of Malaysian stocks last month, and sold RM8.4 billion ($2.74 billion). RM10.8 billion of the purchases were from funds, with ordinary retailers making up the remainder. On average, foreign stock ownership in Malaysia is around 22%.

Some say the slowdown is due to European and American end of year holidays, while the end of the US Federal Reserve’s second round of Quantitative Easing (ie: increasing the money supply) might also see fewer dollars coming to Asia in the coming months.

source & article: Business Times

Analysts bullish on Bursa Malaysia for 2011

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Nothing better than a little New Year optimism: analysts are predicting a hot year for Bursa Malaysia, with some predicting the KCLI composite index could beat November 2010′s 1,528.01 point record and reach 1,700 at some stage in 2011.

Spokespeople from different companies gave their outlooks in this Business Times article. Lee Cheng Hooi of Maybank Investment Bank Bhd said the KLCI could reach 1,553 points in the first quarter alone, with plantations and oil/gas leading the charge. Terence Wong of CIMB Research has even higher expectations, with his company rating Malaysia as ‘overweight’ and revising its end of year target from 1,610 to 1,700 points. CIMB has its eyes on the property sector, picking SP Setia Bhd with its various eco-developments as top property stock and identifying Eastern & Oriental Bhd as a potential takeover target.

Edmund Tham of Mercury Securities like small caps including fire fighting company Fitters Diversified Bhd and cocoa producer Guan Chong Bhd. He predicts the market will rise 5% from its current level in the first three months of 2011 with the banking and construction sectors performing well. Alan Voon of Warrants Capital Sdn Bhd also favors the development and real estate industry this year, saying retail investors will show an interest in speculation and warrants, choosing companies such as fabricators Jotech Holdings Bhd as attractive with its upcoming activity in plantations and the Indonesian resources sector.

source & article: Business Times

Krakatau Steel IPO gains under a cloud

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Government-owned Krakatau Steel did quite well in its IPO earlier this month, but now many are calling for an investigation into allegations the success was tainted by insider trading. The initial price was set too low to benefit certain well-connected investors, according to rumors.

The company’s stock rocketed 49% from Rp 850 (US$0.09) to Rp 1,270 ($0.14) in its first day, reaching the maximum gain and triggering an automatic block which stopped the price rising further. 3.2 billion shares were sold for Rp 2.7 trillion ($300 million), making it the biggest IPO of a state-owned company by value since 2006.

Even some Indonesian lawmakers have supported calls for an investigation by the government’s Supreme Audit Agency, including Coordinating Minister for the Economy Hatta Rajasa. The IPO’s underwriters deny any influence by outside factors, saying the offer price reflected earning ratios of comparable companies.

Update: In related news, Krakatau is claiming 30 business journalists attempted to reserve 1,500 shares in exchange for positive coverage of the IPO. The Indonesia Stock Exchange Journalist Forum has denied the allegations.

source & article: Channel NewsAsia

Bursa Malaysia highlights its unique features

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Bursa Malaysia is busy highlighting its unique features to distinguish itself from the region’s larger stock markets. CEO Yusli Mohamed Yusoff, speaking at the Global Islamic Finance Forum 2010 in KL, said Bursa Malaysia would set up an international board and expand its product range to attract more listings and investors from overseas.

Yusli said Bursa Malaysia’s key strength was its range of Islamic-friendly listings and services, hinting this was the kind of overseas interest the local market should be aiming most to attract. 88% of listed companies were shariah-compliant and they accounted for 64% of the total market cap, he said. Bursa is also working with regulators to make Islamic debt products more accessible to ordinary retail investors, and the Securities Commission is currently reviewing a proposed listing for a real estate investment trust (REIT) from a major company based in the Gulf Cooperation Council (GCC).

source & article: The Star

Singapore agrees to Australian stock exchange takeover

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The Singapore Exchange (SGX) has made official its plan to take over the Australian Securities Exchange (ASX), marking the first consolidation of major stock exchanges in the Asia Pacific region. SGX will buy ASX at A$48 (US$47.7) a share, higher than its closing price of A$34.96 on Friday. ASX shares rose to $43.89 after the announcement, though the SGX price fell 5.8%.

The merger was unanimously approved by both companies’ boards, though it will still require Australian government approval. Australia’s competition regulator (ACCC) said it does not have any objections, but Australia’s current minority government is propped up by rural independents who could potentially complicate matters . Of primary concern to Australians is SGX’s ties to the Singapore Government, through its 23% ownership by the Financial Sector Development Fund and Singapore’s central bank.

The new entity will be the second largest stock exchange in Asia after Tokyo, and fifth largest in the world. SGX is already Asia’s #2 and ASX its #3.

sources & articles: Sydney Morning Herald and Yahoo! Singapore

New designation means US investors can trade directly in Malaysia

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More encouraging news for Bursa Malaysia: The US Securities & Exchange Commission (US SEC) has officially recognized it as a “Designated Offshore Securities Market”, enabling US investors to trade directly in all securities listed on the Malaysian market. The new ruling also covers shelf-listed bonds that satisfy conditions of Regulation S of the United States Securities Act 1933.

US based investors face extra regulations and restrictions trading in securities outside the United States. Bursa Malaysia’s new designation eases those restrictions, opening more doors to foreign investment and allowing larger US institutional investors to get involved.

source & article: Business Times

See Also:  Citigroup wants to be one of the Top 3 foreign brokerages in Malaysia

JF Apex wants more youth & foreigners to e-trade on Malaysian market

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Malaysian brokerage JF Apex Securities Bhd is making a big push to promote online trading in new areas, saying it will target young Malaysians and overseas customers as part of its plans boost income and reinvigorate activity on the local stock market.

Today it launched “eTrade on the Go”, a new program aimed at younger customers and offering a laptop and broadband internet access for 24 months to online traders. It will also go on a roadshow to promote its online trading service, available since 2001, to attract new e-traders and re-activate some of its customers who have fallen quiet over the years. Of 20,000, 16,500 are active users and JF Apex would like to double its total to 40,000.

The company says e-trading makes up 30% of its bottom line and it would like to increase that markedly. Possible changes to brokerage fees in Malaysia would make online activity more attractive and JF Apex was also in talks with brokerages in Hong Kong, Singapore and Thailand about possible tie-ups and building a customer base outside Malaysia.

Bursa Malaysia CEO Yusli Mohamed Yusoff said investors on Malaysia’s market were aging rapidly, suggesting younger people were avoiding the stock market due to risk, complexity and expense. Programs like eTrade on the Go would encourage education and understanding among the next generation, who should understand that capital markets offer opportunities regardless of current conditions.

sources & articles: Bernama and Business Times

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