ASEAN Stars to Fall

ASEAN Markets will fall today but not as much as their Wall St counterparts, Regional economic news has been sound.
The DJIA .DJI closed off 140.24 pts, or 1.14% at 12,201.59.
The Standard & Poor’s 500 .SPX closed off 14.55 pts, at 1.10%, to 1,305.13.
The NAA Composite .IXIC closed off 29.27 pts, or 1.06%, at 2,735.38.
Thai Stocks will open lower but will not reflect the strong fall seen over night in the USA.
Shayne Heffernan best buys are Sri Trang, PTTEP
PTT Exploration and Production Public Company Limited is a Thailand-based company engaged in the exploration, extraction, production and development of petroleum products. It produces crude oil, condensate, natural gas and liquefied petroleum gas (LPG).
The Company is also engaged in petroleum-related businesses, such as jetty, bulk tank, wharfing service and warehouse management. It owns and operates a gas transportation piping system. It has 51 subsidiaries and 15 affiliated companies.
As of December 31, 2010, the Company and its subsidiaries averaged 304,023 barrels of oil equivalent per day (BOED), and had investments in 44 exploration and production projects in 13 countries worldwide. Its projects include gas projects in Oman and Myanmar, as well as oil projects in Vietnam and Australasia. Natural gas contributes to 70 percent of its total sales.
Sri Trang Agro-Industry Public Company Limited is a Thailand-based company engaged in the manufacture of rubber products.
The Company’s product includes rubber smoked sheet (RSS), which are used as a raw material in the production of other products, including automobile tires, pipes, shoes and parts of automobiles; block rubber, which is used in the automobile tire industry, and used as substitute to grade-3 rubber smoked sheet, and concentrated latex, which can be used as a raw material in the production of latex examination gloves, condoms, and elastic rubber thread.
Its customers are categorized in three groups: automobile tire manufactures, such as Bridgestone, Michelin, Yokohama, Hankook, Continental, Goodyear, Pirelli, and tire manufacturers in China; trading companies in Japan and other importers in Asia, China, Taiwan, Korea, America and Europe, and domestic customers, including automobile tire, motorcycle tire, and elastic rubber thread manufacturers.
In Bangkok yesterday The Stock Exchange of Thailand main index went up 5.76 points or 0.53% to close at 1,090.67 points at the end of trading session on Monday afternoon. The trade value was 34.28 billion baht.
Top five most active values were as follows;
SCC closed at 369.00 baht, up 11.00 baht (3.07%)
CPF closed at 27.75 baht, up 1.25 baht (4.72%)
PTT closed at 375.00 baht, up 4.00 baht (1.08%)
PTTEP closed at 189.50 baht, down 2.00 baht (1.04%)
PTTAR closed at 43.00 baht, up 0.50 baht (1.18%)
Kuala Lumpur will face challenges in the morning session but a rise in Palm Oil futures may help offset a negative night on Wall St.
Shayne Heffernan best buys are IOICORP, Sarawak Oil Palms
Sarawak Oil Palms Berhad is a Malaysia-based company engaged in the cultivation of oil palms and the operations of palm oil mills in Malaysia.
During the year ended December 31, 2009, the Company planted a total of 54,252 hectares of oil palms, of which 31,766 hectares were mature and 22,486 hectares were immature. In 2009, the Company produced 663,50 tons, 225,056 tons, 45,562 tons of fresh fruit bunches (FFB), crude palm oil (CPO) and palm kernels, respect.
IOI Corp
IOI Corporation Berhad is engaged in investment holding and the cultivation of oil palm and processing of palm oil.
The Company operates in five segments: plantation, which is engaged in the cultivation of oil palm and rubber and processing of palm oil; property development, which is engaged in the development of properties; property investment, which is engaged in the investment in shopping mall, office complex and other properties; resource-based manufacturing, which is engaged in the manufacturing of oleochemicals, specialty oils and fats, palm oil refinery and palm kernel crushing, and other operations, which is engaged in the management and operation of hotels and resorts, landscape services and other operations.
During the fiscal year ended June 30, 2010, the Company produced 3,405,090 tons, 732,275 tons and 170,876 tons of fresh fruit bunches, crude palm oils and palm kernels, respectively. In 2010, the Company disposed its entire shareholdings in IOI Pelita Kanowit Sdn Bhd.
In Kuala Lumpur yesterday the KLCI index gained 5.98 points or 0.39% to close at 1527.
Most Active SMARTAG, DBE, DBE-WA, RAMUNIA-WA, KBUNAI, CIMB, FOCUS, AXIATA, RAMUNIA and MAA. Trading volume increased to 1032.24 mil shares worth RM1496.12 mil as compared to Friday’s 915.05 mil shares worth RM1565.06 mil.
The Winners were GENTING (+34 sen to RM11.14), CIMB (+7 sen to RM8.30), GAM (+14 sen to RM3.83), PETCHEM (+8 sen to RM7.28) and YTL (+18 sen to RM7.90).
The Losers were IOICORP (-12 sen to RM5.29), AXIATA (-2 sen to RM4.74), UMW (-12 sen to RM7.12), PPB (-14 sen to RM16.72) and MAXIS (-3 sen to RM5.37).
The Finance Index increased 0.53% to 13994.01 points, the Properties Index up 0.67% to 1101.19 points and the Plantation Index down 0.61% to 7575.35 points.
The market traded within a range of 8.65 points between an intra-day high of 1533.18 and a low of 1524.53 during the session.
Market breadth was positive with 445 gainers as compared to 277 losers.
Manila will open lower today following an overnight fall on Wall St.
Shayne Heffernan best buys are Alliance Global and Ayala Corp
Alliance Global Group grew its consolidated net income last year by 40 percent to P9.5 billion on robust real estate and consumer businesses.
Its full year net income attributable to shareholders rose 44 percent to P6.9 billion from a year ago, the company disclosed to the Philippine Stock Exchange on Monday. Earnings per share based on net income attributable to shareholders during the period increased by 44 percent to P0.71 per share.
Property arm Megaworld Corp. contributed 40 percent to AGI’s net of minority interest while non-real estate businesses consisting of consumer food and beverage and integrated tourism projects accounted for 60 percent.
“We believe that all our business units will continue to sustain their strong growth momentum in 2011,” said AGI chair tycoon Andrew Tan.
“We are ready to fast-track our real estate developments and capture new growth opportunities in the tourism sector, especially with our investment in Global-Estate Resorts. Both real estate development and integrated tourism will be our main drivers of long-term value creation that is sure to benefit our shareholders,” Tan said.
An outsourcing unit of the Ayala group has acquired Los Angeles-based IQ BackOffice which provides finance and accounting backroom services to mid-sized US companies.
Ayala Corp.’s business process outsourcing (BPO) investment company, LiveIt Investments Ltd. disclosed to the Philippine Stock Exchange on Monday such acquisition by its investee company HRMall, which provides outsourced IT-enabled HR services out of Manila.
IQ BackOffice delivers high quality, software-enabled, real-time, SAS70 Type II-certified finance and accounting BPO services to mid-sized companies in the U.S. targeting companies with annual revenues of $50 million to $1 billion but its business includes clients with revenues up to $10 billion.
The combined companies are valued at approximately $15 million, the disclosure said. The management team of IQ BackOffice LLC, including David Schnitt, its founder and CEO, will purchase a 17.5 percent ownership interest in HRMall. LiveIt will own the balance of 82.5 percent of the company and will support the company’s strategy to accelerate its growth in its current markets in the U.S. and Asia.
Jakarta Stocks will open lower today, Shayne Heffernan best buys are Bakrie Sumatera, Mayora Indah
PT Mayora Indah Tbk is an Indonesia-based food manufacturer. The Company’s six product categories are biscuit, candy, wafer, chocolate, health food and coffee.
Among its brand names are Roma, Better, Danisa, Kopiko, Tamarin, Plonk, Astor, Roma, Choki Choki, Energen and Torabika. The products are sold to both domestic and international markets.
The Company has five subsidiaries, which are engaged in food and finance industries, namely PT Sinar Pangan Barat, PT Sinar Pangan Timur, PT Torabika Eka Semesta, PT Kakao Mas Gemilang and Mayora Nederland B.V. The Company operates production facilities in Tangerang and Bekasi.

Valuation Ratios

	Company	Industry	Sector	S&P 500
P/E Ratio (TTM)	13.93	24.36	17.66	17.79
P/E High – Last 5 Yrs.	13.75	6,435.73	1,609.22	93.10
P/E Low – Last 5 Yrs.	4.45	17.53	15.41	12.33
Beta	0.87	0.54	0.53	1.30
Price to Sales (TTM)	0.92	1.40	1.95	2.24
Price to Book (MRQ)	4.86	6.75	2.74	3.11
Price to Tangible Book (MRQ)	4.86	6.71	9.59	5.60
Price to Cash Flow (TTM)	9.82	13.71	11.18	60.71
Price to Free Cash Flow (TTM)	68.78	9.68	8.66	59.80
% Owned Institutions	–	–	–	–

Dividends

	Company	Industry	Sector	S&P 500
Dividend Yield	0.86	1.79	1.87	1.74
Dividend Yield – 5 Year Avg.	1.78	1.21	1.21	2.48
Dividend 5 Year Growth Rate	14.87	9.50	9.33	-4.46
Payout Ratio(TTM)	–	28.23	58.36	45.15

Growth Rates

	Company	Industry	Sector	S&P 500
Sales (MRQ) vs Qtr. 1 Yr. Ago	340.07	13.22	7.16	10.11
Sales (TTM) vs TTM 1 Yr. Ago	109.99	11.02	6.87	10.58
Sales – 5 Yr. Growth Rate	28.23	10.68	11.93	7.48
EPS (MRQ) vs Qtr. 1 Yr. Ago	209.29	79.30	29.70	76.20
EPS (TTM) vs TTM 1 Yr. Ago	96.69	–	–	–
EPS – 5 Yr. Growth Rate	34.32	7.94	8.67	4.71
Capital Spending – 5 Yr. Growth Rate	24.06	13.65	11.23	3.51

Bakrie Sumatera Plantations, one of the largest plantation companies in Indonesia, slid 1.4 percent to Rp 355. September-delivery rubber fell 10.1 yen to 425.0 yen ($5.14) per kilogram on the Tokyo Commodity Exchange on Monday.
At this price Bakrie Sumatera Plantations is undervalued.
PT Bakrie Sumatera Plantations Tbk is a plantation company in Indonesia. It is engaged in the production and marketing of natural rubber products and palm oil.
The Company also provides plantation management services and has subsidiaries which are engaged in investment management. Its two business segments are rubber and oil palm and derivatives. The Company has 66,560 hectares of plantation area in Kisaran, Asahan District, North Sumatra. Its subsidiaries include PT Bakrie Pasaman Plantations, PT Agrowiyana, PT Agro Mitra Madani and PT Huma Indah Mekar.
In Jakarta yesterday the JCI dipped 0.09 percent to close at 3,727.07. About 2.8 billion shares worth Rp 3.4 trillion ($391 million) changed hands. Decliners topped gainers 117 to 89.
The rupiah weakened 0.1 percent to trade at 8,672 to the US dollar as the market closed on Monday. The currency traded near its lowest level in a week after the Bank of China said it would increase banks’ reserve requirements by 50 basis points from Thursday as it tries to bring under control the country’s fastest rate of inflation in 32 months.
Singapore Stocks will have a difficult day after a sharp fall on Wall St overnight.
Shayne Heffernan best buys are ST Engineering, City Developments
Singapore Technologies Engineering Ltd. is an investment holding company, engaged in the provision of engineering and related services.
The Company operates in four segments: Aerospace, Electronics, Land Systems and Marine. Aerospace provides a range of maintenance and engineering services that include airframe, engine and component maintenance, repair and overhaul; engineering design and technical services; and aviation materials and management services, including total aviation support.
Electronics delivers system solutions to government, commercial, defence, and industrial customers worldwide. It specializes in the design, development and integration of advanced electronics and communications systems. Land Systems delivers integrated land systems, specialty vehicles and their related through life support for defence, homeland security and commercial applications.
In May 2010, the Company set up a wholly owned subsidiary, ST Engineering Financial II Pte. Ltd.
ST Engineering says it has secured $320 million contracts for various aircraft maintenance in the first quarter of 2011.
The company said the contracts are not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of the company for the current financial year.

Financials

For the year ended 31 December 2010
S$m	FY10	FY09	Growth %
Turnover	5,985	5,548	8
Earnings before interest and tax (EBIT)	586.7	486.4	21
Other income, net ($m)	40.0	67.6	(41)
Finance costs, net ($m)	(43.3)	(46.3)	6
Profit before tax (PBT)	627.5	546.6	15
Earnings before interest, tax, depreciation and amortisation (EBITDA)	718.7	649.2	11
Profit attributable to shareholders (Net Profit)	491.0	443.9	11
Earnings per share (cents)	16.21	14.78	10
Dividend per share (cents)	14.55	13.28	10
• Final	11.55	10.28
- Ordinary	4.00	4.00
- Special	7.55	6.28
• Interim (Ordinary)	3.00	3.00

For the third quarter quarter ended 30 September 2010
S$m	3Q10	3Q09	Growth %
Turnover	1,487	1,352	10
Investment, interest and other income	7.0	16.8	(59)
Earnings before interest, tax, depreciation and amortisation (EBITDA)	200.6	177.4	13
Earnings before interest and tax (EBIT)	157.4	137.4	15
Profit before tax (PBT)	159.8	149.1	7
Profit attributable to shareholders (Net Profit)	130.2	120.3	8
Earnings per share (cents)	4.31	4.01	8

For the second quarter quarter ended 30 June 2010
S$m	2Q10	2Q09	Growth %
Turnover	1,518	1,409	8
Investment, interest and other income	17.2	13.4	29
Earnings before interest, tax, depreciation and amortisation (EBITDA)	190.5	164.5	16
Earnings before interest and tax (EBIT)	147.3	125.9	17
Profit before tax (PBT)	157.6	139.3	13
Profit attributable to shareholders (Net Profit)	124.0	108.7	14
Earnings per share (cents)	4.11	3.62	13

The Group registered good growth in Turnover and Profits in FY2010 over FY2009. Turnover increased by 8% to almost $6b while Profit Before Tax (PBT) and Net Profit improved by 15% and 11% to $627.5m and $491.0m respectively. This good performance translates to an ROE of 30.3%.

Valuation Ratios

	Company	Industry	Sector	S&P 500
P/E Ratio (TTM)	19.99	23.62	14.90	17.79
P/E High – Last 5 Yrs.	22.18	60.96	66.90	93.10
P/E Low – Last 5 Yrs.	15.06	11.04	14.31	12.33
Beta	0.39	1.08	1.13	1.30
Price to Sales (TTM)	1.65	2.46	1.42	2.24
Price to Book (MRQ)	6.07	2.92	1.08	3.11
Price to Tangible Book (MRQ)	9.50	1.55	1.45	5.60
Price to Cash Flow (TTM)	15.26	17.83	10.41	60.71
Price to Free Cash Flow (TTM)	25.25	15.26	32.75	59.80
% Owned Institutions	–	–	–	–

Dividends

	Company	Industry	Sector	S&P 500
Dividend Yield	2.16	1.65	1.33	1.74
Dividend Yield – 5 Year Avg.	2.65	1.57	1.18	2.48
Dividend 5 Year Growth Rate	-12.44	9.97	9.26	-4.46
Payout Ratio(TTM)	81.92	25.79	17.66	45.15

City Developments Limited (CDL) is a Singapore-based company engaged in property development, ownership and investment holding. Its subsidiaries are engaged in property development and ownership, hotel ownership and operations, a club operation and ownership, investment in properties and in shares, property management, project management and consultancy services, and providers of information technology and procurement services.
The Company operates under four segments: property development, hotel operations, rental properties and others. Its subsidiaries include Allinvest Holding Pte Ltd, Aston Properties Pte Ltd, CBM Pte. Ltd., CBM Parking Pte. Ltd., CDL Land Pte Ltd and CDL Properties Ltd.
City Developments said on Monday its joint venture has secured a $1.6 billion loan partly to finance the construction of South Beach, a commercial development in Singapore.
The five-year $1.6 billion secured term loan is provided by a syndicate comprising DBS Bank, United Overseas Bank, Oversea-Chinese Banking Corporation , The Hongkong and Shanghai Banking Corp and Sumitomo Mitsui Banking Corp, it said in a statement.
Part of the funds will also be used to refinance the $800 million bank loan facility for the project, which is a joint venture between City Developments and Malaysia’s IOI , the statement said.

Valuation Ratios

	Company	Industry	Sector	S&P 500
P/E Ratio (TTM)	14.91	16.33	16.77	17.79
P/E High – Last 5 Yrs.	34.69	19.18	111.62	93.10
P/E Low – Last 5 Yrs.	10.46	3.91	84.77	12.33
Beta	1.46	0.40	0.98	1.30
Price to Sales (TTM)	3.37	6.35	5.03	2.24
Price to Book (MRQ)	1.65	1.85	1.41	3.11
Price to Tangible Book (MRQ)	1.65	2.70	1.84	5.60
Price to Cash Flow (TTM)	11.01	13.86	15.57	60.71
Price to Free Cash Flow (TTM)	37.24	2.74	3.08	59.80
% Owned Institutions	–	–	–	–

Dividends

	Company	Industry	Sector	S&P 500
Dividend Yield	0.69	1.38	1.76	1.74
Dividend Yield – 5 Year Avg.	0.75	0.19	1.29	2.48
Dividend 5 Year Growth Rate	-4.36	2.80	6.81	-4.46
Payout Ratio(TTM)	22.24	12.83	15.61	45.15

In Singapore yesterday the Straits Times Index closed at 3,144.38, down 0.28 per cent, or 8.92 points.
About 1.2 billion shares exchanged hands.
Losers beat gainers 309 to 158.
Shayne Heffernan
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.
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