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Shayne Heffernan ASEAN Stars Equity Outlook

Apr. 28, 2011 4:10 PM ET
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ASEAN Stars should rally today.

Shayne Heffernan best buys from the ASEAN Stars today are from the regions booming food sector Indofood, Olam, Thai Union

PT Indofood Sukses Makmur Tbk is an Indonesia-based processed foods company. The Company is engaged in the manufacture of noodles, flour milling, packaging, management services and research and development. The Company's products include instant noodles, wheat flour, branded edible oils and fats, baby foods and snack foods, as well as food-seasoning products. Its brands include Indomie, Supermi, Sarimi, Bimoli, Palmia, Simas, Lay’s, JetZ, Promina, Sun and the Indofood and Piring Lombok range of food seasonings and flour. The Company's production facilities are located in Java, Sumatera, Kalimantan and Sulawesi islands. On December 17, 2008, the Company completed the acquisition of Drayton Pte. Ltd.

Olam International Limited (Olam) is an integrated supply chain manager of agricultural products and food ingredients. It is engaged in sourcing, processing, packaging and merchandising of agricultural products. Olam operates in 20 agricultural product categories across 64 countries. It operates in four segments: edible nuts, spices and beans; confectionery and beverage ingredients; food staples and packaged foods, and industrial raw materials. Food staples and packaged foods include rice, sugar, wheat, barley, palm, dairy products and packaged foods. Confectionery and beverage ingredients include cocoa, coffee and sheanuts.

Thai Union Frozen Products Company Limited is a Thailand-based company engaged in the manufacture and export of frozen and canned seafood. It serves both local and international markets. The Company operates through six business areas: frozen and canned food products, animal feeds and agricultural products, packaging products, food business in domestic market, overseas investment, and fishing vessels. Its exported products include canned, pouched, and seal-contained tuna, sardine, mackerel and seafood, frozen shrimp, frozen tuna loin, frozen cephalopod, frozen salmon, ready-to-eat frozen food and pet food. Within the country, the Company offers fish and squid-based snacks, canned tuna and pet food under the brands: Fisho, Sealect and Bellotta respectively.

Overnight in the USA

Silver prices put on another strong performance Thursday. After tapping at 50 oz to set a new 30-yr high, Silver prices settled back with a 4.2% gainer at 47.90 oz.
The Gold price settled at 1530.60 oz to mark a 0.9% gainer after setting a record high at about 15 39.

Crude Oil had wild session that saw prices climb to a new Y 2011 high of almost 114 bbl, before it faded to below 112 bbl in early afternoon trade, and closed just below 113 bbl, essentially unchanged.

A smaller-than-expected build in weekly inventories helped Nat Gas prices put in a nice gainer of about 3% near 4.63 per MMBtu.

In Jakarta today Plantation companies should perform well after Palm oil for July delivery increased 1.4 percent to 3,324 ringgit ($1,121) per ton on the Malaysia Derivatives Exchange.

Shayne Heffernan best buys are Astra Agro Lestari and Bakrie Sumatera

PT Astra Agro Lestari Tbk is an Indonesia-based oil palm plantation company. Its 4,059-hectare oil palm plantation is located in South Kalimantan and the cooking oil factory is located in North Sumatra, Indonesia. The Company and its subsidiaries' mills have production capacities of 940 tons of fruit bunch per hour and 600 tons of kernel per day and 300 tons of crude palm oil (CPO) per day. The subsidiaries' plantations and mills are located in Java, Sumatra, Kalimantan and Sulawesi. Its subsidiaries include PT Sari Lembah Subur, PT Eka Dura Indonesia, PT Tunggal Perkasa Plantations, PT Sawit Asahan Indah, PT Kimia Tirta Utama, PT Perkebunan Lembah Bhakti, PT Karya Tanah Subur, PT Sari Aditya Loka, PT Letawa, PT Suryaraya Lestari, PT Pasangkayu, PT Mamuang, PT Bhadra Sukses, PT Lestari Tani Teladan and PT Bhadra Cemerlang.

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.

Yesterday in Jakarta the JCI rose 4.0 points, or 0.1 percent, to close at 3,808.93, another record high. About 5.3 billion shares worth Rp 3.8 trillion ($444.6 million) changed hands. Decliners edged gainers 109 to 105.

The rupiah strengthened 0.4 percent to trade at 8,580 to the US dollar on Thursday. It gained the most in a week after global funds bought $49 million more in Indonesian stocks than they sold in the first three days of this week. 

In Manila yesterday profit taking seen the Philippine Stock Exchange index drop 42.49 points or 0.98 percent to finish at 4,278.83.

Shayne Heffernan best buys today are San Miguel Corp and Ayala Group

San Miguel Corp. ended its shares offering in the domestic market ahead of schedule, given a strong demand at the offer price of P110 per share, a deal arranger said on Wednesday.

BDO Capital & Investment Corp. president Eduardo Francisco estimated the demand for the secondary SMC shares offered at $150-$200 million, higher than the domestic market allotment of $100 million. BDO Capital was among the three arrangers of the offering.

Because there were no more shares available for sale, Francisco said the local offering was closed Tuesday night instead of Friday (April 29) as scheduled.

Philippine Integrated Energy Solution Inc. (Piesi) of the Ayala Group has been allowed by the Energy Regulatory Commission to sell, broker or market electricity to end-users when the government starts implementing open access and retail competition.

According to ERC, it awarded Piesi a Retail Electricity Supplier (RES) license, enabling the company to function as a retail electricity supply unit that can serve eligible commercial and industrial end-users within the Ayala group under the open access and retail competition regime.

Under the system, large power users will be able to choose their own power suppliers. With the current system, consumers are limited to the suppliers that have jurisdiction over their respective areas.

The new scheme, which may be implemented early next year, is also expected to further encourage competition among power stakeholders, resulting in better electricity prices.

The government incurred a budget deficit of P26.2 billion in the first quarter, which was significantly below the ceiling of P112 billion set for the period, as it spent much less than programmed and collected higher-than-target revenues.

The Department of Finance reported on Wednesday that the deficit for the first three months was a result of P323.08 billion in revenue collections and P349.28 billion in expenditures.

“Strong revenue performance of the two main revenue collecting agencies (Bureau of Internal Revenue and Bureau of Customs) matched by judicious spending focused mostly on priority programs kept the fiscal deficit in check,” Finance Secretary Cesar Purisima said in a statement.

A recovery in Palm Oil futures yesterday will give help Plantation companies today, Shayne Heffernan best buys are Genting Plantations and Kuala Lumpur Kepong.

Genting Plantations Berhad, formerly known as Asiatic Development Berhad, is a Malaysia-based company engaged in plantation, investment holding and provision of management services. The Company operates in four segments: plantation, which is engaged in oil palm plantations; property, which is engaged in property development and the operation of a golf course; biotechnology, which is engaged in genomics research and development, and others.

Kuala Lumpur Kepong Berhad (KLK) is engaged in the business of producing and processing palm products and natural rubber on its plantations. The Company’s subsidiaries are engaged in the business of plantation, manufacturing, retailing, property development and investment holding. The Company has a plantation land bank of more than 240,000 hectares in Malaysia (Peninsular and Sabah) and Indonesia (Belitung, Sumatera and Kalimantan). It operates in six business segments: plantation, manufacturing, retailing, property development, investment holding and others. Its subsidiaries include P.T. Sekarbumi Alamlestari, P.T. Langkat Nusantara Kepong and KLK Bioenergy Sdn Bhd.

In Kuala Lumpur yesterday the KLCI ended 5.39 points or 0.35 per cent higher at 1,535.30, extending its gains for the fourth consecutive day, after opening 2.45 points better at 1,532.36.

News reports today in Malaysia said that some Chinese banks were interested in a stake in RHB Capital amid speculation that the China Construction Bank was seeking approval from Bank Negara Malaysia to take up an equity interest in EON Capital Bhd.

RHB Capital rose 20 sen to RM8.80 while EON Cap added five sen to RM7.23.

Volume on the Main Market declined to 694.190 million shares, worth RM1.360 billion, from 832.859 million shares, worth RM1.365 billion, recorded yesterday.

Singapore should see a stronger day today and Shayne Heffernan best buys in Singapore today are Golden Agri-Resources down 1.5 per cent yesterday to S$0.670 and Noble Group which fell 0.9 per cent to S$2.20.

Golden Agri-Resources Ltd (GAR) is an investment holding company. Its primary activities include cultivating and harvesting oil palm trees, processing fresh fruit bunches into crude palm oil (CPO) and palm kernel (PK) and refining CPO into industrial and consumer products. GAR operates in two segments: Indonesia Agri-business, which is engaged in the ownership and cultivation of oil palm plantation, ownership and operation of mills and refineries and producer of consumer cooking oil and margarine in Indonesia and China Agri-business, which is engaged in refinery, port, storage and oilseed crushing operations in China.

Noble Group Limited is an investment holding company. Its subsidiaries, jointly controlled entities and associates comprise managing the global supply chain of agricultural, industrial and energy products; ship ownership, chartering and the provision of technical ship management services; trade finance; coal mining, soybean and sugar cane crushing activities and ethanol production. It has two segments: Agriculture, which includes grain, coffee, cocoa, cotton, sugar and fertilizer product divisions; Energy, which includes coal and coke, oil and gas (which includes ethanol), petrochemical (which includes polymers), and carbon credits product divisions; metals, minerals and ores, which includes iron ore, ferro alloys/manganese ore/chrome ore, alumina/aluminum and steel products product divisions, and logistics, which comprises vessel chartering, vessel ownership and vessel management.

In Singapore yesterday The Straits Times Index rose 0.07 per cent or 2.31 points to end at 3,184.99.

Volume was 1.03 billion shares.

In the broader market, losers led gainers 262 to 194.

CapitaLand advanced 0.29 per cent to S$3.42, while City Developments climbed 1 per cent to S$11.74.

DBS was up 0.13 per cent at S$14.92, while Neptune Orient Lines dipped 0.53 per cent to S$1.89.

Thai Stocks, IVL, Chiangmai Frozen Foods, Siam Food

Shayne Heffernan best buys in Thaland today are IVL , Chiangmai Frozen Foods, Siam Food

Chiangmai Frozen Foods Public Company Limited is a Thailand-based company engaged in the manufacture and export of frozen fruits and vegetables. The Company’s products include green beans, soy beans, carrots, baby corns, sweet corns, mangoes and pineapples, among others. It operates two factories that are located in Chiangmai province, with an annual production capacity of 42,000 metric tons. The Company exports its products to Japan, the United States, Sweden, Denmark, Taiwan and China. As of December 31, 2009, the Company had one subsidiary under the name of Agrifood Processing Co.,Ltd., which is involved in transmuted sweet corn distribution.

Indorama Ventures Public Company Limited is a Thailand-based holding company. It invests in companies in domestic and international markets across four business areas: companies engaged in the manufacture and sale of polyethylene terephthalate (PET), which is used for beverage containers and food packaging; companies engaged in the manufacture and sale of polyester fiber and yarn, which are used for textile and industrial applications; companies that produce and trade purified terephthalic acid (PTA), which is a white powder used in the production of polyester products, and companies that produce and trade wool. As of December 31, 2010, the Company had 23 factories worldwide, with a total production capacity of 1,648,000 tons of PET per year, as well as 280,800 tons of polyester fiber and yarn per year, 1,590,000 tons of PTA per year, and 5,900 tons of wool per year.

Thailand Export growth this year is projected to surpass 15 per cent, rather than the 12 per cent previously forecast, Commerce Minister Porntiva Nakasai said.

Indorama Ventures Ltd Plc (IVL), the world's largest producer of polyethylene terephthalate (PET), expects revenue this year to rise by 70% on the back of its increased capacity.

"We are expecting our top line to grow by 70% in line with the capacity expansion," chief executive Aloke Lohia said at the shareholders' meeting held recently.

IVL has set a target of achieving more than 5.8 million tonnes of capacity by the end of this year from 3.2 million at the end of 2010.

The expansion is part of its plan to achieve total capacity of 10 million tonnes by 2014, which has led the company to acquire assets across the world. The company will have 6.4 million tonnes of committed capacity by 2012.

The company is still seeking 3.6 million tonnes of capacity to fulfill its mission, Mr Lohia said, adding that the acquisition strategy remained in place.

Siam Food Products Public Company Limited is a Thailand-based manufacturer and exporter of processed fruit products. The Company produces and sells canned pineapples, concentrated pineapple juice, canned sweet corn and other related fruits products. The Company markets the products through its Siam Food brand and also on a make-to-order basis. Its customers are mostly found in Europe, North America, Asia and the Middle East. As of December 31, 2010, the Company operated pineapple and corn processing facilities in Chonburi and Saraburi provinces respectively, with a total production capacity of 7,997 ton per annum. It has one subsidiary, Quality Pineapple Products Company Limited, which is engaged in the production and sales of canned pineapples and concentrated pineapple juice, and one affiliated company, Eastern Seaboard Industrial Estate (Rayong) Company Limited, which is engaged in the development of industrial estate in Rayong province.

The Stock Exchange of Thailand main index went down 9.04 points or 0.82% to close at 1,092.31 points at the end of trading session on Thursday afternoon. The trade value was 34.52 billion baht.

Top five most active;

JAS          closed at       3.64 baht, up 0.26 baht (7.69%)
CPF(XD)   closed at     30.00 baht, down 0.75 baht (2.44%)
TTA         closed at      22.10 baht, up 1.00 baht (4.74%)
SCC         closed at    373.00 baht, down 11.00 baht (2.86%)
IRPC        closed at       6.20 baht, down 0.10 baht (1.59%)

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.


For More Information Contact

Chutinush Taksinapinunt (ANISTA)

Business Development Director

Heffernan Capital Management

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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