Monday, November 7, 2011

SE Asia Stocks-Indonesia, Thailand ease in thin trade

BANGKOK (Nov 7):'' Stocks in Indonesia and Thailand edged lower in light volume on Monday as big caps pulled back in a subdued holiday trading session and as steady quarterly economic growth failed to lure buying interest in Jakarta.

Market turnover for Indonesia and Thailand halved a monthly average in the absence of market participants due to a holiday in the region, including a Muslim holiday in Indonesia.

Jakarta's Composite Index edged down 0.14 percent, the Thai benchmark SET index finished down 0.13 percent, erasing small gains in early trade, and Vietnam's Ho Chi Minh Stock Exchange index closed down 0.01 percent.

Singapore , Malaysia , the Philippines were shut on Monday, reopening on Tuesday. Mild selling for most sharemarkets came with losses in European shares on Monday as concerns shifted to Italy and whether Rome can avoid being dragged further into the euro zone debt crisis.

Brokers in Jakarta said concerns over euro zone debt outweighed relatively positive quarterly economic data.

Indonesia grew 6.5 percent in the third quarter on buoyant domestic spending and private investment, slightly lower than forecasts. Indonesia showed few signs of slowing despite a weakening global economy that is weighing on other Asian countries.

"There's not much that can derail Indonesia's growth trajectory, in my view. But if I have to pick one, I would pick inflation is the biggest risk in the medium term," said Lanang Trihardian, invesment analyst at Syailendra Capital.

"Two factors that we have to monitor are food inflation, especially rice, and the impact of fuel rationing next year. Rice is one of the largest contributors to domestic inflation and recent floods in Thailand could trigger rice price increases."

Foreign investors bought Indonesian and Thai shares for $40 million and $3.5 million, respectively, Thomson Reuters and stock exchange data showed.

Among losers, Indonesia's PT Telekomunikasi Indonesia Tbk fell 1.3 percent, reversing Friday's gains, when investors hunted for stocks with favourable dividend returns. In flood-hit Thailand, insurers lost 1.3 percent as the prospect of high amount of damage claims due to flooding worried investors of the sector's earnings.

Thai Reinsurance pcl dropped 3.7 percent. Elsewhere in Asia, shares struggled and credit markets weakened on Monday, with investors still nervous despite the agreement on formation of a new Greek unity government intent on avoiding imminent debt default. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.7 percent by 1001 GMT.- Reuters

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