MARKET UPDATES :
- INDONESIA’S central bank held the benchmark interest rate at 7.50 per cent on Thursday despite sluggish growth, in a bid to take pressure off its current account. Southeast Asia’s top economy in the second quarter posted its slowest growth rate in five years with inflation easing to 3.99 per cent in August, well within the bank’s target range. Prices had spiked on fuel-price hikes last year. But Bank Indonesia has resisted slashing rates to boost growth to prioritise its current account, which hit a near-record deficit of US$9.1 billion, or 4.27 per cent of GDP, in the second quarter of this year.
- South Korea on Thursday proposed a tax hike as early as next year that would nearly double cigarette prices as the government tries to reduce one of the world’s highest smoking rates among adult males. The proposal, which needs to be approved by parliament, sent shares in dominant tobacco maker, government-backed KT&G Corp , down more than 5 per cent. It was also immediately criticised by the main opposition party, highlighting the difficulty in implementing anti-smoking regulations in a country where the health risks associated with smoking are not widely publicised.
- MALAYSIAN shares closed lower on Thursday with the Kuala Lumpur Composite Index slipping 4.74 points to 1,866.11. Some 2.042 billion lots, valued at RM1.91 billion were traded. Losers outnumbered gainers 430 to 412.
- CHINA’S auto sales reached 1.72 million vehicles in August, a rise of just 4.0 per cent compared with the same month a year ago, an industry group said on Thursday. In July, sales had climbed 6.7 per cent year-on-year to 1.62 million vehicles, previous figures showed. For the first eight months of the year, the country’s auto sales rose 7.7 per cent to 15.02 million vehicles, the China Association of Automobile Manufacturers said in a statement.
- A run of weaker-than-expected inflation in the euro zone represents a risk to the European Central Bank’s long-term inflation expectations, Executive Board member Peter Praet told an Italian newspaper on Thursday. The inflation outlook for the euro zone forms the cornerstone of ECB monetary policy, and its medium-term goal is for annual inflation of just below 2 per cent. Last week it said the mid-term outlook had worsened in August, when inflation fell to just 0.3 per cent. “There is a risk that worsening short- term expectations will influence long-term expectations, especially if inflation continues to undershoot,” Praet said in an interview with financial daily Il Sole 24 Ore.
- Hong Kong’s securities regulator said on Thursday that it had commenced legal proceedings against CITIC Ltd and five former directors for alleged market misconduct relating to foreign exchange contracts in 2008. The Securities and Futures Commission (SFC) said it had begun proceedings in Hong Kong’s Court of First Instance and the Market Misconduct Tribunal, in a bid to compensate up to 4,500 investors who had lost money as a result of the alleged misconduct.
- Asian shares were mixed Thursday following a pick-up on Wall Street while China released data showing inflation remained tepid, fuelling hopes the government will announce fresh stimulus measures. The dollar held on to most of the gains against the yen in New York, sitting at a six-year high, while the pound rallied on easing concerns about Scotland’s independence vote and hawkish comments from the Bank of England on interest rates. Tokyo added 0.47 per cent, Hong Kong dipped 0.13 per cent and Shanghai put on 0.33 per cent, while Sydney was off 0.10 per cent and Seoul shed 0.20 per cent on its first day of trade this week after a public holiday.
STOCK RECOMMENDATION :
- BUY NEPTUNE OIL ABOVE 0.975 TG 1.000, 1.030, 1.070 SL 0.940