Bangkok: Most South-East Asian stock markets rose on Thursday as higher palm oil prices lifted plantation stocks and investors continued to pour money into shares because of growth in regional economies and consumption.
Brisk demand for food and edible oil producers helped push stock indexes in Malaysia and Indonesia to record intra-day peaks, with Singapore at eight-week highs and Thailand testing a 14-year peak.
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Analysts saw good opportunities in these sectors.
“Amid the soft commodity rally and food inflation, we believe upstream will benefit the most, as higher commodity prices will flow down to their earnings and valuation multiples,” Nomura’s Tanuj Shori said in a research note.
The United Nations FAO food agency said on Wednesday food prices hit a record high last month.
At the close on Thursday, Singapore’s Straits Times Index was up 0.8% while Malaysia’s main share index added 0.1%, but Indonesia’s index finally ended down 1.3%, slipping from that record high, while the Thai index ended flat. Vietnam’s main index eked out a 0.1% gain, after a drop of almost 1% on Wednesday. The Philippines’ index edged up 0.1%.
Moody’s Investor Services upgraded the outlook on the Philippines’ foreign and local currency bond ratings to positive from stable on Thursday, the day after the government sold $1.25 billion (Rs 5,625 crore) of global peso bonds.
Markets elsewhere in Asia were more subdued ahead of the US non-farm payrolls report on Friday. MSCI’s Asia Pacific index excluding Japan was up 0.16% by 9.15am GMT.
Among commodities stocks in South-East Asia with a market capitalization above $1 billion, Singapore-listed commodity firm Noble Group Ltd saw 2.5 times its average 30-day trading volume. Noble gained 1.8% on the day.
Noble Group is the best proxy for the macroeconomic recovery, and strong momentum in agricultural and energy stocks should continue, according to Nomura’s Tanuj.
Nomura reaffirmed Noble as its top buy, seeing its valuation at 14.6 times forecast fiscal 2011 earnings as undemanding in the cyclical upswing.
Other large-cap stocks whose volume on the day was more than double the 30-day average included Wilmar International Ltd, the world’s largest listed palm oil firm, which gained 1.4%.
Malaysian palm plantation firm Sime Darby BHD rose 0.2% and Singapore-listed commodities firm Olam International Ltd was up 2.2%. Univanich Palm Oil Pcl, the leading Thai palm oil producer, lost 1.9% as the government’s plan to import palm oil triggered profit-taking in recent beneficiaries of rising prices.