New Generation Trading System for China Foreign Exchange Trade System (CFETS) goes live nationwide

Tata Consultancy Services, the leading IT services, business solutions and outsourcing firm today announced that the Reminbi currency trading platform for the Chinese inter-bank market, an initiative of China Foreign Exchange Trade System (CFETS), a subsidiary of People’s Bank of China (PBoC) has successfully gone live nationwide. The New Generation CNY Trading System (NGCNYTS) is a forward-looking trading system, which aims to incorporate the future vision of the Chinese Interbank market and relevant international best practices. It is designed to meet the fast growing requirements of the Chinese financial market with efficient risk management and real time monitoring systems. It supports multiple trading methods, including special features for market makers.


NGCNYTS is a next generation system providing unified platform across Debt, Money and Derivative Markets. NGCNYTS gained national importance, as it is the primary trading platform for all financial institutions such as Commercial Banks, Pension, Trust & Mutual Fund, Securities firms and Insurance companies in China.

Speaking on the successful implementation of this landmark project, Girija Pande, Executive Vice President and Head, TCS Asia Pacific, said, “We are extremely pleased to successfully deliver the CFETS project built based on our experience in other global markets and in close cooperation with CFETS who have experience in Chinese domestic market. It also provides flexibility to connect with third party front ends and other external interfaces. Deploying in ten markets at a time is a unique challenge which TCS could complete successfully.”

“The project is among the most prestigious venture of TCS in the APAC region, involving a highly dedicated multi-cultural team of over 130 associates spanning a period of more than 2 years. The team will be maintaining the system going forward and enhancing the system for additional markets,” he further added.

TCS’ trading solution at CFETS is scalable and can handle rapid growth in volumes with ease. Due to its scalable and configurable architecture, it also simplifies the addition of multiple financial products thus reducing the overall time to market.

Besides CFETS, TCS has successfully delivered the mission critical trading systems for the National Stock Exchange of India Limited, India, National Commodity and Derivatives Exchange, India and Clearing Corporation of India Limited (CCIL). TCS is also the chosen strategic partner involved in maintaining the trading applications at Deutsche Boerse AG, Germany.

TCS pioneered the entry of Indian IT industry in China in 2002 and remains at the forefront of that thrust with 1100 consultants in China and four Global delivery Centres (Beijing, Shanghai, Tianjin& Hangzhou). In 2005, TCS was invited by Chinese Government to form a Joint Venture to create a large scale global sourcing base in China. TCS China is serving over 30 Global and domestic clients like Eaton, Motorola, Cummins, China Foreign Exchange Trade System (CFETS), Guangdong Provincial Rural Credit Cooperative Union (GDRCC), China Trust Bank, Hua Xia Bank.

Barclays Capital lists iPath Exchange Traded Note on SGX, first-ever ETN in Asia outside Japan

Barclays Capital, the investment banking division of Barclays Bank PLC, and Singapore Exchange Limited (SGX) today announced the listing of the iPath Dow Jones-UBS Commodity Index Total ReturnSM Exchange-Traded Note (ETN) on the SGX. The iPath Dow Jones-UBS Commodity Index Total ReturnSM ETN is the first-ever ETN listed in Asia outside Japan and provides both institutional and retail investors with exposure to a broad range of commodities during the Asian time zone.


iPath ETNs were first launched by Barclays Capital in the US in 2006 and are designed to provide investors with convenient access to the returns of market benchmark indices, less investor fees. The iPath ETNs are senior, unsecured, unsubordinated debt securities linked to the performance of an underlying index.

"We are very excited to bring the iPath ETN platform to investors in Asia. iPath ETNs have been tremendously successful in the US attracting over US$5 billion in market capitalisation with over US$80 billion in volume traded since inception," said Philippe El-Asmar, Head of Investor Solutions at Barclays Capital. "iPath ETNs provide investors with simple, transparent, cost efficient instruments that provide access to difficult-to-reach markets with the ease of trading through an exchange," he added.

Ms Janice Kan, Senior Vice President & Head of Product Development at SGX said, "We are pleased to be the first listing venue for Barclays Capital's iPath ETN platform in Asia. The launch of this new product class broadens our suite of investment offerings and will provide investors with cost-efficient access to the commodities asset class, and eventually, a range of other asset classes. This underpins our efforts in developing SGX as the one-stop investment gateway in Asia."

Peter Hu, Barclays Capital's Head of Investor Solutions in Non Japan Asia said, "We are delighted to be able to provide investors with a new way to invest across different asset classes during Asian trading hours. The iPath Dow Jones-UBS Commodity Index Total ReturnSM ETN we are launching today enables investors to gain exposure to a broad range of underlying commodities with ease via a single, liquid and transparent instrument. We see self-directed investors becoming an increasingly important client segment in Asia and we plan to cater for their varied investment needs by launching many more iPath ETNs in the future."

CIMB Group to List on Stock Exchange of Thailand

CIMB Group Holdings Berhad announced today that it will pursue a dual listing of its shares on The Stock Exchange of Thailand (SET). A leading regional universal bank currently listed on Bursa Malaysia, CIMB Group is the first foreign corporation to announce a listing plan since the Securities and Exchange Commission of Thailand (SEC) and SET approved their new guidelines for foreign listings in October 2009. The regulations will be effective from 1 December 2009.


“This move amplifies our commitment to Thailand,” said Dato’ Sri Nazir Razak, Group Chief Executive, CIMB Group. “The listing will enhance our profile to investors and the general public in Thailand and make it easy for them to be able to invest in the growth of a regional bank,” he said.

“The Stock Exchange of Thailand truly welcomes CIMB Group as our first foreign listing,” said SET President Patareeya Benjapolchai. “As CIMB Group is a leading financial group in the region, its listing will offer Thai investors an alternative worthy of consideration and will raise the profile of the Thai market in the eyes of fund managers worldwide. We are ready to support the company in the listing process to realise its intention,” she said.

Based on CIMB Group’s market capitalisation of USD13.7 billion (THB455.9 billion) as at the close of trading on 13 November 2009, the company would be among the 3 largest companies on SET and the largest financial services group.

CIMB Group is already present in Thailand via its 93.15%-owned subsidiary, CIMB Thai Bank PLC, which is also listed on SET. “CIMB Thai will continue to be listed on SET for now,” said Subhak Siwaraksa, President and CEO of CIMB Thai. “However CIMB Group’s proposed listing would be an opportune time for us to reconsider this in consultation with our shareholders,” he explained.

To facilitate the dual listing, CIMB Group plans to undertake an initial public offering (IPO) of up to 35 million CIMB Group shares. The shares will be made available to retail and institutional investors in Thailand, which may include customers, staff and/or minority shareholders of CIMB Thai.

The dual listing is expected to complete in the first half of 2010, subject to approvals from CIMB Group shareholders and regulatory authorities in Thailand and Malaysia.
About CIMB Group

CIMB Group is Malaysia’s second largest financial services provider and one of Southeast Asia’s leading universal banking groups. It offers consumer banking, investment banking, Islamic banking, asset management and insurance products and services. Headquartered in Kuala Lumpur, its key regional offices are located in Singapore, Indonesia and Thailand.

CIMB Group operates its business through three main brand entities, CIMB Bank, CIMB Investment Bank and CIMB Islamic. CIMB Group is also the majority shareholder of Bank CIMB Niaga in Indonesia, and CIMB Thai in Thailand.

CIMB Group is listed on Bursa Malaysia via CIMB Group Holdings Berhad (formerly known as Bumiputra-Commerce Holdings Bhd). It has a market capitalisation of approximately RM46.3 billion as at 13 November 2009. The Group has over 36,000 employees located in 9 countries.
About Foreign Listing Regulations of Thai SEC and SET

The new regulations were approved by the SEC and SET in October 2009 and will be effective from 1 December this year. In the first phase, the SET will allow only dual listing of the listed company where the home exchange is a member of the World Federation of Exchanges (WFE) and the regulator is a member of the International Organization of Securities Commissions.(IOSCO). The market capitalization of the company should be either over THB 10 billion or such that the firm is in the first quartile of listed companies in its home exchange.

For more details of the regulations, please go to www.sec.or.th and www.set.or.th

BANPU SETS BT15.5-BN INVESTMENT PLAN FOR THE NEXT SIX YEARS

       Banpu has set an ambitious US$466 million (Bt15.8 billion) investment plan over six years from 2010-2015 to cope with increasing demand for coal and power.
       The International Energy Agency forecasts Asean's energy consumption rising 2.1 per cent a year until 2030. Energy consumed by the 10 country members of Asean may increase by 76 per cent from 2007 to 2030 because of economic expansion. Investment in the sector would be $390 billion higher than the reference case.
       Banpu CEO Chanin Vongkusolkit said yesterday that the coal mining business has room to grow for at least for 10-20 years. The six-year investment plan covers coalmines in Indonesia worth $190 million, coalmine expansion in China worth $22 million and the Hong Sa hydropower project in Laos, which is expected to begin operations in 2015.
       The coalmining business is now in focus again, thanks to high demand in 10-20 years, and the company might spend more on improving human resources and technology to prepare for the coal business, he said. Coal sales could rise to 33.5 million tonnes in 2015 from 23.3 million tonnes at present.
       Banpu expects the coal price next year to decline to $60 per tonne from $71-72 this year, but it may consider selling premium coal next year to boost its average coal price to above $70.
       Under the investment plan, the power business should generate 10-15 per cent of total sales in 2015 from the current level of 30 per cent. Early this year, Chanin said the company is bidding on three to four power plants and two to three coalmines. Those projects are excluded from the six-year investment plan.
       Banpu posted consolidated third-quarter net profit of Bt3.8 billion, an increase of 22 per cent from Bt3.11 billion the year before. Earnings were boosted by higher coal sales from Indonesian coalmines and a gain from financial derivatives, mostly coal swaps.
       "Coal sales volumes in the third quarter were 5.31 million tonnes, an increase of 15 per cent from the same period last year and 18 per cent from the previous quarter, thanks to higher coal sales volumes from Indonesian coal mines.
       "In addition to higher quantity of coal sales, financial derivatives especially from coal swaps have helped lift the net profit of the third quarter," he said.
       Revenue and profit this quarter would drop from last quarter due to a decline in coal prices in Indonesia and the shutdown of the BLCP power plant for maintenance, as well as reduced coal production in China, he said.
       Banpu targets revenue this year at Bt57 billion, up from Bt56.83 billion last year.
       Banpu's stock price closed yesterday at Bt462, up 3.12 per cent from Tuesday. Most of the 13 energy stocks posted increases in third-quarter net profits. Their combined net profit was Bt39.57 billion, up 53.36 per cent from Bt25.80 billion in the same period last year.
       PTT, the largest energy firm, and its subsidiaries also saw bigger net profits. Bangchak recorded the highest profit growth - 956 per cent to Bt2.15 billion from a loss of Bt251 million - followed by IRPC with 151.90 per cent to Bt2.29 billion from a loss of Bt4.43 billion.
       Ratchaburi Electricity Generating Holding posted the lowest growth at 20.19 per cent to Bt1.65 billion from Bt2.07 billion last year.

MADOFF'S JEWELLERY, FINERY TO BE AUCTIONED

       The trappings of Bernard Madoff's once luxurious lifestyle - jewels, furs and expensive trinkets - will be auctioned on Saturday in New York to benefit victims of Wall Street swindler.
       The catalogue contains almost 200 lots reflecting the gaudy life enjoyed by Madoff and his wife Ruth as a result of his decades-long, multibillion dollar Ponzi scheme.
       That includes no less than 17 Rolex watches, diamonds, fur coats, Hermes and Louis Vuitton handbags, crocodile-skin belts, golf clubs and numerous items of jewellery.
       On a more personal note, there will be a blue satin Mets baseball team jacket emblazoned with "Madoff" on the back. Estimated price: $500-$720 (Bt16,650-Bt24,000).
       The Madoff name appears on many other goods, ranging from beach boards to personal stationary.
       Gaston and Sheehan auctioneers are handling the sale at a Sheraton hotel in New York, but the goods were seized by the US Marshals Service to raise compensation for hundreds of investors cheated by Madoff.
       Pre-auction estimates by Gaston and Sheehan predict sales of about $500,000.
       Properties, including a Manhattan penthouse and Palm Beach retreat, have also been seized. A Long Island beach getaway sold for $8 million.
       Madoff, now serving a 150-year prison sentence for fraud, claimed just before his arrest last December to have been managing $65 million. However, much of that appears to have comprised fraudulent funds.
       The court-appointed liquidator says that investors lost $21.2 billion cash.

Wall Street rally fades as Fed offers no surprises

       Wall Street saw a rally fizzle Wednesday in a muted reaction to a Federal Reserve decision to maintain its present course of stimulating the economy with low rates and extra liquidity.
       The Dow Jones industrial average, up more than 150 points after the Fed described the US economy as showing more signs of recover y, closed up 30. The broader indexes were narrowly mixed.
       Analysts couldnt point to any one reason why stocks gave up their gains, although some said the market is increasingly nervous as the release of the governments October jobs report today approaches. Financial stocks fell especially hard in the last hour of trading after a House vote to speed up the effective date of limits on credit card companies, and added to the overall markets pullback.
       The Fed, as expected, left its benchmark interest rate unchanged at a record low of essentially zero and said the economy is slowly rebounding. Its announcement followed reports on service industries and employment that eased two of the biggest worries about the economy.
       The Feds statement accompanying its rate decision noted that housing activity has picked up in recent months. It also said consumer spending, while still constrained by unemployment and other problems,appears to be growing.
       Policymakers said they would keep interest rates low for anextended period and said inflation is likely to remain tame. That eased some worries that rising prices would force the Fed to boost interest rates and risk cutting off a nascent recovery in the economy.
       But, as often happens after Fed meetings, stocks were unable to hold their gains. The Fed statement,while more upbeat than in recent months, did note that there are ongoing job losses. And investors were well aware that the Labour Departments October jobs report is just two days away.
       Meanwhile, the House approved new rules for credit card companies unless lenders agree to freeze interest rates and fees. The vote would move up the February effective date of legislation already passed by Congress that limits what banks can charge for credit cards.
       It didnt appear likely that the Senate would also pass the measure, but the House vote still sent financial stocks falling. And when bank stocks fall, the rest of the market tends to follow.
       The Dow rose 30.23, or 0.3%, to 9,802.14. It had been up as much as 156 after the Fed announcement.
       The broader Standard & Poors 500 index rose 1.09,or 0.1%, to 1,046.50, and the Nasdaq composite index fell 1.80, or 0.1%, to 2,055.52.
       Winning stocks were ahead of losers by 8 to 7 on the New York Stock Exchange, where volume came to 1.35 billion shares. The Fed appeared more upbeat than investors by the end of trading Wednesday.Its definitely dovish. We think it supports continued market progress over the next few months,said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
       But investors have grown fearful that the economic rebound theyve been betting on over the past eight months will be fleeting, consider ing that job losses remain high and consumers still arent spending freely.Stocks have zigzagged over the past few weeks amid the heightened uncertainty.
       The days economic reports bolstered hopes that consumers could increase consumer spending, a critical factor for an economic recovery.
       The Institute for Supply Management said service industry activity grew for a second straight month in October. The trade groups service index slipped to 50.6 from 50.9 in September. A reading above 50 signals growth.
       The index didnt meet forecasts but the ISM said new orders, which are an indicator of future business activity, grew faster. Business activity also picked up.
       Encouraging news about the labor market also boosted investors mood. The ADP National Employment Report said 203,000 private sector jobs were lost in October, down from the 227,000 lost in September. It was the seventh straight month of declining job losses. That stirred hopes for a better-than-expected employment report from the Labour Department today.
       The dollar fell against other major currencies, helping to send commodities prices higher.
       Gold rose as high as $1,096.50 an ounce. Crude oil added 80 cents to $80.40 a barrel on the New York Mercantile Exchange as the government said US crude supplies fell more than expected. AP
       LONDON 5,107.89 +70.68
       Britains leading shares ended 1.4% higher on Wednesday boosted by a rebound from miners and banks, with retailers Next and Marks & Spencer also higher after posting forecast-beating figures.
       At the close, the FTSE 100 was up 70.68 points at 5,107.89, recouping all of Tuesdays losses when the index fell 1.3% to its lowest closing level in a month.
       In Frankfurt, the DAX index ended at 5,444.23 points,up 90.88 or 1.70%. In Paris, the CAC-40 index closed at 3,670.33 points, up 86.08 or 2.40%.Tuesdays fall looked to have been overdone, and shares have bounced back but confidence remains fragile ahead of lastnights news from the Fed and the BoEs pronouncements yesterday, said Mic Mills, senior trader at ETX Capital.
       A rebound by mining stocks added the most weight to the blue chip rally, reflecting a rise in metal prices on the back of a weaker dollar ahead of the Federal Reserves statement on interest rates and the economy,due at 1915 GMT.
       Fresnillo, Kazakhmys, Antofagasta, Xstrata, BHP Billiton and Vedanta Resources were up 3.3 to 9.2%.
       Banks recovered from Tuesdays sharp falls as investors re -evaluated the outlook for the sector following the ฃ31 billion($51.06 billion) in funding from the government agreed for Lloyds Banking Group and Royal Bank of Scotland
       RBS added 1.5%, while Barclays, HSBC and Standard Chartered gained 1.4 to 4.2%. But Lloyds shed 1.2% as its record ฃ13.5 billion rights issue weighed on it.Wall Street posted strong gains in early trade on Tuesday, with US blue chips up 1.2% by Londons close awaiting the Fed statement, and after the US Institute of Supply Management said activity in the ser vice sector grew for a second consecutive month.
       The Fed is seen affirming its stance that policies to support the economy will stay in place for some time while keeping interest rates near zero.
       Yesterday, the BoE is forecast to raise its quantitative easing policy and keep interest rates unchanged.
       The British ser vices sector showed its strongest activity since the start of the credit crunch in October 2008, the CIPS/Markit services PMI data showed.
       British consumer morale hit its highest levels in the last two months since April 2008, according to the Nationwide Consumer Confidence Index.
       Next was a top blue chip gainer, adding 5.6% after the high street retailer reported better-than-expected third-quarter sales and upgraded its sales and profit guidance for the balance of the year.
       Retail rival Marks & Spencer put on 6%, as it posted flat first-half profits, near the top end of forecasts as tight management of costs and stocks offset weak sales.
       Among other blue chip gainers, Aviva led life insurers higher, adding 5.5%, with the firm shrugging aside results that were slightly below forecasts as investors reacted positively to its solvency position.
       Travel firm Thomas Cook jumped 7.4%, lifted by an upgrade from Collins Stewart tobuy, with peer TUI Travel gaining 5.5%.
       British Airways took on 6.6% as UBS upped its rating tobuy fromneutral ahead of the airlines second-quarter results, due today.

EC SEEKS COURT RULING ON MANIT SHARE TRADING

       The Election Commission will seek a Constitution Court ruling on whether to disqualify Deputy Public Health Minister Manit Nopamornbodi from office for holding shares in companies related to the media or state concessions.
       Election Commission secretary-general Suthipol Thaweechaikarn said of 29 MPs the EC had referred for a Constitution Court ruling on whether to disqualify them for holding shares in prohibited businesses, four were ministers: Deputy Transport Minister Kuakul Danchaiwijit, Deputy Interior Minister Boonjong Wongtrairat, Deputy Prime Minister Sanan Kachornprasart and Manit.
       The EC panel found that of the four, only Manit held prohibited shares on the day he assumed his ministerial post on December 20 last year. The three others sold the shares before taking up their posts.
       Manit held 500 shares in True Corp from December 24, 2002- October 7, 2009 and 4 million shares in TPI Polene from January 21, 2004. He traded some shares 17 times, the latest on December 23 last year.
       Suthipol said the EC believed Manit had violated Articles 265 and 267, resulting in disqualification and removal from his ministerial post, in accordance with Article 182 (7).
       He denied the EC intended to harass Manit but it needed to check on whether holding prohibited shares should result in him being disqualified as minister.
       Manit said he respected the EC's decision but would not resign till the Constitution Court issued its ruling.
       He admitted he held 500 True shares, however since there were only a few hundred he did not sell them before assuming the post.
       Deputy Prime Minister Suthep Thaugsuban said it would be too soon to decide whether to reshuffle the Cabinet following the EC decision. He said the government would rather wait till the Constitution Court announced its decision.

Stocks slide ahead of Fed rate decision and jobless data

       The US economy has been kick-started into growth but stock investors still face an uncertain outlook as Wall Street gears up for comments from the Federal Reserve and a key report on employment this week.
       The Fed's monthly policy statement could signal fewer liquidity measures for markets, while nonfarm payroll data and the Institute for Supply Management surveys on the manufacturing and services sectors will give early indications of how the economy is faring in the fourth quarter.
       Investors are nervous that monetary and fiscal stimulus measures may be ended too soon.
       "If the government pulls out too early and they are not spending,[and] the consumer is not spending, you've got a big issue," said Anthony Conroy, head trader for BNY ConvergEx, an affiliate of the Bank of New York.
       US stocks slumped on Friday in a stark reminder that investors remain highly sensitive to signs of economic weakness. The Dow slid 2.6% on the week to close on Friday at 9,712.73. The Nasdaq lost 5.1% to 2,045.11 and the broad-market Standard & Poor's index shed 4% at 1,036.19.
       "You got a spurt that was stimulusdriven," said Fred Dickson, a market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon."The common belief right now is that the economy will move forward in the fourth quarter, but probably at a little slower pace than in the third quarter."
       Financial markets are bracing for a possible change of wording in the Federal Open Market Committee statement, expected on Wednesday at the end of its two-day meeting, which could hint interest rates are headed higher late next year.
       That, and any hint the Fed may start to pull back some of the liquidity it has been providing to markets through its debt purchases, could hurt stocks.
       "If you got language along those lines that suggested that they could be raising [rates] maybe a little bit earlier than what folks were expecting, then I would expect the market to sell off on that news," said Thomas Wilson, a managing director in the institutional investments and private client group at Brinker Capital in Berwyn, Pennsylvania.
       The number of jobs cut by employers is expected to have fallen in October.But a negative surprise like last month,when the unemployment rate hit a 26-year high, could undermine confidence in the recovery, driving stocks lower.
       The nonfarm payrolls data, due on Friday, are expected to show that employers cut 175,000 jobs in October, according to economists polled by Reuters.In comparison, September's job cuts totalled 263,000, far exceeding the forecast. The unemployment rate is forecast to rise to 9.9% in October from 9.8% in September.
       Third-quarter earnings season is winding down, but a few bellwethers could offer further insight into the economy.
       Earnings and the outlook from Ford Motor Co, the only US car manufacturer to avoid bankruptcy, could be an important indication of how auto sales might fare without government help.
       Ford's report today will be followed by automobile sales data the next day.Analysts and executives expect total US vehicle sales to rise to an annual rate of about 9.8 million units in October, up from 9.2 million the month before.
       US auto sales boomed in August as the government's $3 billion in "Cash for Clunkers" incentives drove sharp gains.
       Pulte Homes, the largest US homebuilder, is set to report earnings on Wednesday. Its comments will be watched closely for signs the housing recovery is finding firmer ground.
       Pending home sales, due today, are expected to be unchanged in September after jumping 6.4% in August.
       Talk of ending an $8,000 tax credit for first-time home buyers, which helped support the housing market, has ruffled investors. The tax credit is set to expire on Nov 30.
       Congress is considering a proposal to extend the tax credit. But before a deal is cut, it remains a wild card for markets.

Advisers named for SCIB sale

       Tisco Securities and UBS were engaged yesterday as financial advisers for the sale of the 47.58 per cent of Siam City Bank (SCIB) held by the Bank of Thailand's rescue fund.
       The other applicants for the job were Quant Group, Trinity Advisory 2001 and Phatra Securities.
       Tongurai Limpiti, the assistant governor supervising the Financial Institutions Development Fund (FIDF), said strategy, planning and also the experience of the financialadvisers in terms of human resources and organisation were most in line with the requirements of the FIDF.
       All qualifications met the terms of reference and gained the highest marks, he said.
       Tisco completed the paperwork on October 22 and started meeting to prepare for the share sale on the same day.
       It has been given a one-month deadline to finalise the plan.
       The central bank may sell its shares in Siam City Bank in the second quarter of next year if the market is favourable, Tongurai said.
       The FIDF seized the lender in the aftermath of the Asian financial crisis more than a decade ago.
       SCIB is the seventh-largest bank, with Bt413.8 billion worth of assets at the end of June, according to a central bank statement.
       Recently, Thanachart Bank expressed strong interest in FIDF's stake in SCIB.
       Thanachart has asked for shareholder approval to increase its capital by Bt40 billion to support its intention to buy SCIB.
       The Industrial and Commercial Bank of China is also a strong contender to buy the SCIB shares.

CNS offers staff joint investment programme

       Capital Nomura Securities launched a new employee joint investment programme for its staff featuring an openended term and no silent period on share sales.
       Takeshi Nishida, the president of Capital Nomura Securities, said employee joint investment programmes (EJIP) were quite popular in Japan as an employee benefit.
       Under an EJIP, staff allocate a set amount from their salaries to a fund to purchase stock in their companies. The employer will contribute a matching amount up to a set limit.
       "Actually, the programme's purpose is to improve staff welfare benefits. But another advantage is that it can also help increase the investor base, market and stock liquidity," Mr Nishida said.
       "Another advantage is that as a regular investment, members benefit from cost averaging."
       CNS staff may allocate from 500 baht up to 10% of their salaries to the EJIP programme, with the company matching contributions. At the end of each year,staff who hold on to their stock will receive a 10% bonus on top of normal company contributions.
       CNS is the third listed company in Thailand to launch an EJIP programme,following CP All and Bangchak Petroleum.
       In contrast to the other two companies,CNS will impose no silent period on staff, who may elect to sell their holdings once each month.
       Mr Nishida said in Japan, an estimated 80% of listed companies offer an EJIP scheme.
       "We plan to offer a consulting service for listed companies to set up EJIP plans as well. Many companies set up EJIP to reward their committed employees before an initial public offering," he said.
       Of CNS's 375 staff,55% have joined the programme to date.
       Nimit Wongjariyakul, chief operating officer, said staff are able to change the investment amount twice or stop autodeductions temporarily if necessary.
       Thanomsak Saharatchai, head of the research division, said the company foresaw a Stock Exchange of Thailand target of 712 points on an assumption of 23.5%EPS growth and a PE ratio of 14 times.However, if the PE ratio reaches 18 times,the SET index might reach 806-807 points.

Asian shares driven higher by corporate prospects

       BANGKOK 725.60-6.01
       Asian markets pushed to new highs yesterday, lifted by confidence in upcoming corporate results as well as surging oil prices.
       Better than expected data from US computer giant Apple as well as an upbeat outlook from machinery maker Caterpillar lifted sentiment.
       The Thai stock market lost 0.82% yesterday on profit-taking in energy shares.
       The Stock Exchange of Thailand (SET) composite index fell 6.01 points to close at 725.60 and the blue-chip SET-50 index dropped 5.31 points to 517.13.
       Losers overwhelmed gainers 231 to 140 and 85 stocks were unchanged with turnover of 6.1 billion shares worth 29.2 billion baht (US$874.2 million).
       The Thai baht was hardly changed,closing at 33.40-42 to one dollar compared with Monday's close of 33.39-41.
       The unit fell against the euro to close at 50.00-07 from the previous day's close of 49.85-92 baht.
       TOKYO 10,336.84+100.33
       Stocks rose yesterday to the highest level in almost one month after US shares scaled a new peak for the year on renewed optimism about the outlook for corporate earnings.
       The Tokyo Stock Exchange's benchmark Nikkei-225 index gained 100.33 points, or 0.98%, to 10,336.84, the highest closing level since September 24.
       The broader Topix index of all first section shares advanced 7.65 points, or 0.84%, to 913.45.
       Technology shares were among the rising stocks following encouraging corporate results from US computer maker Apple and a brighter than expected outlook from Texas Instruments.
       "Tokyo market gains will likely be sustained through the week on bullish signs from US corporate earnings,'Shinichiro Matsushita, market analyst at Daiwa Securities, told Dow Jones Newswires.
       Kyocera added 2.1% to 8,160 yen and Tokyo Electron climbed 1.4% to 5,770 yen after Apple announced a 47% jump in quarterly profit on brisk sales of its iPhones and computers.
       Construction machiner y maker Komatsu firmed 1.4% to 1,822 yen, hitching a lift with its US counterpart Caterpillar, which was expected to post strong earnings later in the day, dealers said.
       HONG KONG 22,384.96+184.50
       Shares rose 0.83% yesterday, in line with regional markets and following a surge on Wall Street, to hit a 14-month high.
       The benchmark Hang Seng Index finished up 184.50 points at 22,384.96.Turnover was HK$74.18 billion (US$9.57 billion).
       Dealers sent the market to its best finish since August 4 last year on confidence over upcoming third-quarter corporate data.
       Analysts expect the market to test 22,500 points this week.
       "Buying interest continues, supported by ample liquidity in the market," Ben Kwong, chief operating officer at KGI Asia Ltd, told Dow Jones Newswires.
       Regional markets rose yesterday after the Dow Jones index put on 0.96%, a more than 12-month high.
       The Hang Seng's property subindex rose 5.8%, with Sun Hung Kai Properties up 7.7% to HK$129.40 and Cheung Kong 7.1% higher at HK$107.30.
       China Merchants Bank was 3.5% up at HK$19.46 after shareholders approved its plan for a capital raising.
       SYDNEY 4,852.80+51.00
       Share prices gained 1.11% yesterday,with positive offshore leads boosting finance and resources stocks.
       The benchmark S&P/ASX 200 added 53.4 points to 4,846.2, while the broader All Ordinaries rose 51.0 points to 4,852.8.
       Turnover was 3.22 billion shares worth A$5.76 billion (US$5.35 billion),with 731 stocks rising, 455 falling and 335 flat.
       "When there is a rally, we've seen the money flow into resources, which is typical of a market that is looking to move higher," said CMC Markets analyst David Taylor.
       Rio Tinto grew 3.33% to 66.80 and BHP Billiton was up 2.12% at 39.91 as the weaker US dollar buoyed commodity prices.
       Woodside Petroleum put on 0.13% to 52.69, while Santos grew 2.56% to 15.64.
       SINGAPORE 2,711.09-0.61
       Shares closed flat yesterday, with investors in the mood for profit-taking following recent gains.
       The blue-chip Straits Times Index (STI) eased 0.61 points to 2,711.09 on volume of 1.98 billion shares worth S$1.29 billion (US$928 million). Decliners outnumbered risers 305 to 194, with 771 issues unchanged.
       Dealers moved in to sell after the index picked up big gains last week.
       It is "tough to sustain STI gains amid low and dwindling index volumes," said AmFraser Securities head of retail research Najeeb Jarhom.
       "Pr ofit-taking may become more prevalent (approaching) the critical 2,740-2,760 area during the current earnings season.'
       Analysts said despite data showing an economic recovery for Singapore was underway, investors remained cautious ahead of the release of third quarter earnings reports by listed companies.
       KUALA LUMPUR 1,265.74+4.25 Shares closed up 0.34% yesterday helped by gains in finance and plantation stocks.
       The Kuala Lumpur Composite Index gained 4.25 points to a new 2009 closing high at 1,265.74.
       Dealers said trading was robust with volume of 1.24 billion shares while decliners outpaced gainers 419 to 329.
       "Profit-taking accelerated in afternoon trade, especially among small-cap and penny-stocks. This is largely due to day traders and retail investors locking in profits," a dealer told Dow Jones Newswires.
       The dealer said institutional funds remained active, accumulating finance,plantation, glovemakers and select industrials to keep the benchmar k in positive territory.
       "The market is likely to sustain its winning streak for the rest of this week in the run up to Budget 2010 (Friday),"he said.
       SEOUL 1,659.15+10.08
       Shares closed 0.61% higher yesterday on gains in shipbuilders and some technology stocks.
       The benchmark KOSPI ended up 10.08 points at 1,659.15. Volume was 397.6 million shares worth 4.75 trillion won (US$4.07 billion).
       "It's positive to see that the index topped the 20-day moving average (around 1,655) and foreigners resumed strong stock buying. But sentiment was not that good," Jung Seung-Jae, an analyst at Mirae Asset Securities, told Dow Jones Newswires.
       Foreigners bought a net 224.6 billion won worth of shares, but local retail investors and domestic institutions were net sellers of shares worth 197.8 billion and 52.3 billion respectively.
       LG Display advanced 3.3% to 32,900 won following news that a power outage hit Corning's liquid crystal display glass manufacturing plant in Taiwan over the weekend.
       LG Electronics added 2.2% to 118,500 won and Samsung Electronics ended up 0.1% at 752,000.
       TAIPEI 7,753.52+2.20
       Share prices closed flat yesterday after profit-taking eroded early gains.
       The weighted index edged up 2.20 points, or 0.03%, to 7,753.52 on turnover worth TA$125.12 billion (US$3.88 billion).
       Losers outnumbered gainers 1,401 to 1,120, while 248 stocks were unchanged.
       But a total of 52 shares surged to their daily 7.0% limit against nine limit-down.
       "After all, the market has risen to the high levels of the year, and a number of investors chose to stay on the sideline," said Steven Huang of President Securities.
       However, while big caps lost momentum dozens of small caps were active ahead of the release of Microsoft's Windows 7 operating system.
       Young Fast Optoelectronics, a local leading touch-screen manufacturer,gained 1.47% to 413.5.
       Apple's release of stellar quarterly profit also helped lift the prices of local electronic makers which have business links with the US computer giant.
       WELLINGTON 3,252.56+31.64
       Share prices rose 0.98% yesterday, following gains in US markets and a strong performance by leading stocks.
       The benchmark NZX-50 index closed 31.64 points higher at 3,252.56 on turnover worth NZ$82 million (US$61.8 million). There were 54 rises and 20 falls among the 112 stocks traded.
       Stephen Wright at ASB Securities said the market was sluggish at the start of the day and turnover was light.
       The broader market was given a boost by gains in Fletcher Building and other leaders including Telecom,casino operator Sky City and Contact Energy.
       "It looks like institutions, possibly from offshore are buying our leaders,'Wright said.
       JAKARTA 2,502.22-18.70
       Shares ended 0.74% lower yesterday due to selling by banks on expectations that higher oil prices will stoke inflation.
       The Jakar ta Composite Index lost 18.70 points to 2,502.22 in light trade.
       "Foreign funds dominated selling on risk aversion due to higher oil prices," a trader told Dow Jones Newswires.
       Many investors are also awaiting President Susilo Bambang Yudhoyono's announcement today of his new cabinet.
       Liberal ex-general Yudhoyono was sworn in as Indonesia's president yesterday after winning a second five-year term in July with promises of economic growth and political reform.
       Coal miner Bumi Resources lost 1.70%to 2,850 rupiah, Bank Negara Indonesia decreased 2.44% to 2,000 and state-owned miner Aneka Tambang fell 2.83% to 2,575.
       SHANGHAI 3,084.45+46.18
       Shares closed up 1.52% yesterday led by financial and shipping companies amid hopes for improving economic fundamentals.
       The Shanghai Composite Index,which covers both A and B shares, was up 46.18 points to 3,084.45 on turnover of 167.2 billion yuan (US$24.5 billion).
       Wall St reet's performance Monday also boosted domestic investors' confidence in a global economic recovery, traders said.
       The Dow Jones Industrial Average closed up 96.28 points, or 0.96%, at 10,092.19 Monday, its highest close in a year.
       "Though further gains in stocks are supported by improving economic fundamentals, investors need to remain cautious as economic data due Thursday won't beat expectations,' Central China Securities analyst Zhang Gang told Dow Jones Newswires.
       China is due to release third-quarter economic data Thursday including gross domestic product.
       A senior official with China's top economic planning agency said on Monday that the economy grew between seven and eight percent year-on-year in the first nine months of 2009.

Market rallies as worries recede

       Thai stocks jumped 3.52% yesterday in a broad-based rebound as concerns about the health of His Majesty the King eased.
       The Stock Exchange of Thailand index closed at 717.12 points, up 24.4, in trade worth 29.77 billion baht. The index had fallen 7% over the previous two days on heavy foreign selling.
       Foreign investors, who were net sellers of nearly five billion baht worth of stock on Wednesday and Thursday,had a net buy position of 546.74 million baht. Local institutions were net buyers of 301.37 million baht in stock yesterday,while local investors were net sellers of 848.21 million. Energy stocks rose 3.66%yesterday, banks gained 3.05% and property stocks rose 4.14%.
       Analysts said market sentiment improved after Finance Minister Korn Chatikavanij urged investors to ignore unsubstantiated rumours and focus instead on the recovering Thai economy.
       He said regulators were investigating whether there was any concerted manipulation involved in the declines of the past week, which were touched off largely by foreign institutional selling on worries over the King's health.
       The Royal Household Bureau has stated that the 81-year-old monarch,
       who has been in hospital since midSeptember, is recovering steadily from a lung infection and was responding well to treatment.
       Thirachai Phuvanatnaranubala, the secretary-general of the Securities and Exchange Commission, said securities regulators were working with the police to pinpoint the source of the rumours that led to this week's broad sell-off.
       "For now, our preliminary investigation into the heavy declines [on Wednesday and Thursday] show nothing unusual suggesting market manipulation," he said."The selling was not focused on any one particular stock."
       Mr Thirachai said the SEC was asking local brokers for co-operation in the investigation.
       "Investors must exercise caution and use their own judgment when reacting to news. In any case, we believe that this problem has eased," he said.
       SET president Patareeya Benjapolchai said portfolio adjustments by institutional investors were also a key factor behind the correction this week.
       The SET index has been one of the best-performing markets in the region this year, gaining 53.95% since January.
       Mr Korn said the Thai economy was improving, with exports, tourism and corporate earnings all on the uptrend.
       The government is also taking steps to further develop the Thai capital market over the next five years, covering not only the SET but also the bond market, venture capital and other financial services sectors.
       Mrs Patareeya said a capital markets development fund would be established to support development programmes.
       The SET, with a market capitalisation of 5.7 trillion baht or around 60% of gross domestic product, is expected to rise to exceed the size of the Thai economy within five years, she said.
       Paiboon Nalinthrangkurn, chief executive of Tisco Securities, said the market rebound came as investor confidence strengthened because of the belief the rumours were false.
       "Market liquidity remains high. Further gains could come next week if there is no negative news," he said.
       Investors should monitor earnings reports in the US closely for cues on the direction of the markets.
       "I still think that the SET on a fundamental basis is overpriced. An index of 650 points would be more realistic.We can see how strong the correction was this week on negative news. If the market was closer to fair value, then the correction would not be this strong,"Mr Paiboon added.
       "I think investors should look forward and focus on the improved economy,"said Voravan Tarapoom, managing director of BBL Asset Management and head of the Association of Investment Management Companies."For BBLAM at least, we were net buyers over the past several days."

Solution Corner exec asked to clarify sale of shares

       The Stock Exchange of Thailand yesterday instructed Nitat Maneesilasan, a top executive and shareholder of Solution Corner (1998),to explain why he did not take any action to manage the company by informing share holders and investors without hesitation the complete information on his sale of his shares to investors.
       Nitat, as chairman and managing director, has the responsibility to safeguard tha rights of shareholders, even when he was the seller of shares in the company to Dirake Vongchinsri.
       This followed the company's filing on September 30 to the SET that it had received no contact from new investors after the SET asked if there was any news regadrding the company's takeover by the IT investor.
       But the company reported on September 29 that its major shareholders Nitat and Wantanee Maneesilasan,deputy managing director-had agreed to sell all their shares to Dirake. The company changed the buyer to three investors in information disseminated on Ocotober 1.
       Nitat and Wantancee hold a combined 65-per-cent stake of 32 million shares in the company.

Wall Street eyes second wind from improving earnings

       The US stock market is set to continue its winning ways this week as earnings season momentum builds. The reporting period is off to a strong start, but this week will be crucial to hopes that real revenue growth has returned, as opposed to earnings surprises resulting mostly from cost-cutting.
       Six Dow components and some major banks are among the companies due to report third-quarter earnings. If earnings continue the trend established by early results, investors may keep buying.
       "There's enough room for upward movement," said analyst Kim Caughey of Fort Pitt Capital Group in Pittsburgh."Not another 60%, but still enough."
       Expectations of economic recovery have fuelled a nearly 60% gain in stocks since the doomsday levels of early March.Last week the Dow gained 3.98% to close on Friday at 9,864.94, its highest in more than a year. The Standard & Poor's 500 rallied 4.51% to 1,071.49, just off a 12-month high, while the Nasdaq composite gained 4.45% to 2,139.28.
       But the breathtaking rally has some analysts wondering if the market has too much good news priced in. Analysts'expectations are loftier now, removing one of the catalysts that buoyed the market in the last two reporting periods.
       "The concern is heightened by the fact that analysts have been revising estimates up at one of the most aggressive paces in over a year," said Carmine Grigoli, chief US investment strategist at Mizuho Securities USA in New York."This was not the case in the last two earnings reporting seasons, when the market did so well."
       Despite revisions in various sectors,earnings are expected to fall more than 25% from a year ago, according to data compiled by Thomson Reuters. Arguably,the bar is still low, even if people have already factored this into projections.
       Earnings "should support the market averages where they are and maybe give a minor boost", said strategist Fred Dickson of D.A. Davidson & Co.
       Some of the big names scheduled to report this week are Intel Corp and Johnson & Johnson tomorrow, JPMorgan Chase on Wednesday, Goldman Sachs and IBM on Thursday, and Bank of America and General Electric on Friday.
       Investors will be watching to see if IBM and Intel benefit from the weak dollar as they earn substantial revenue abroad. IBM is expected to post earnings of $2.38 per share on revenue of $23.38 billion, while Intel is forecast to earn 27 cents a share on $9.015 billion in revenue,according to Thomson Reuters surveys.
       Goldman, meanwhile, has continued to increase profits even in tough times,so the others, particularly Bank of America, are better bellwethers. Financials are projected for a 57% increase in earnings from the same period last year,when Lehman Brothers imploded.
       "Banks are always important," Mr Grigoli said,"and investors will be looking for signs about loan losses and how fast they are escalating - and whether profits from banks' traditional business are able to offset those losses."
       The hope is that upside surprises for banks and the broader market will come from improvement in revenues and not just cost-cutting, said Tobias Levkovich,Citigroup's chief US equity strategist.
       Another key driver for the market this week, as in recent ones, will be the dollar.Its weakness (both perceived and real)has lifted the prices of materials, leading in turn to a jump in commodity-related stocks and sector indices.
       Key economic indicators are also on tap. September retail sales are due on Wednesday, with an expectation for a 2.1% drop, according to a Reuters poll.But data last Thursday showed samestore sales for September rose for the first time in more than a year, and the market could get an extra boost if retailers keep up the positive news.
       The Consumer Price Index for September, due on Thursday, is expected to show a 0.2% rise month over month and a yearly decline of 1.4%.

STRUCTURAL REFORMS URGENTLY NEEDED

       Despite upbeat global economic indicators, Thailand could be in for hard times without changes in the way business is done By Nina Suebsukcharoen
       "Under the Thai system we say we welcome foreign investment, but our laws block it, if in reality we don't actually obstruct it
       Although there are clear signals that the global financial system is improving, and Thailand's institutions also show potential to grow again, there is work to be done yet to ensure a bright future, said Anusorn Tamajai, dean of Rangsit University's Faculty of Economics.
       He added that belief that the global financial giants will recover is clearly demonstrated by investor confidence lately in their stocks.On top of this, governments are steadily getting the money they pumped into these institutions back.
       This improved outlook of course benefits Thai financial institutions, which have weathered the global economic storm better than some of their counterparts elsewhere because they were not so heavily invested overseas and also had low exposure to collateralised debt obligations (CDOs). These institutions now have the potential to grow due to two key factors - the government's intention to borrow up to 800 billion baht for investment,and the improved performance by some export industries such as cars and electronics.
       But while this is very encouraging, Mr Anusorn warned that unless real structural economic reforms are implemented, Thailand may still be in for hard times ahead.
       "There have to be financial, regulatory and legal reforms," he said."For example,under the Thai system we say we welcome foreign investment, but our laws block it, if in reality we don't actually obstruct it.
       "So this leads to the nominee system, and this sort of system is not straightforward. We say we have opened up, but if that's so we should make it very clear and open up the legal framework.
       "We say we have opened up but our laws say there is a limitation. What then happens is that those who want to invest or do business here use the nominee system, and nominees are an avenue to corruption."
       Aside from this, tax reform is sorely needed,said Mr Anusorn, who is also director of the Research Center for Economic and Business Reform based at Rangsit. He then identified two objectives in implementing tax reform - to increase the country's competitive edge and to straighten out uneven income distribution.
       Although rural people across the world tend to earn less than urbanites, Mr Anusorn noted that in some countries there are better welfare and tax systems in place to alleviate the problem.
       He added that a lack of strategic vision was underlined by the Administrative Court injunction on Sept 29 suspending the operating permits of 76 industrial projects in the Map Ta Phut industrial zone in Rayong province.
       The government has been faulted for not doing enough to ensure that these big industrial projects had passed proper environmental and health impact screening.
       "There are 76 projects worth over 400 billion baht, but definitely for investment and economic growth to be sustainable, development has to be linked to quality of life of local residents and the environment," said Mr Anusorn.
       "However, because we don't have strategic and integrated planning, we give the goahead for projects without looking to see whether they should proceed."
       He said many of the projects should not have been been allowed in the first place,moved elsewhere or else the laws should be amended to make it clear that it is possible to expand existing industrial parks.
       "The court ordered their suspension because there are points which indicate that this cannot be done and people are really affected."
       While Mr Anusorn expects the government to find a way to get the projects started again,he noted that the issue has already affected the economy and undermined investor confidence.
       "This doesn't mean we shouldn't be concerned about the environment and quality of life. The issue is both legal and regulatory - it has to be cleared up so that this sort of a risk doesn't occur."
       He said another example of how good plans can be torpedoed is former prime minister Thaksin Shinawatra's idea to turn Prachuap Khiri Khan into the equivalent of the French Riviera. Today there are plans afoot to locate heavy industries in the province.
       Mr Anusorn is mostly against trying to work out a compromise without changes in the legal structure because that would only stretch the problem out, leading to a breaking point.
       "As long as you have a structural problem you need structural reform to solve the root of the problem. Constantly compromising won't solve it."
       Despite these deep-rooted problems Thailand is expected to post 3-4% economic growth in the fourth quarter of this year, with expansion to continue next year. But Mr Anusorn noted the growth here is the lowest in the region, and said this was because of the chances missed to draw investment when cash was flowing to Asia recently.
       "There is room for growth and growth is not a problem in the next six months if there is political stability and government stimulus measures such as Thai Khem Kaeng move ahead according to the plan," said Mr Anusorn.
       The Thai stock market is also expected to climb to 800 to 850 points from this quarter onward to the first quarter of next year. This is because not only does the whole bourse lag other Asian markets certain key sectors such as energy, petrochemicals, property and banks also trail.
       "But if private investment doesn't revive in the second half of next year when stimulus through government spending starts easing,then the economy will not move ahead,"said Mr Anusorn."The initial assumption is that government spending will occur and will also induce private investment to take place."
       Where bonds and fixed-income markets are concerned, interest rates will rise if the economy starts expanding and there is a revival of private investment. Government spending on its own will not push these rates up, but it would prevent them from falling any further, said Mr Anusorn.

BSEC aims to arrest market-share slide

       BFIT Securities (BSEC) expects to regain a market share of one percent this year,said a senior executive.
       Rumours that the company would cease operations were not true, he said.BSEC would hold on to its licences.
       "We're doing our best to get back to where we used to stand," said Mr Vorakit.
       BSEC's market share is down to less than 1% from 5% to 6% early this year.
       The March resignation of much of the firm's equity sales (marketing) team had hit revenue, which largely depends on brokerage fees, said Mr Vorakit.
       BSEC now has just 30 marketing staff,down from 200 previously.
       The company recently recruited seven marketing staff and is looking to hire more to hit 1% market share this year.
       The troubled broker faced a scandal in March this year after selling initial public offering shares of Thai Polycons (TPOLY) on the first day of trading. This caused TPOLY's share price to drop,significantly dampening the confidence of investors, and companies planning to list, in BSEC.
       The incident led senior executives to resign, taking scores of marketing staff and major clients with them.
       "BSEC now has 2 billion baht cash in hand that the company will try to use to create the most revenue in the safest way," Mr Vorakit said."The investment plan is being considered by the company's board."
       The firm has tried to cut costs and now focuses on internet trading in preparation for the future liberalisation of the securities industry.
       Shares of BSEC closed yesterday at 1.53 baht, down 3 satang, in trade worth 11.428 million baht.

Jittery Wall Street girds for corporate earnings season

       US stocks could hit more speed bumps this week if the start of the third-quarter earnings season offers little evidence that the economic recovery is gaining strength.
       With second-quarter earnings having been boosted primarily by cost-cutting,investors want to see if the latest quarterly results will show an improvement in revenues. That's a priority for investors because revenue growth is deemed a crucial indicator of consumer and corporate spending.
       The aluminium company Alcoa Inc,a Dow component, is scheduled to report on Wednesday, marking the unofficial kickoff of the season. Other marquee names on the calendar are PepsiCo, Yum Brands Inc, Costco and Monsanto Co.
       Investors are clamouring for more solid signs of economic stability after the Standard & Poor's 500 has climbed 51.5% from a 12-year closing low on March 9.
       By that score, the latest quarterly earnings are a high-stakes endeavour,with investors saying to Corporate America:"Show us the money."
       "Earnings have to be good enough to justify the run-up we've had," said William Rutherford, president of Rutherford Investment Management in Portland, Oregon."We haven't got all the problems solved by any means. We're still going to see bumps along the way."
       Indeed, surprisingly weak economic reports last week gave investors a cold reminder that the recovery will not be without hitches, even with the massive stimulus from the government.
       On Friday, the government's nonfarm payrolls report showed that US employers shed far more jobs in September than expected. The data put the stock bulls on the defensive. And this week could be just as daunting if there are few positive surprises.
       The Dow slid 1.84% last week to close on Friday at 9,487.67, a second straight weekly loss after the indices hit 11-month highs in September. The Nasdaq sank 2.05% to 2,048.11 and the S&P slid 1.84%to 1,025.21.
       Thomson Reuters data show that third-quarter earnings are forecast to drop 24.7% from a year earlier, a projection that gives companies a low hurdle to overcome following a surprisingly improved second quarter.
       "The next big thing we're going to talk about is earnings," said Ryan Detrick,senior technical strategist at Schaeffer's Investment Research in Cincinnati."Usually after the first couple of days,you get a feel as to what the overall trend is going to be."
       More takeover deals could also dictate this week's market action. A flurry of takeovers over the last two weeks has dominated the headlines as companies jostle to bolster their revenue streams in an uncertain economy.
       "With many companies' growth challenged, we are seeing the tip of the iceberg in M&A," said Scott Billeaudeau, portfolio manager at Fifth Third Asset Management in Minneapolis.
       Notable deals last week included Xerox's planned purchase of Affiliated Computer Services. And on Thursday,the Mexican brewer and bottler Femsa said it was in talks with several companies about a possible deal for its beer business.
       The economic calendar is light. But today the spotlight will be on the Institute for Supply Management's September index of activity in the services sector.According to a Reuters poll of economists,the ISM non-manufacturing index, or services index, is forecast to have rebounded to 50.0 after hitting 48.4 in August.
       Investors also will pay attention to monthly sales reports, due on Thursday,from major retailers to assess how consumers are faring as the job market remains weak.
       Federal Reserve chairman Ben Bernanke will also be on centre stage with a scheduled speech on the central bank's balance sheet before a conference in Washington on Thursday.

BANKS MAY GAIN FROM QE3 RESULTS

       The flow of foreign investors' cash continued to influence Thai shares this week. We believe it will play an important role in driving the Stock Exchange of Thailand to trade at a price-to-earnings ratio of 14, or 736 points.
       The level is resistant in the short term, while the support level is at 715 points.
       Commercialbank stocks are expected to extend their momentum this week, driven by thirdquarter earnings. The broker estimates seven banks under its coverage will deliver a 13.9-per cent quarter-on-quarter and 7.3-per cent yearonyear rise in their thirdquarter earnings, to a combined Bt22.2 billion.
       Top picks are Bank of Ayudhya, Krung Thai Bank and Kasikornbank. There is speculation Siam City Bank may sell a stake to partners.
       We predicted several midsized marketcap stocks would turn around in the second half of the year, and their prices are below fair value. The outstanding stocks are Preuksa Real Estate, whose secondhalf earnings will be driven by ownershiprights transfer of its four condominium projects and Board of Investment privileges; and Rojana Industrial Park Co, which will realise a profit from its affiliate Ticon Industrial Connection, assets sold to a property fund and the company's strong land sales.
       Hospital and hotel stocks are also recommended "buy", due to their seasonality. One study shows stocks in both sectors always outperform the stock market in October, with the number of patients increasing in the third quarter and hotels entering their high season.
       The outstanding stocks in these groups are Dusit Medical Services and Central Plaza Hotel Co.
       Sukit Udomsirikul, assistant managing director of the Siam City Research Institute
       The positive momentum in the stock market will continue this week on the back of capital inflows if the US dollar's weakness lasts a while longer.
       If the dollar rebounds to more than 1.48 euro, the Stock Exchange of Thailand Index will be affected. Stoploss for shortterm investors is at 710 points.
       Risk factors this week are:
       -Manufacturing output index in August started to slow down and this raises concerns about the global economic recovery.
-If the 76 projects in Map Ta Phut Industrial Estate can not go ahead, it will hurt the country's overall economic and investment and the planned merger and acquisition of 4 firms under PTT - PTT Chemical Plc (PTTCH), PTT Aromatics and Refining Plc (PTTAR0, IRPC Plc (IRPC) and Thai Oil Plc (TOP).
       We estimated that PTTAR's and PTTCH's 2010 earnings would be hurt by 33 and 1325 per cent respectively.
       PTT tends to revise downward its 2010 earnings forecast by 9 per cent while Glow Energy Plc (GLOW) by 8 per cent. However, these stocks would underperform the market.
       - CBOE VIX Index last week rose significantly while return of the US' 10year government bond set the fivemonth low and these are warning signs that Wall Street would see wild volatility soon.
       Investment strategy: Accumulate PTT Exploration and Production Plc (PTTEP) (on an anticipation that it would gain benefit from Map Ta Phut's case), profittaking PTTCH and PTTAR and speculative buy KBANK, BAY, Quality Houses Plc (QH), PS and Khon Khan Sugar Industry Plc (KSL).
       Tisco Securities
       Foreign inflows likely to extend market rally
       Despite increased volatility on Wall Street and regional markets, we expect the SET's sevenmonth rally to be extended in the near term.
       High liquidity, low interest rates and growing signs of economic recovery are the main catalysts behind the rally. Renewed weakness in the dollar is also likely to support foreign fund inflows.
       Although the market is not particularly cheap, we still see good value in selective stocks, particularly consumer plays and companies expected to benefit from the government's second stimulus package (SP2). We also expect greater interest in bank stocks ahead of the third quarter results.
       Note that we have recently revised up our 201011 earnings forecasts for major banks based on our expectations of stronger loan growth over the next two years.
       However, shares of PTT Group companies and Siam Cement could come under nearterm pressure after a court decision last week to suspend the operations of 76 new projects in the Map Tha Put Industrial Estate (MTPIE) and nearby areas in Rayong province with a combined total investment of Bt400 billion.
       The government has already lodged an appeal against the court ruling. The major risk is that the issue could damage foreign direct investment and equity fund inflows if it is not quickly resolved.
       Sectors that stand to benefit from a projected upturn in consumer spending next year should outperform the market, notably auto, telco and financial services including consumer finance.
       Kavee Chukitkasem, Assistant Managing Director from Kasikorn Securities
       Last week, SET index was extremely volatile, shifting up and down the whole week. However, we believe the market movement was apparently just following series of announcements of the U.S. economic figures.
       In our view, most indicators signaled that the economy is still recovering, but investors seemed to be more concern about the unemployment rate which was higher than expected and was the main factor that brought down DJ last week.
       Apart from the negative impact from external factors, negative factors inside the country also put no less pressure on the stock market after the Administrative Court ordered to halt construction of 76 projects in Map Ta Phut area.
       The court order directly hurt project owners, mainly companies of PTT group and SCC group, and as well weighed down the economy as whole since it will discourage investment flow, especially from overseas.
       This will also trigger a negative chain reaction to other sectors such as industrial estates and banks that provided loans to these projects.
       However, despite negative impacts from the U.S. and internal factors, economic indicators of other countries still showing improvement.
       Note that IMF had already revised up forecasts, while the Thai Fiscal Policy Office had increased Thai economic growth estimates.
       We also believe that the problem at Map Ta Phut will be resolved soon. Therefore we maintain our positive view on the stock market in medium term, despite possible market correction in the short term.
       We believe the stock market will zigzag up to 800pts by late this year or early next year while expect the index to zigzag up to 730-pts within next week with supports from the world economic recovery theme and the results of the "Thai Khem Kaeng" project (project to stimulate Thai economy).
       Therefore, we recommend speculating stocks in banking (Bangkok Bank (BBL)) and property (ItalianThai Development Plc (ITD), Sian Property Development Plc (AP), PS) sectors.
       However, shortterm investors must be more cautious since the market may correct at anytime soon as we've seen a warning signal when SET index hit our and most analysts' target for this year at 733-pts. We then recommend investors to buy stocks with a stop loss line or sell if the SET drop below 705-pts given risk that the index may drop further to 690-pts.
       However, medium term investors have no need to reduce their portfolio since we believe the market correction is a good buying opportunity.
       We maintain "Overweight" on Bank (BBL), Exploration and Production (PTT Exploration and Production Plc (PTTEP)), Hotel (CENTEL), Hospital (Bumrungrad Hospital Plc (BH)), ICT (Advanced Info Service Plc (ADVANC)), Commerce (CP All Plc (CPALL)), Agriculture (Charoen Pokphand Foods Plc (CPF)) and Media (GMM Grammy Plc (GRAMMY)).

Thousands queue for a piece of Bangladesh's largest IPO

       Thousands of people waited in line outside banks in Bangladesh yesterday as subscription for the country's largest initial public offering opened,an event seen as a key test for the national stock market.
       The country's top mobile phone operator, Grameenphone, is raising $70.4 million through the IPO sale of 69.44 million shares.
       The company,62% owned by Telenor of Norway, has raised the same amount from institutional investors.
       Grameenphone says the money will be spent on network expansion and developing its information technology infrastructure.
       The face value of the shares has been fixed at 10 taka (seven cents) with a 60 taka premium on each share. A private investor can buy a maximum lot of 200 shares.
       Pensioners, students and workers converged on 500 bank branches nationwide to deposit money for the subscription,which closes on Oct 18.
       "In the first two hours some 400 people have submitted applications," said Saiful Islam, a manager of private Dutch Bangla Bank at the capital, Dhaka.
       "My family is making five applications for a maximum 1,000 shares. It's a lifetime opportunity to be able to buy Grameenphone shares," said Hanif Ahmed,a retired government official.
       Grameenphone is 38%-owned by Grameen Telecom, a subsidiary of microfinance giant Grameen Bank, which was set up by 2006 Nobel peace prize winner Muhammad Yunus.
       It has around 21 million of Bangladesh's fast-growing 46 million cellular subscriber base. It is also the country's largest private company in terms of revenue.
       Securities and Exchange Commission chief Ziaul Haq Khandekar hailed the IPO as a "watershed event", saying it would bring "depth and maturity" to the country's share market.
       "The GP IPO will bring qualitative change to the market. I think the move will instill confidence in other major companies to follow suit. It will make the stock market more stable and the centre of our economic activity," he said.
       Dhaka Stock Exchange president Rakibur Rahman said Grameenphone's IPO was the largest in the country's history,dwarfing the previous record set by a private bank by more than four times.
       The DSE, which hosts companies with a market capitalisation of around $15 billion, is a minor player compared to other Asian bourses.
       Silmat Chisti, capital market head of issue manager Citigroup Global Market, an affiliate of Citibank, said trading of Grameenphone shares was expected to start by end of November.

Diversification still essential

       The worst of the global recession may have passed but enough uncertainties remain to make investors desperate for expert advice.
       Suppamas Payakapan, an analyst at Phillip Securities, said asset allocations could be divided into three markets:high-risk (commodities and equities),medium-risk (debt instruments) and lowrisk (money market).
       "Investors should allocate 30% of their investment portfolios to high-risk assets,50% to debentures and 20% to the money market," she said.
       For the high-risk market, investors may increase their weighting on gold to about 10-15%, as it is a safe asset and good for speculation, while stocks could make up 10% and oil 5%, she said.
       "Growth stocks are still attractive as they have been on an upward trend in the past three months and are expected to continue rising until the first half of next year," she said.
       Attractive sectors remain energy, property and banking, as they tend to move with broad market conditions, while oil prices are likely to rise further into the next year.
       Patchara Samalapa, deputy managing director of Kasikorn Asset Management,said that although the economy had picked up, it had not yet reached the point where everyone could feel relieved.Stock prices could be affected by risk factors in the fourth quarter relating to economic uncertainties and the performance of listed companies.
       "When investors are not sure whether stock prices will go up or down, as at this time, they should make sure of liquidity," he said.
       At the moment, he said, investors should not lock their money into long-term government bonds that mature in three to five years as they will not be able to get money when they want to invest in stocks as the market goes up.
       Somjin Sornpaisarn, CEO of TMB Asset Management, said investors should have a neutral asset allocation among three areas: equity, short-term fixed income,and long-term fixed income.
       "Equity has been on a rise during this period. The money market offers quite little return and 10-year bonds yield only 4%, so it's not the time to overweight your investment on either type," he said.
       "It's better for investors to consider the period of investment to match the money they have."
       Investors might add commodities in a ratio of about 10-15% of their portfolios,said Dr Somjin. Diversifying to overseas markets to reduce risk is also essential.It could be 20% for domestic equity and 10% overseas.

Wall Street sinks on job losses data, heads into corporate earnings spell

       Having lost some of its swagger from a powerful six-month rally,Wall Street heads into corporate earnings season with renewed skittishness about prospects for an economic recovery.
       The latest economic data has cast fresh doubt on the notion of a strong recovery from recession, and investors will look to the upcoming quarterly reports for signs of whether Americans are emerging from a long retrenchment.
       In the week ending on Friday, the blue-chip Dow Jones Industrial Average slid 1.84% to 9,487.67, in a second straight weekly loss after the indices hit 11-month highs in September.
       The technology-rich Nasdaq composite sank 2.05% to 2,048.11 and the Standard & Poor's 500 broad-market index slid 1.84% to 1,025.21.
       The losses came on disappointing economic news, highlighted by a shock unemployment report on Friday that showed the labour market reversing course after several months of improvement.
       Official data showed job losses accelerated to 263,000 in September and the unemployment rate rose to 9.8%,pouring cold water on the notion of a quick and strong recovery from the nearly two-year-old recession.
       "The market practitioners who believe the recovery is based on sand are seeing a lot of evidence in this and other recent data," said Cary Leahey, senior economist at Decision Economics.
       The market now looks to corporate earnings, starting with Wednesday's report from aluminum giant Alcoa the first of the blue chips to report results - for clues on the direction of economic activity.
       "The looming question is whether investor expectations are now set at a reasonable level or too high considering the challenges that continue to face the US economy," said Fred Dickson, market strategist at DA Davidson & Co.
       "We feel comfortable forecasting a nice rebound in corporate earnings even in a weak growth economy as most companies have trimmed costs thereby significantly raising productivity of their workforce during the last 18 months."
       The market is still sitting on hefty gains after a solid 15% rise in the JulySeptember quarter for the Dow and S&P 500, and a six-month rally of around 50%.
       Analysts say the market needs to see evidence the economy is on the mend to add to those gains.
       "US equity markets may have racked up their finest third quarter in seven decades, but the low hanging fruit has almost certainly been picked, as the last few days can attest," said Sal Guatieri at BMO Capital Markets."Less-bad news no longer will sustain the rally, as the economy must now prove it can sustain a recovery. But the mish-mash of indicators released this week, showing the economy took two steps forward in the summer and a big step back in early fall,was less than inspiring."
       RBC Wealth Management analyst Bob Dickey said the rally still has legs since the worst of the economic crisis is over.
       "The market is already in a modestly oversold condition, and as such, could bottom and rally again at any time," he said.
       In the coming week, the market will also ponder a purchasing manager survey of the services sector by the Institute of Supply Management and data on the US trade balance.

GRIM JOBLESS RATE POUNDS STOCKS

       "Reality is beginning to set in that the recovery is going to be very slow and erratic."
       US Stock fell for a fourth day and the dollar slumped as employers cut more jobs than economists forecast, increasing speculation the Federal Reserve will postpone the withdrawal of monetary stimulus as the economy struggles to recover.
       The dollar fell against the euro as the economy shed 263,000 positions in September, more than the 175,000 median estimate of economists in a Bloomberg survey.
       Gold rallied as an alternative to the falling greeback. Treasuries declined as yields near the lowest in more than four months hurt demand before next week's US$78 billion (Bt2.6 trillion) in auctions. Oil fell after two days of gains.
       "Reality is beginning to set in that this recovery is going to be very slow in developing and erratic as it goes on," said Bruce Bittles, chief investment strategist at Robert W Baird in Nashville,Tennessee, which manages $18 billion, Tennessee, which manages $18 billion. "The market was up for seven straight months. It's due for a correction."
       The Standard & Poor's 500 Index fell 0.5 per cent to 1,025.21. The Dow Jones Industrial Average lost 21.61 points to 9,487.67.
       The S&P 500 declined 1.8 per cent this week on concern the seven-month rally in equities has outpaced prospects for an economic recovery.
       The benchmark index umped almost 15 per cent in the July-to-September period to give it a two-quarter advance of 34 per cent, the biggestsince a 42 pr cent surge in the first half of 1975.
       September's job losses increased the unemployment rate from 9.7 per cent in August to 9.8 per cent, the highest since 1983.
       Since the recession began in December 2007, 7.2 million positions have been eliminated, the biggest declien since the Great Depression.
       "The number shows this is going to be a slow and painful recovery process,_said Jay Mueller, who manages about $3 billion of bonds at Wells Fargo Capital Management in Milwaukee. "We will have sub-trend growth for an extended period. There is still too much debt in the system and if we keep losing jobs like this we will not get income growth."
       The dollar touched the strongest level versus the euro in almost a month before erasing its gain as concern rising unemployment will push back the timeline for an interst rate increase by the Fed. Interest-rage futures contractrs on the Chicago Board of Trade showed a 38-per-cent chance the central bak would increase the fed funds target from the range of zero to 0.25 per cent through March, compared with 45 per cent odds on Thursday.
       Over the past few months, the dollar tended to appreciate on negative US economic reports as investors sought safety in the world's main reserve currency.
       That pattern may be changing as bad news cements expectations for the Fed to keep its interest rates low while other central banks may start to increase theirs, according to Laurent Desbois, president in Montreal of Fjord Capital, a currency fund manager with $750 million under management.
       Oil for November delivery fell 99 today's economic numbers point it out very clearly," said James Cordier, port folio manager at OptionSellers.com in Tampa, Florida. "Main Street is not getting better, and that is where the rubbler hits the road as far as demand goes."
       Gold futures for December delivery climbed $3.60, or 0.4 per cent to $1,004.30 an ounce on the Comex division of the New York Mercantile Exchange. This week, the metal gained 1.3 per cent.
       "It's about the buck," said Frank Lesh, an analyst at FuturePath Trading in Chicago. "The dollar is, has been and will be the main driver for gold."

FIFTH HONG KONG IPO MAKES AN INGLORIOUS DEBUT

       Glorious Property Holdings yesterday fell as much as 20 per cent on its first day of trading in Hong Kong, the fifth straight debut slump for an initial public offering in the city.
       The stock dropped 15 per cent to 3.76 Hong Kong dollars(Bt16) at the close.Glorious Property last week raised HK$9.9 billion in the largest Hong Kong IPO by a Chinese property company in two years.
       The developer joins four other companies,including China South City Holdings,in falling on the first day in the past two weeks.
       The declines have heightened investors' concern the market's appetite for offerings is waning as Wynn Macau prepares to start trading on October 9 after raising US$1.63 billion (Bt54 billion).
       "It's a massacre," Francis Lun,general manager at Hong Kong-based broderage Fulbright Securities, said in an interview."Right now investors have lost all confidence in new shares and I can't see this changing in the near term."
       Hong Kong's benchmark Hang Seng Index,which has rallied 80 per cent from a four-month low on March 9,fell 3.1 per cent this week,the biggest drop since the five days ended August 21.
       Wilmar Intrnational,the world's biggest palm oil trader,said on September 30 that it has not decided on the timing of a Hong Kong share sale of its China assets and is monitoring market conditions.Wilmar is delaying the sale to mid October or latr from October 5 initially, FinanceAsia reported.
       Glorious Property "is the latest in a line of IPOs that has performed worse than people were expecting", said Andrew Sullivan,a sales trader at Mainfirst Securities Hong Kong."The next IPOs will probably have to be priced more attractively."
       JPM organ Chase, deutsche Bank and USB were the global coordinators in the Glorious Property IPO.
       companies including Wynn Macau and Yingde Gases Group,China's largest independent onsite supplier of industrial gases,will start trading on the Hong Kong exchange next week.
       Wynn Macau,the casino company led by billionaire Stephen Wynn,is scheduled to start trading in Hong Kong on October 9.It raised HK$12.6 billion,selling shares at HK$10.08 apiece,the top end of the price range.

       "It's a massacre.Investors have lost all confidence in new shares.I can't see this changing in the near term."

STOCK EXCHANGE EXPECTS 100,000 AT SET IN THE CITY

       THE Stock Exchange of Thailand is targeting 100,000 securites-rekated investment accounts at the fair,SET said yesterday.
       They will be able to attend the presentations of 30 listes companies at the event,to be held on November 12 and 13 at Paragon Hall.Nine commercial banks will offer a full array of investment products at this,the sixth annual SET in the City
       Securities houses,mutual fund companies, gold futures brokerages,insurance companies,the Securities and Exchange Commission, the Revenue Department and the lslamic Bank of Thailand are among the exhibitors.
       The Innovative and Investment stages are the highlight of this year's show.
       The Innovative stage will host uniqus investment products and investment views while the Investment Stage will be the venue for seminars by securities analysts.
       The main seminars are "Point Out Economic Direction and Stock Market in 2010 " and "In-depth Economics... Crisis or Investment Opportunity?"
       Long- term equity funds and retirement mutual funds will likely receive a warm welcome from investors as the year-end is approaching ,Patareeya added.
       "The fairgoers are expected to open 10,000 securitiesrelated investment accounts at the fair."