Asean-round up

In Thailand – up 7.5% since the New Year – the market has been helped by a raft of initial public offerings and a boom in cross-border takeovers by Thai companies.

But the Stock Exchange of Thailand is also becoming a hub, connecting its securities trading with that of Malaysia and Singapore, and helping Laos develop its fledgling equity and bond market.

It has also signed a memorandum of understanding to help Burma do the same. FYI, the Laos market, tiny and illiquid, is up 17% in the last five weeks.

The Philippines has for decades resolutely defied the expectations that have been heaped upon it since the end of the Marcos era, and underperformed with monotonous regularity.

However, the fundamentals do look convincing now: low inflation of about 3-3.5%, growth estimated at above 6% through to 2016, strong consumption, election spending and rising foreign investor interest.

The economist Nouriel Roubini, who predicted the 2008 financial crisis (and got the recovery dead wrong by continuing to maintain a determinedly gloomy attitude to the world economy ever since), had surprising comments for the Philippines earlier this month, predicting 7% growth and praising its economic success based on fiscal and governance reforms.

He even predicted the rating agencies would grant it an investment grade rating – a stamp of approval for foreign investors. At present, the country’s rating is a notch below investment grade.

By contrast the economy in Vietnam is now in the doldrums and experts pointing to decades of economic mismanagement as the cause. Many Vietnamese are now saying their trust in the government has gone. Sounds familiar?

Another exciting year is in store for initial public offerings (IPOs) in Malaysia. A recent report by HwangDBS Vickers Research identified close to 30 companies that may be floated on the Malaysian bourse this year.

Among the biggest IPOs set for this year are Malakoff Corp Bhd, Iskandar Waterfront Holdings Sdn Bhd, the power assets of 1Malaysia Development Bhd (1MDB), AirAsia X and possibly Westports Malaysia.

Corporate bonds issuance hit nearly RM124 billion (S$49.7 billion). A record amount of nearly RM146 billion was raised through corporate bonds and IPOs, an 89% jump over the RM77.2 billion raised in 2011, going by capital market statistics released by the Securities Commission.

The corporate bond market raised 73% more than the RM71.2 billion raised in 2011; it was the highest amount raised to date, with sukuk issuances amounting to RM97.5 billion or 79% of total bond issuances.

The increase in government-guaranteed assurances boosted growth in private debt securities (PDS) and 2013 issuances are expected to be even higher.

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