This is an interview from Barrons of Leon Cooperman and Steve Einhorn of Omega which manages USD 8.5 bn mainly in equities, so when these two share their viewpoints, one had better pay attention. There are a few thoughts I found interesting but the key comment that caught my eye was:
Are you worried that the Fed will have a hard time unwinding its balance sheet?
Einhorn: First of all, it is not an issue that investors will have to contend with for at least the next 12 to 18 months, which captures a good deal of most investors’ time horizons. Second, the Fed does not have to actually sell assets off its balance sheet. All it has to do to unwind its balance sheet is to let those securities mature. And as they mature over time, the Fed’s balance sheet declines. This notion of an abrupt end to QE is wrong. What they will do is taper it off. They have been buying $85 billion a month of securities. So, for example, when they begin to taper that off, whenever it happens, they’ll go to $75 billion a month, then $65 billion, or whatever the number happens to be. Tapering off should not be a jolt to economic activity or the markets. All they have got to do is let these assets mature and roll off.
Source: Barrons
This news has local traders and brokers buzzing this morning regarding Shin Corp (ticker: Intuch) and how an ”unclear nationality” of one of the major shareholders may cause the stock to be ineligible for the MSCI Index (see the statement below)
What’s the impact on the stock? Well a temporarily sharp sell off in the AM, as of 10.17am there’s been thb 3 bn traded on the stock 1/4 of today’s value traded thus far. But this just reminds us of when LH was delisted from the MSCI index a few years back and the stock dropped purely because of that, so its only fund flow, short term, no impact on the co’s fundamentals.
| STANDARD ANNOUNCEMENTS – May 21, 2013 at 03:33 PM GMT |
| Announcement for May 21, 2013 at 03:33 PM GMTTHIS IS AN ANNOUNCEMENT FOR THE MSCI GLOBAL STANDARD INDICESUPDATE ON THE TREATMENT OF SHIN CORPORATION PCL IN THE MSCI THAILAND INDEXCOUNTRY CODE TH SECURITY NAME SHIN CORP PCL STANDARD NOT ADDED LARGE CAP NOT ADDED MID CAP - ASIA APEX 50 - TYPE OF EVENT QUARTERLY INDEX REVIEW EFFECTIVE DATE 03-JUN-2013 Re: Announcement sent on May 17, 2013 MSCI has clarified with the Stock Exchange of Thailand (SET) the Following the clarification, the Foreign Inclusion Factor (FIF) of Shin For further information on MSCI indices or MSCI data, visit our web site at MSCI Global Client Service: THIS IS AN ANNOUNCEMENT FOR THE MSCI GLOBAL STANDARD INDICES End of announcement. |
VGI
VGI ramps up skytrain, Airport Rail Link coverage — VGI will begin selling ads in cross-category packages for the skytrain on October 1. The move will help to increase its gross profit margin by 1-2% and boost revenue to Bt1bn this year. In its cross-category package, clients can buy ad spaces on billboards and LED monitors on stations, train bodies, signs inside train carriages and on platform screen doors. The package will build an advertising network and help clients to reach more target customers. (Bangkok Post, 22/05/13)
Comment: They have a wonderful monopoly on the BTS advertising.
Notable Transactions
Buy(s): THB 2 bn
Sell(s): THB 837mn
Tarun, of Thai Native Gems, and I have been friends since high school and while I give him a lot of stick, I do respect his viewpoint when it comes to gems and diamonds, despite the fact I’ll never understand why women love it. He just published an article today talking about diamonds as an investment which I found interesting. Finally if you have a look @ the rest of his site you’ll learn far more and (promotion alert!) if you actually want to buy a gem/diamond Tarun would be happy to accomodate your needs.
Diamonds as an Investment
A very common question we get asked from our client’s is, “Are Diamonds a good investment?” As I do have some financial background, graduating with a finance degree & working in an investment bank before re-entering back to my family business, I do have a slight advantage in knowing what a good investment means.
By definition an investment (in my words) is an asset which appreciates over time and therefore allows the buyer to make some money. It should beat inflation or normal deposit interest rates – which are virtually zero today because of non-stop crisis propping up in the Western World for the last 5 years. It is also important that the asset is in demand, liquid and market price is transparent for it to be a successful investment.
So, how do diamonds fare as an asset class when we compare to above definition?
Source: ThaiNativeGems
The market has been driven almost purely by the technology sector (advanc, dtac, and true) for the month as the sector as a whole is up +9.8% MTD and a whopping +160% over a 12 month period. This week the NESDB will release Thai 1Q13 GDP (which should be rubbish because of the baht’s strengthening), it’ll be interesting to see how the the BoT reacts, although I have my doubts on them cutting rates.
This has been an ongoing debate since the beginning of this year. The conspiracy theorist inside thinks that the government just wants cheaper funding for its massive infrastructure plans. However I’d like to believe that the BOT will remain independant and I don’t expect interest rates to decline unless inflation declines for a couple quarters.
The growth slowdown may give the Bank of Thailand scope to join a global wave of monetary easing, after resisting pressure from the government in recent months to lower borrowing costs and curb inflows that last month drove the baht to a 16-year high. Finance Minister Kittiratt Na-Ranong, who has led calls for lower rates, has said the central bank must cut by more than a quarter of a percentage point or implement capital controls.
Source: Bloomberg
AMATA
AMATA gears up for rush of land sales — AMATA said hundreds of land sales are expected to be sealed in the second half of this year, mostly in the car industry. Viboon Kromadit, a director and senior VP said each deal will require hundreds of rai of land, with the largest deal at 400 rai. Amata has set a sales target of 3,000 rai this year. If the deals are closed as expected, its sales will rise by at least 10-20% from 2,800 rai last year. (Bangkok Post, 18/05/13)
Comment: amata, hemraj both benefit from te continued expansion of automotive manufacturers here in thailand
BTS
BTS extension fares slashed by five baht — Fares on the On Nut-Bearing skytrain extension route were cut from Bt15 to Bt10 yesterday. Bangkok governor Sukhumbhand Paribatra said the fare reduction was aimed at reducing the financial burden on the public and encourage people to use public transport. (Bangkok Post, 18/05/13)
Stock News
QTC switched on for power growth
QTC Energy Plc, formerly known as QTC Marketing & Service Co Ltd, was established on June 9, 2003 with registered capital of 10 million baht to conduct the businesses of manufacturing and distributing electricity distribution transformers. Director Poonphiphat Tantanasin discusses the company’s strategy and outlook.
What is QTC’s business model?