Sector Update – Weekly

The SET continued to decline last week because reasons that I’ve mentioned several times, the Euro area issues, US slowdown and continued worries about the Chinese economic slowdown. Going forward all we are going to hear in the news is the Greek election coming in mid-June, issues about Spanish banks, US worries and the Chinese government pushing liquidity into their system. We actually think this is an attractive time to accumulate (albeit at a very slow pace) as several mid caps have fallen 20-30% in the past month.

      

Continue reading Sector Update – Weekly

Management Trades – Weekly

Tremendous amount of buying last week by management of public c0mpanies here!

Notable Transactions:

Buys:

Banpu – Family and director purchase additional shares in the company, total purchased in the past month is near THB 100 mn

BLAND – He’s having fun again and joining the party is K. Ausakoon buying and selling the shares multiple times last week

CGS – The family buys THB 60 mn worth of shares

SIRI – The stock has lost a bit of its momentum falling inline with the market, the president continues to pick up shares here.

Sells:

BLAND – welcome to the party K. Ausakoon!

Thaksin’s pushing hard to come back

This coming Wednesday Gen Sonthi Boonyaratglin, Chairman of the House Committee for National Reconciliation plans to table a “reconciliation bill” to Parliament that would provide blanket amnesty to all politicians and public servants (civil servants, soldiers, police etc..) for any political crimes committed since 2006 [note: convenient year to choose!]

Thanachart put out flow chart of the likely timetable and process required for the bill to be passed.

So what does this all mean? 

Pheu Thai (PT) currently has strong support within the country and the opposition whether it be the democrats (still reeling from their abundant corruption during their term) or the PAD (who?!) aren’t likely to pose much of a threat. So with the opposition weak the likelihood of political turmoil is minimal, no political turmoil means likely no meddling from the military. We’ve already seen in the past few months how Yingluck and PT is mending the fences with formerly aggrieved groups (won’t state whom for obvious reasons).

We have upcoming elections next year with Pheu Thai likely to increase their number of seats in parliament, currently at 265/500 and analysts expecting close to 300.

So…lets just imagine Thailand is a company, it has displayed consistent earnings growth of 4-6% (excl 2008) of GDP growth for the past decade, it has a clean balance sheet with low Debt-GDP levels and management while most definitely not perfect, is far better than the alternative and will be able to push through their agendas for infrastructure spending and other pro-growth policies, its geographically well located to take advantage of the growth from Vietnam, Laos, Cambodia and Myanmar, and its a natural second hub for companies outside of Singapore. Doesn’t this just sound like a fantastic investment opportunity?

Quick side note:

Yes Gen Sonthi was one of the key leaders of the military coup that kicked Thaksin out and officially his Matubhum Party is an opposition party (any takers how long this will last?) and yes he’s now pushing through a law that will exonerate Thaksin of his convicted crimes. Incredible what a couple of baht can accomplish. Say what you want about the man, but Thaksin has played this political game beautifully.

Howard Woon Services – Singapore

I just noticed a large increase in visits to this site…most of you were sent to this link http://thaicapitalist.com/2011/10/thank-yous/ where I thanked Howard Woon for allowing me to interview his clients of Shareinvestor Thailand for the Bangkok Post. If you hadn’t realised, its because of Shareinvestor Thailand that it is so easy to find public information about listed Thai companies as they manage the IR website section for near 150 public companies here.

Howard passed late last week in Singapore after being in a coma for the past 2 weeks and if you’d like to pay your respects with us friends and his family, night services are being held at 69 Florissa Park, Singapore 789652 this coming Wednesday 30/05/12 @ 8pm and the funeral service on Thursday 31/05/12 at 2.30pm for burial at Chua Chu Kang Christian Cemetery.

His sudden passing has been a major shock to us all and I’m going to miss our daily rants on bbm about life in general, sharing investment thoughts and ideas on the market, figuring out new ways on how better to enjoy life and his incessant nagging on getting me to join him for more rounds of golf.

Life can be stupidly short. Lets enjoy it :)

Charts – Weekly

Ploy has put together a plethora of charts and information, she’s still hesitant on the market as whole and lists out key factors to look for.

SET made a low at 1,101.59 last week.

Although there have been rebound for 3 consecutive trading days, and the SET made a beautiful rebound from the support at 1,100, I am still bearish.

Some of you may have started buying now that the sky seems so bright and there seems to be sunny days ahead in the SET. Well, buying is applicable, if you really, really, need to buy.

Continue reading Charts – Weekly

Unique mining services brings coal to Thailand

Unique Mining Services Plc (UMS) imports coal from Indonesia for distribution to domestic industries, mainly in Bangkok and nearby provinces. An affiliate of Thoresen Thai Agencies (TTA), its primary customer base is in food and beverages, pulp and paper, and textiles. Coal imports are tailored to match the boiler engineering specifications of each client. To expand its customer base, UMS participates in coal procurement auctions held by cement and power generation companies. Vichai Chuensuksawadi, director and acting managing director of UMS, discusses the company’s strategy and outlook.

What is UMS’s business model?

UMS is a coal logistics company. In simple terms we source coal, transport it to Thailand (often on Thoresen vessels), unload it at one of our two ports in Samut Sakhon and Ayutthaya and, finally, classify and distribute the coal to our customers according to their needs. We basically provide an end-to-end service with international import and domestic distribution.

Where does UMS source its coal?

We source primarily from a network of eight reliable suppliers in Indonesia who fall into two categories _ they are either mine operators or traders such as Sojitz, Samsung and LG. We chose Indonesia because of abundant availability of coal, advantageous logistics costs and superior coal specifications. For example, the ash content of coal from Indonesia is lower than that of coal from South Africa, and Thai industries typically cannot burn very much ash.

So, while we are open to sourcing from other countries, we have to take coal cost and specifications into consideration.

Continue reading Unique mining services brings coal to Thailand

Thai Airways has a communication problem?!

Yesterday the THAI board announced the “termination of employment” or in plain english  the firing of Dr. Piyasvasti. The reason according to the Chairman K. Ampon is “Not that he is an incapable president. But so far, there has been poor unity in communications between him and the board of directors. To achieve THAI’s earning goals this year the contract must be terminated.”

A quick background on what Dr. Piyasvasti had accomplished during his time at Thai Airways:

1. He turned around the company when it was nearly bankrupt in 2008 and strengthened the company’s financial status.

2. His cost-cutting plan by over THB10bn in 2009 was successful

3. He was in the middle of implementing a further cost-cutting plan of THB 6 bn this year

4. His fuel hedging program also helped THAI to turn a profit in 1Q12 despite rising jet fuel prices and lower passenger yields from competition.

A communication problem? Was that the best excuse the board of Thai Airways could come up with?! How many times was he hit with a stupid stick?!

Gahhhh!! Silly things like this frustrate me, Thai Airway’s has been one grossly mismanaged publicly listed company ever since they listed in the early 90’s and since the end of 1999 the stock price has returned -60% (ignoring dividends).  Everyone knows Thai Airways has been run by baboons that don’t look further than their own pockets and ensuring their own friends and family become management/pilots/attendants (quick note: a friend of mine is working there and did actually get her position through merit).

If anyone at Thai Airways is reading this please please realise a few simple facts, Thailand is well-known as a tourist destination, we have one of the busiest airports in the world (top 10 in terms of passenger arrivals), Thai Airways should be the flagship carrier for the region, whenever someone flies on Thai Airways coming to Thailand they should have a memorable experience, it should be THE first impression of Thailand. So if management could for once stop thinking about their own benefits and actually start thinking long-term and actually add value, then at the very least Thai Airways could perhaps be near its potential.

Full disclosure: We have and never had any position in THAI

 

Charts – Weekly

Ploy has a bearish outlook for the SET for the time-being, whilst she thinks there may be a rebound this week, she expects things to worsen further on a technical basis.

Nothing can stop the SET from, errr, falling now.

This is not the right time to buy more stocks in hope to average down the cost of your portfolio. This is not the time to buy so-called cheap stocks, no matter how tempting they seem. This is the time to Short. Period.

The SET may continue the fall, reaching towards 1,100-1,080, as mentioned many times, with temporary support at around 1,127-1,120. Although, there may be rebound this week, I expect the rebound to last only in short term. The resistances that the rebound must breach are 1,160 / 1,180 and 1,202-1,205.

 

Continue reading Charts – Weekly