NWR building on a strongly diversified base

Established in May 1976 and listed on the Stock Exchange of Thailand since 1995, Nawarat Patanakarn Plc (NWR) is one of Thailand’s largest construction and engineering companies, with registered capital of 2.21 billion baht (1.55 billion paid up). With more than 30 years of experience in Thailand and other countries, NWR has a wide range of technical capabilities, enabling it to undertake various types of work. Polpat Karnasuta, director and president, discusses the company’s strategy and outlook.

What is NWR’s business model?

Our primary business is construction in general civil and structural work, property and energy among others. We have a wide range of technical capabilities and combined with our pre-cast concrete and steel fabrication plant, which we use to supply our own projects and outside customers, this allows us to service the majority of projects available. Most of our work is in Thailand but we have completed projects in Myanmar, Laos, Cambodia, Vietnam and the UAE. Finally, we have expanded our business with property development and wastewater treatment plant operation and maintenance.

Continue reading NWR building on a strongly diversified base

GPF sells some Thai shares, ING says buy

I commented earlier this week that I have an unnatural fear for the month of September as because its the month which I always travel overseas and there has always been a negative event in September since 2007 that rocks the markets badly.

Given that the SET has just fallen some 2% over the past 2 trading sessions and Bernanke speaking next week it would be remiss to not be slightly nervous with some portions of the portfolio.

But enough rambling onto the post, saw these two articles in the same day, one saying that the Thai Government Pension Fund is paring its domestic investments in the SET

The Government Pension Fund (GPF) has revised down its proportion of the domestic investments it has been making through local asset management firms, the better to cope with the recent market volatility.

Its domestic investment is now down to 33.5 billion baht, from 60 billion last year, said secretary-general Sopawadee Lertmanaschai.

Source: Bangkok Post

and another article from ING saying that the market will hit 1,314 points this year. Just goes to show the different viewpoints abound when investing.

ING Funds (Thailand) says the Stock Exchange of Thailand index will likely hit 1,314 points this year and earnings per share will grow by 23%, in line with the positive capital market trend until 2014.

Monrat Phadungsit, the chief investment officer, said emerging markets including Thailand’s share market remains an attractive destination for global funds, as the region is currently the highest growing economy, one least affected by the global financial crisis.

Source: Bangkok Post

Local PE and VC firms to pop up now?

There has been very minimal PE and VC onshore based activity in Thailand because quite simply the capital gains tax on such investments are too high, 30%. But with news that the SEC is slowly but surely relaxing regulations and despite that hubbub from the US that PE and VC firms are evil. I’m actually looking forward to this helping budding Thai entrepreneurs, I’ve always criticised with friends, and anybody who would care to listen, that it is virtually impossible for a Thai entrepreneur to crack the top 10 families here, due to lack of funding available unless you knew someone with deep pockets. So here’s hoping that there will be a change coming within the next decade.

Somchai Thaisa-nguanvorakul, chairman of the executive committee of SNC Former, said his company is a good example of how PEs can help small companies. Lombard Investment, a US-based private equity company, invested 600 million baht in it.

He said Lombard has helped SNC improve its operations and financial management, resulting in higher revenue _ from 8 million baht to 8 billion within six years of its investment.

Source: Bangkok Post

FDI up 62% in first 7 months

Despite the floods at the end of last year, foreign direct investment in Thailand was up at whopping 62% in the first seven months of this year. This can only bode well for several industries here, industrial estates, transport (airport), and banking. The main statistic I found interesting was the Singaporean investors were ranked second in terms of # of applications and value of applications.

Foreign direct investment (FDI) over the first seven months of the year (Jan-July) was up62 per cent from the same period last year, Board of Investment (BoI) secretary-general Atchaka Sibunruang said on Tuesday.

Source: Bangkok Post

S&P Revises Thailand’s Banking system upwards

S&P (rating agencies who believes them today?!) revised Thailand’s banking system upwards mid-week, but regardless it does finally demonstrate that Thailand has in fact improved a lot in the past 10 years despite the on going political rubbish.

We revised our industry risk score for Thailand (foreign currency BBB+/Stable/A-2, local currency A-/Stable/A-2, axAA/axA-1) because, in our view, the banking sector’s institutional framework has improved to “intermediate risk” from “high risk”, as our criteria define the term. This reflects the sustained improvement in the performance of the banking sector regulator since the Asian financial crisis of 1997. In our view, the regulator has become relatively more proactive toward reducing the banking system’s vulnerability to financial crises. We expect it to identify problems early on and quickly remedy them.

They made a couple interesting points during the announcement:

  • Thailand has low income levels and an underdeveloped infrastructure system
  • Expect loan growth to remain high in 2012
  • Economic imbalance in Thailand as low risk
  • Regulations & supervision are now broadly within international standards
  • Current government “highly supportive” towards domestic banking

Source: Reuters

Management Trades 20.08.12 – 24.08.12

Notable Transactions

Buy(s):

  • BGH – The President is back to buying more shares in his co, another THB 100 mn
  • BJC – Massive buying here by the family, THB 600 mn

Sell(s):

  • No one specific company sticks out but there were several sellers, if management/directors/owners are thinking its time to take some slight profit shouldn’t we?

Others:

  • BLAND – Hello K. Anant!

 

Sector Update 20.08.12 – 24.08.12

Given the relative lack of news macro wise the Thai market continued to move upwards on the back of telco’s paying dividends + the 3G auction *likely* to happen in October this year. Going forward its the usual….slow econ growth out of Europe, China trying to balance out a slower growth path and the US staring at Bernanke for info; now I’m worried for September..why? Every September I’m overseas and since 2007 you’ll see that September is one of the worst performing months each year, and with European politicians having finished their summer holidays and returning to debate about the euro crisis I’m not looking forward to next month at all!

 

 

 

 

 

 

Continue reading Sector Update 20.08.12 – 24.08.12

Comment: TSTH Plc

I’ve been following this company for the past few years waiting for Tata Group to somehow improve its operational efficiency and yet it hasn’t been a success because of its horibble investment in a mini blast furnance that has dragged on its earnings for the past 3 years. Should the company simply be able to offload it, take a one time loss, then I wouldn’t be too surprised to see a re-rating on the counter.

President and chief executive Peeyush Gupta said two separate options have been pursued in the last three months. The MBF complex, which also includes power and sinter plants, is potentially to be sold to partners who have access to raw materials such as those in India, Africa and the Middle East.

Note: Please do your own research, make up your minds, and see the disclaimer for the legal babble, thank you!

Source: Bangkok Post

 

Thai public gives a passing grade to the Pheu Thai government

I’m not going to rant on thai politics, I prefer to sleep with a calm mind, but given the potential that the current government has on hand today to actually push through more policies, projects etc etc I’ve been disappointed by their performance thus far, then again no Thai government has impressed me since Thaksin’s first term in charge.

The University of the Thai Chamber of Commerce asked 1,200 ordinary people and 800 businessmen to evaluate the performance of the government.

Thanavath Phonvichai, the vice-president for research, said the government got a marginal passing mark for economic policies that still resulted in growth despite last year’s floods and the euro-zone crisis.

Source: Bangkok Post

Thailand’s GDP Growth +4.2% YoY

The National Economics and Social Development Board (NESDB) reported that the Thai 2Q12 GDP expanded +4.2YoY%, improving from the +0.4% YoY in 1Q12 and on a quarterly basis expanded +3.3% QoQ.

Chart 1: Thailand quarterly & Annual GDP Growth YoY%

Chart 2: Thailand’s Quarterly GDP Growth YoY%

Key drivers appear to be:

  • Consumption +5.9%
  • Investments: +10.2%
  • Government spending: +5.6%
  • Exports: +0.9%
  • Imports: +8.5%

So what?

Well the economy has been driving mainly by investments as a function of the recovery from the floods last year and consumption. Going forward well exports will suck, no doubt about that, Europe’s impact will continue to last throughout the rest of the year. The only additional upside I can see for the Thai economy is if the government can finally get its act together and go ahead with its massive amount of infrastructure spending projects which would flush the economy with THB 3 tn. But alas they are still fighting internally….

Source: NESDB