Microlending – Thai style!

Despite what people say, we think the impact of the village fund that Thaksin implemented years ago can already be seen with the growth in each and every region outside of Bangkok, the expansion of Tesco’s, BigC’s, 7-11s, motorcycle sales, pick-up sales, consumer goods and electronics in the past 10 years is evidence of it, and when combined with the increase in agricultural prices there’s no surprise that the upcountry regions are booming. Its been great for business and several of the listed entities on the market, yes its a way of buying votes but companies are benefiting, GDP keeps growing, expansion continues, however our main fear is default but when this will rear its ugly head we don’t know.

THERE are an estimated 120,000 microfinance initiatives worldwide but Thailand’s “Village and Urban Revolving Fund” lends more money to more people than any other. The scheme’s outstanding loan portfolio totalled $4.9 billion in 2011; the number of active borrowers that year stood at 8.5m. Those numbers are swelling. Yingluck Shinawatra, the Thai prime minister (pictured above), announced plans late last year to inject $2.6 billion in additional capital into a network of nearly 80,000 village banks, which her brother, Thaksin Shinawatra, who was prime minister between 2001 and 2006, created with a stroke of a pen ten years ago.

Source: The Economist

Stocks in the news (CPALL, HITECH, PLE, TTA, WHA) – 04.01.13

CPALL –  Targets 13% sales growth in 2013 — CPALL targets 13% sales growth for 2013 and plans to add 550 more branches to achieve a total of 7,300 branches by the end of this year. In addition, the company plans to open one more distribution center in Samut Sakhon province this year. (Khao Hoon, 04/01/13)

Comment: Used to love this stock, still a great company, however valuations have me worried

HITECH – Revenue to grow 15-20% this year — HTECH targets revenue this year to grow by 15-20%, while maintaining its net margin at 20%. The company will focus more on the automotive market and also expand into other Asian markets, especially in Indonesia. Revenues for 2012 are expected to grow by more than 25%. (Khao Hoon, 04/01/13)

Comment: On valuation numbers alone it looks interesting, though never looked at the company

PLE – Turnaround this year — PLE expects a turnaround to profit this year. It targets revenues to grow by 15-20%, backed by current backlog of more than Bt8bn, which is expected to be recognized this year. The company also plans to bid for more projects. (Khao Hoon, 04/01/13)

Comment: Company seems to turnaround every 3 years, we used to trade it, missed it on this one

Continue reading Stocks in the news (CPALL, HITECH, PLE, TTA, WHA) – 04.01.13

Wall Street Economists React: Full Fiscal Cliff Not Avoided

If you thought Thai politics was asinine, the yanks aren’t doing that much better, the ongoing fiscal cliff debate has only proven this. The markets reaction seems to be “wooo at least something got done” but thats akin to hearing a parent say “I take care of my children.”  The wall street economists have come out with their thoughts and the tone comes across as “Ok well, there’s still a lot left to be done,” see below and click the link for more.

–On the positive side, the compromise averts a mix of tax increases and spending cuts that would have done more harm than just push the nation into another recession. It would have also seriously undermined the hard-earned healing occurring in the housing sector and in many families’ stretched balance sheets. With that, our economy would have experienced a significant air pocket, and would have faced an even more difficult subsequent recovery. As important as this gain is, it is unfortunately not overwhelming. The hard-negotiated political compromise does little to address the consistent headwinds that undermine growth, hold back corporate investment, and dampen job creation. If the objective were to promote employment, the nation’s most urgent challenge, the compromise prolongs crippling political uncertainty rather than removes it.–Mohamed El-Erian, Pimco 

–The full “fiscal cliff” has not been avoided. The deal just enacted implies a significant tightening of fiscal policy this year. Payroll taxes are going up and federal spending is being cut by the amount anticipated in the BCA. These measures will be a drag on growth, starting in the current quarter. Taken at face value, the deal appears to entail somewhat more fiscal drag for 2013 than we had assumed in our forecast. Second, we now face a difficult debate over raising the debt limit. An increase in the debt ceiling will have to be done by around the end of February (at this point, Treasury has not given a specific date; this may come within the next few weeks, but it has been indicated that there is about two months of headroom). The upcoming negotiations are likely to be even more difficult and contentious than the ones just completed. –Lewis Alexander, Nomura Global Economics

Source: WSJ