Comment: Thai baht strengthening

We’ve longed thought aloud that the Thai Baht should eventually return to THB 25/usd over the past few years and we continue to think this going forward. Yes people yell at us, “charlatan! fools! It will never go back!” and we’ve been hearing the same comments since we begun working here in 2004-5 when the baht was at high 30’s to the USD.

Look, the fact remains that the¬†Thai¬†economy is growing faster than the US, the 10 year yield rate is higher than the US, and almost every other SE Asian currency is near or has surpassed its pre-’97 levels. And its only going to be a matter of time before the Thai Baht does as well.

Also our lovely chartist friend, Ploy, sent around this comment below last month with her thoughts from a technical level on the baht. Enjoy!

Thai baht has been the strongest currency in the region for the past month. Many are wondering where it will be likely to head to. Here is some thought on the Technical analysis side.

thai baht Continue reading Comment: Thai baht strengthening

Comment: CPALL and MAKRO

So the essentials of the deal are as follows:

  • CPALL agreed with MAKRO’s major shareholder, SHV Nederland B.V., to acquire its 64.35% (154.4m shares) in Makro @ THB 787/share.
  • Funding is 90% debt financing, 10% internal CF, no equity capital call.
  • Purchase price of MAKRO is @ 42.9x of 2013F (as per analyst’s estimates)
  • Debt boosts net d/e to 5x, cpall expects debt/ebitda to declinef from 6x to 3x within 3years

What do we care about:

  • No equity dilution
  • 2014 – first year of full consolidation
  • Similar deal size was BIGC and Carrefour 2 years ago and look how well the stock has performed (no equity dilution either)

So what?

  • Well on the simplest basis we just combine the two net profits and see what the impact is on CPALL’s #’s are, its as basic as that and as long as there isn’t any equity call then on a 3-12 month basis we are very happy holders of cpall.