Thai Rates cut to 2.5%

“Against the backdrop of continued financial stability concerns, the Monetary Policy Committee (MPC) thus voted unanimously to reduce the policy rate by 25 basis points from 2.75% to 2.5% per year,” the… 

Source: Bangkok Post

Argh! Yes I was surprised by the rate cut, we could see the bond market was expecting it, however I was hoping that the BOT would hold off on this for a while, ok time to stop pretending to be a central banker and lets just look @ what may happen next.

  • Baht will weaken short term – (bond & equity market sell offs)
  • Exporters rejoice (wouldn’t be surprised to see 2Q13 & 3Q13 numbers looking better on average) 
  • Cost of funding decreases – Great for any low margin business that relies on short term financing
  • Banks will be affected as their NIM’s will decrease slightly
  • Asset prices should continue to increase  over time. 

Stocks in the news (scc, oishi) 30.05.13

OISHI

OISHI has reset its sales target at Bt14bn, down from the earlier Bt15bn. It expects food to contribute 42% and beverages 58% this year

Comment: Looks like the company is still yet to full recover from the floods in 4Q11

SCC

SCC buying more in sanitaryware, paper — The SCC board has given the nod to some new investments involving its paper unit and sanitaryware. Thai Containers Group Co Ltd (70:30 JV between SCG Paper PCL and Rengo Co Ltd (Japan)) will spend Bt888mn to acquire 75% in Dyna Packs Co Ltd and Orient Containers Co Ltd. Both are Thai producers of corrugated containers with combined capacity of 121K tons/year (+14% to existing capacity for Thai Containers Group Co Ltd). It will also boost its stake in Siam Sanitary Ware Co Ltd to 71.4% (from 35.7%) and The Siam Sanitary Fittings Co Ltd to 90.6% (from 44.8%), for Bt2.6bn, transferring from Toto Group. Meanwhile, SCC’s entire 40% stake in Toto Manufacturing (Thailand) Co Ltd will be transferred to Toto Group for Bt368mn. (SET)

Stocks in the news (ah, ratch) 29.05.13

AH

Aapico sure of strong growth — AH expects positive growth for the rest of this year based on the solid car sales in the first quarter. President Yeap Swee Chuan said the Thai car industry will likely continue to rise, with 2.5mn vehicles expected to be produced and sold this year. Its Ayutthaya factories, completely flooded in 2011, are now back at full production capacity, equipped with new machinery, he said. (Bangkok Post, 29/05/13)

Comment: The President had been buying up a lot of shares in his co during the 1q13. 

RATCH

New targets — RATCH said it is keen to buy a stake in Australia’s Macquarie Generation and two more power firms as part of a drive to expand into overseas markets. Macquarie Generation is one of a list of firms that New South Wales aims to privatize. Macquarie Gen’s two main coal-fired plants have capacity of 4,640MW. (Bangkok Post, 29/05/13)

Comment: Its quite rare to see a government enterprise expand as capably as RATCH has over the past 5 years

Sector Update 20/04 – 23/04

Japan dropping 7% in a day, a so-so 1Q13 earnings season, the first 3 months of the year had a baht that was too strong for most exporters and a market that had risen 17% YTD, can’t say we are too surprised. We normally expect for the market to drop for a period of 3-4 days before looking to re-enter. This week we have the MPC meeting on the 29th May, I don’t expect any rate cuts.

00sum

01set       02mai

Continue reading Sector Update 20/04 – 23/04

Stocks in the news (thaibev, true) 27.05.13

ThaiBev

ThaiBev takes aim at Myanmar, F&N buy opens the door for drinks giant —Thai Beverage Plc (ThaiBev) is seeking a greater presence in Myanmar through its partnership with Fraser and Neave Ltd (F&N), the Singaporean firm acquired earlier this year by the Thai drinks giant. Thapana Sirivadhanabhakdi, ThaiBev’s president and chief executive, said the company is also considering importing Myanmar beer into Thailand, where many migrant workers from Myanmar live. F&N, which was taken over by ThaiBev, led by the Thai billionaire Charoen Sirivadhanabhakdi in a deal worth S$13.8 billion (Bt327bn) owns a stake in Myanmar Brewery Ltd. (Bangkok Post, 27/05/2013)

TRUE

True Corporation chosen to build Myanmar’s internet gateway — True Corporation is expanding its international internet footprint to Myanmar to serve rising online data use and the influx of foreign investors there. Supoj Mahapan, the general manager for international services, said True is spending Bt20mn to build international internet gateway (IIG) infrastructure in Myanmar. It also recently entered into a bilateral mobile roaming agreement with Myanmar Posts and Telecommunications. True is the first Thai telecom firm to enter Myanmar, said Mr. Supoj. (Bangkok Post, 25/05/2013)

Comment: Both co’s just demonstrate further evidence of Thai companies ability to expand into Myanmar.

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?

QTC Energy Plc is an electricity distribution transformer manufacturer that was founded (as QTC Marketing and Service) in 1996. Our transformers are sized from one to 30,000 kVA (kilovolt-amperes) and we have the capacity to manufacture on average 3,000 units per year. The majority of our business is in Thailand with the private sector representing 40%, the public sector 35% and exports the remainder. Continue reading QTC switched on for power growth

Dynanmic Duo

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

 

INTUCH not added to the MSCI?

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
domestic/foreign classification of the major shareholders for Shin Corporation
PCL.

Following the clarification, the Foreign Inclusion Factor (FIF) of Shin
Corporation PCL will remain below 0.15 as part of the May 2013 Semi-Annual Index
Review. Consequently, as the free-float adjusted market capitalization of Shin
Corporation PCL is less than 1.8 times of the minimum free float-adjusted market
capitalization required for the MSCI Thailand Index, Shin Corporation PCL will
not be added to the MSCI Thailand Index as part of the May 2013 Semi-Annual
Index Review.

For further information on MSCI indices or MSCI data, visit our web site at
www.msci.com, or contact:

MSCI Global Client Service:
Americas Client Service: 1.888.588.4567 (toll free)/+ 1.212.804.3901
EMEA Client Service: + 44.20.7618.2222
Asia Pacific Client Service: + 852.2844.9333

THIS IS AN ANNOUNCEMENT FOR THE MSCI GLOBAL STANDARD INDICES

                                   End of announcement.
                                   Further announcements may occur as needed.