What happened this week 17/06 – 21/06

Thailand

  • Central bank throws red flag on loans — The BoT ramped up its warning that escalating household debt in recent years is posing a risk to the country’s financial stability and warrants close monitoring. BoT data shows household debt accelerated to 78% of GDP last year from 63% at the end of 2010. The rapid pace is a cause for concern considering the fi8gure stood at 44% at the end of 1Q03. Household debt totaled Bt8.82trn in 2012 or Bt439.000/houseold based on 20.1mn households at the end of the year. (Bangkok Post, 15/06/13)
  • Thai capital market braces for exodus of offshore investors — The Thai capital market is bracing for an exodus of foreign investors as the US Federal Reserve will soon tighten its unprecedented monetary easing stance, said BoT governor Prasan. “Only part of the funds has been pulled out of the bond market. The country’s foreign reserves, however, can cushion risks even if all funds are moved out as foreigners’ holdings in Thai bonds is far smaller than foreign reserves at around US$200bn,” he said. (Bangkok Post, 18/06/13) Continue reading What happened this week 17/06 – 21/06

Stocks in the news (mcot) 21.06.12

MCOT

MCOT: In digital TV deal. MCOT has reached an agreement with CAT Telecom to use its telecom infrastructure across the country as gap fillers to supplement its upcoming digital TV broadcasting services from its 140 existing broadcasting sites. This will help the company to expand its digital terrestrial TV network in the country as planned. (Source: The Nation)

Comment: Similar to BEC, this company will essentially lose its positioning in the market when the digital tv programme comes online

Interview: Quality over quantity remains the focus for dimet in quest to be no.1

Dimet (Siam) Plc (DIMET) produces and sells high-performance protective coating to oil and gas and related industries such as petrochemical plants, refineries, power plants and oil and gas exploration platforms in the Gulf of Thailand as well as timber finishes, architectural and industrial coatings for automotive parts and gas cylinders. Chairman Suraphol Rujikarnchana discusses the company’s strategy and outlook.

dimet_pic
Suraphol: Easy to raise capacity

What is Dimet’s business model?

Dimet covers many varieties of quality coatings, and we consider ourselves a one-stop paint manufacturing firm. Currently we offer protective, timber, decorative and industrial coatings. We are also the original-equipment manufacturer to Suncoat, our Japanese business partner, and re-export our OEM products to Indonesia and Vietnam. Continue reading Interview: Quality over quantity remains the focus for dimet in quest to be no.1

SHIbor!

When we saw this chart on the 19th June…
20130619_china6

Source: Zero Hedge

…our hearts sunk for a moment as we feared an event similar to 2008 with Lehman going under and repo/overnight rates globally spiking, thankfully the 19th the Chinese government has come out saying that they will provide liquidity to the market. But we definitely aren’t sleeping better @ night with rates raising, impacting government cost of funds in Europe and the carry-trade unwinding from Emerging Markets. I can honestly say we are happy with the falling markets as we can cherry pick into new holdings however we are closely monitoring the VIX, CDS Spreads, repo rates, amongst others (lessons learnt from ’08). 

Stocks in the news (aot, anan) 20.06.13

AOT

AOT gets screening fee nod — AOT can charge air passengers for advance passenger processing, under a Civil Aviation Board decision yesterday. AOT is expected to introduce the system this year and the board has capped the charge at Bt50/passenger. AOT will install an advance passenger processing system (APPS) that will speed up immigration checks at the airport. The APPS will allow customs officials, airport and airline staff and immigration police obtain the profiles of passengers from their countries of origin. (Bangkok Post, 20/06/13)

Comment: AOT has always been a cheap stock for the past few years, but we just don’t trust management

ANAN

Ananda: Looks to Japanese. Ananda Development (ANAN) has signed a JV agreement with Mitsui Fudosan Residential, one of leading property developers in Japan. Each party will hold 49% in the JV with initial capital of Bt1.8b. The JV will co-invest in real estate development projects in Thailand. ANAN expects to announce the details of its first joint project very soon. (Source: Bangkok Post)

Comment: We’ve never quite liked this company due to its product positioning within a very crowded Bangkok Property market.

Stocks in the news (becl, kce) 19.06.13

BECL

EXAT approves hikes in toll fees — The Expressway and Rapid Transit Authority of Thailand board has approved a proposal seeking the raise tolls for the urban and suburban expressways by at least five baht. EXAT governor Aiyanat Tinapai said the toll increase for the urban expressway network will come into force on September 1 and the toll hike for the suburban network will take effect on Nov 1. (Bangkok Post, 19/06/13)

Comment: Well no real surprises here, things are supposed to be cleared up by August

KCE

KCE allots Bt4.7bn for plant — KCE plans to more than double its production capacity by building a Bt4.67bn factory in Bangkok’s Lat Krabang district on 20 rai adjacent to its existing plant in Ladkrabang Industrial Estate. MD Bancha Ongkosit said the new factory, with a production capacity of 2mn sq ft per month, will serve rising demand from existing and new customers when it is fully operational in three years. (Bangkok Post, 19/06/13)

Comment: The company has recovered very well from the floods in 4Q11, and despite the global economy issues, its order book has continued to grow well

Sector update 10/06 – 14/06

Last week was another wonderful ride down for the SET on the back of continued foreign selling, our analysis indicates that they have already sold back down to Feb ’12 levels so unless the Fed comes up with something unexcepted mid-week we’re under the impression that most of the selling is over. Cash is still a favourite for us at the moment, but we’re just nibbling away at some finally cheap co’s

00sum

 

01set 02mai

 

 

 

 

 

 

Continue reading Sector update 10/06 – 14/06

SET semi-annual index review

Yesterday the SET announced its semi-annual review, see below for the list of changes

SET50 index (SET50): 3 companies; – CENTRAL PLAZA HOTEL PCL. (CENTEL), CH. KARNCHANG PCL. (CK), SIAM GLOBAL HOUSE PCL. (GLOBAL) – will be added into its index constituents. There are also 11 additions in the SET100 index (SET100): DEMCO PCL (DEMCO), GOLDEN LAND PROPERTY DEVELOPMENT PCL (GOLD), KCE ELECTRONICS PCL (KCE), MBK PCL (MBK), MCOT PCL (MCOT), M.D.X. PCL (MDX), RS PCL (RS), SRIRACHA CONSTRUCTION PCL (SRICHA), UNIVENTURES PCL (UV), VGI GLOBAL MEDIA PCL (VGI), WHA CORPORATION PCL (WHA).

For the SET High Dividend Index (SETHD), it will be added by 7 companies; DELTA ELECTRONICS (THAILAND) PCL (DELTA), KCE ELECTRONICS PCL (KCE), KRUNG THAI BANK PCL (KTB), MBK PCL (MBK), QUALITY HOUSES PCL (QH), THE SIAM COMMERCIAL BANK PCL (SCB), THAI UNION FROZEN PRODUCTS PCL (TUF)

The changes will be implemented as of the market close of June 28, 2013

Source: SET

Stocks in the news (bbl, nmg, tisco) 18.06.13

BBL: Asset quality remains sound in China and Vietnam. Despite the slowing economic growth in China and Vietnam, BBL said that its asset quality in both countries remains good. NPL stood at a low 1% of its loan in China and 2% in Vietnam. This is because their loans are geared towards real sector in manufacturing and consumerrelated sectors and not the property sector. (Source: The Nation)

TISCO: Maintains loan growth target at 15-20%. TISCO is maintaining its loan growth target this year at 15-20% and expect NPLs from used cars to tick up in 2Q13. (Source: Krungtep Thurakit)

Comment: We’re under the impression that 1H13 will still look great for Tisco, however in 2H13 car sales are going to decrease YoY without the government stimulus. And I still hate its loan to SSI that rep’s 25% of its equity base.

NMG enjoys a strong shareholder response to Bt1.6-bn fund-raising plan : Nation Multimedia Group has received a warm reception to its Bt1.64-billion mobilisation plan for financing its bid for digital TV licences, with more than 20 per cent of shareholders exercising their right to subscribe to the newly issued shares.

Comment: Impressive run in the stock price that has fully factored in every potential positive scenario possible perhaps even a regional domination scenario, yes I’m being sarcastic..