Random Thoughts: Telcos & prop out, food coming back?

3Q13 results for publicly listed Thai companies were all due by 14th November and analysts around Thailand and whoever covers Thai companies have been busy. What we’ve seen thus far on a general basis are the following:

  1. Minimum wage increase is still having an impact on manufacturing based co’s or any co’s that have low operating leverage
  2. Property sector across the board was disappointing for 3Q13 except for the stalwart LH and now PS
  3. Teclo’s were disappointing across the board as well and perhaps now investors chasing yield will begin to divest away from dtac and advanc
  4. Food, CPF and TUF are the two main names here and both have had an awful 12-18 months, perhaps now the tide is turning here?

In addition to Food, we think co’s linked directly to the global econ i.e. energy and shipping, may finally be in vogue again over the next 6-12 months

Politics is still the focus of the frontpages locally, Democrats are lucky to be riding this Anti-amnesty trend and we think are beginning to push their luck, do they really think they can win in a snap election? We highly doubt it. Then again with recent news showing that government is delaying payments to rice farmers, this can’t help Pheu Thai’s popularity.

We’ve joked internally that birth control has limited economic growth in Thailand, yes yes its rather crude, however the basic correlation of population growth and economic growth does exist, and with China just officially revoking its one-child policy, the argument of an aging workforce may be thrown out the window.

Jim O’Neill has come up with a new term, MINTs to replace his BRICs as the major economies to follow over the next decade

As a final point, The Economist this weekend wasn’t circulating in hardcopy form this weekend in Thailand in fear of Lese Majeste, well open up your ipad’s and read it, there isn’t much there to be honest except for a comment on the relationship between Mr. T and royalty.

A portfolio for 2014

Nope not my thoughts, instead these come from Byron Wein of Blackstone and there are several points within his commentary in regards to margin pressures in the US, Europe’s valuation and Japan’s Abe-economics, see below for a snippet and the link for the full article.

I established three new categories, long-only United States and long-only Europe at 10% each and long Japan at 5%. To provide funds for these new positions I trimmed 5% from emerging markets, 5% from hedge funds, 5% from real estate and 5% from non-conventional high yield, and I eliminated the 5% cash position. 

Source: Blackstone