Protests = Delays = Economic slowing down = Rates cut!

Pre the protests no one thought this would’ve happened, but with the protests comes delays, and the fact that the infrastructure spending hasn’t started yet, the economy is stagnant from last year, well the BOT has come out with a rate cut now down to 2.25%.

The Bank of Thailand cut its one-day bond repurchase rate by a quarter of a percentage point to 2.25 percent, with monetary policy committee members voting six to one in favor of the decision, it said in Bangkok today. All 19 economists in a Bloomberg News survey predicted the rate would be held.

Source: Bloomberg

This changes things, we know that there are many many property funds, reits (if the revenue department ever sorts itself out), and infrastructure funds in the pipeline waiting to be released over the next few months, and we were worried that this may hamper the market for 2014.  But with rates being cut, expect the following being pitched by brokers hello leasing sector! They’re going to have a good time, hello financials! Also may benefit. Hello property! cheaper loans! Hello discretionary spending! Consumer interest rates should drop.

Needed another catalyst for a December rally? Well here it is :)

Stocks in the news (aot, bts, cpf, psl, robins, rs) 27.11.13

AOT

2013 a good year — AOT says FY2013 was a good year, with a 20% rise in the number of tourists and 16% growth in number of flights. The CFO said there will reversal in depreciation costs for the Don Muang Airport worth Bt3bn, which will help push net profits up. The company will release its FY2013 earnings on Nov 29. (Khao Hoon, 27/11/13)

Comment: Thailand’s tourism numbers are just outstanding, has all the bad press over politics in the past few years just given Thailand free advertising?

BTS

Two big funds coming in —Two big Australian and Canadian funds will invest in BTS before the company will be included in the MSCI after the roadshow in Hong Kong is over. Both funds are confident in the business and said that current political situation in Thailand will not affect BTS’s business. They plan to invest US$10bn in this region, including Thailand. (Khao Hoon, 27/11/13)

Comment: We now question BTS as a viable holding going forward, with the sale of its main skytrain route to the IFF, what else do they have on their books? Continue reading Stocks in the news (aot, bts, cpf, psl, robins, rs) 27.11.13

Random Thoughts: Next time I’ll go take over the MOF

Yesterday the total traded volume in the SET nearly hit THB 50 bn, a level of volume we haven’t seen for a few months, what happened here? MSCI Index rebalancing (BTS and TMB), foreigners sold off THB 9 bn worth of shares, but the market still rose as retail investors, local institutions and local prop desks picked up everything, we’ve always joked “We buy when the foreigners sell, and we sell when the foreigners buy”

The Thai Baht has now weakened past THB/USD 32 levels, we now wonder aloud when brokers begin touting export related companies

The 1,350 has been the unofficial level of lore for the SET, providing technical support for the past few months, we still see it holding.

We’re seeing good bargains in the market and decent dividend yields coming back, but does bad sentiment override good value? Something to think about when looking @ the auto sector.

Protests..ok still in the news, the Ministry of Finance was overtaken by 40 protestors! Yup only 40 according to the news, this kind of inspires me, the next time the MoF makes a silly decision I’ll round up my analysts and back office team to rule the MOF for the day.

We still don’t see Pheu Thai stepping down, they’ve enforced the Internal Security Act, a snap election or dissolution of parliament will most likely result in less seats, why would they want to give up power, and finally some people are mentioning it, but the Kings Birthday is on the 5th December, does Suthep really think he’s going to run protests during that day?

Year end rally? Has it disappeared? Will it come back? questions in our minds, we see two catalysts, protests going away & LTF’s.