Random Thoughts: Exports, China, Sahapat, LTF, Holidays etc…
Exports are rocking
So despite all the news that the THB is strengthening too quickly exports are continuing to climb for Thailand and the trade surplus continues to enlargen further. Though some clever analysts are pointing out that half of the increase is price inflation.
She said exports to the traditional key markets of the US, Japan and EU rose by 5.7%, 10.3% and 2.1% year-on-year in September, while exports to the CLMV group climbed 13.9%, marking a fifth straight month of double-digit growth.
Exports to China leapt 12.1% and Asean shipments rose by 1% in September, while exports to South Asia shot up 34.6%.
Imports in September grew by 9.7% to $18.5 billion, giving Thailand a trade surplus of $3.4 billion.
Source: Bangkok Post
Car exports are doing better than expected
So now you know for the next time a government decides to employ populist policies for the car industry, buy the manufacturing names such as SAT, AH, STANLY etc 3 years afterwards…
“With all these positive factors, we project sales volume of 245,000 units in the fourth quarter, bringing full-year car sales to 850,000-860,000 units, higher than the club’s forecast of 830,000 units,” he said. “2017 is a good year for car distributors because the market is now climbing after a four-year bearish period following expiry of the Yingluck Shinawatra government’s first-time car buyer scheme.”
The FTI’s automotive industry club reported yesterday that car exports in September rose by 7.2% year-on-year to 120,654 units — a 24-month high — as Middle East shipments grew for the first time after shrinking over the past few years.
Source: Bangkok Post
One card to rule them all!
In a decade from now when we mention to our grandchildren that there was a time when we had to use different cards to use the BTS, MRT, Rail Link, Buses, they’ll just say “That is stupid.” So its better late that never that Thailand is almost going to implement one card to rule them all.
The first Spider cards for the common ticket system will be available by next June, but will initially only be used to link the Airport Rail Link and public bus services, Transport Minister Arkhom Termpittayapaisith says.
He said other modes of transport such as the skytrain and subway will gradually join the Spider card system by next October.
Mr Arkhom announced the deadline after a Memorandum of Understanding (MoU) to speed up installation of the common ticket system was signed by transport authorities Wednesday.
The concerned parties were the Mass Rapid Transit Authority of Thailand (MRTA), the Bangkok Mass Transit System Plc (BTSC) and the Bangkok Expressway and Metro Plc (BEM).
Source: Bangkok Post
Nothing is more important than China
This past week it was China’s 19th meeting to start their 5 year plan, and to me, nothing is more important to the stability of the global economy, markets, and the future of SE Asia other than what is happening in China.
Xi painted China’s governance system as a unique development model while hailing signature policies like his Belt-and-Road infrastructure initiative and anti-corruption campaign, which has ensnared some 1 million officials since 2012 and sidelined many of his would-be rivals.
Xi affirmed the Communist Party’s supremacy and said that China shouldn’t copy the political systems of foreign nations, repeatedly emphasizing that the country had entered a “new era of socialism with Chinese characteristics.” He called for the rejection of the “Cold War mentality” in addressing global challenges, and said China would never seek global hegemony.
Source: Bloomberg
Eddie Chow: Xi Jingping will continue to hold power, and he will continue to put forth reforms and give high attention to China’s quality of growth. However, a change in the decision-making structure within the PSC may grant him greater power to push reforms more rapidly and in a more radical way. We see this, if it happens, as generally positive because the economy will then be able address the long-standing fundamental problem of low efficiency in resource allocation.
Another potentially positive outcome would be that Xi can bring a higher level of institutionalization to the country. I believe this is essential for China to grow itself out from just a middle-income country.
That said, I do not expect any major changes in direction from prior meetings. There is a general pattern on how power transitions from one generation to the next within the party. Xi, after his first term of five years as Party leader and president of China, will hold stronger political power and it will likely be easier for him to mobilize his political capital to push forward reforms.
Source: Franklin Templeton
Sahapat Group is actually doing something!
There have been movements by the group in the past year with adjustments and with this latest development, could this group finally be worth a look for investments? I’ve oftened argued that one just has to buy all of the sahapat group companies, take them public, clean up the operations and management, relist the group and I’m fairly certain one could 3-5x their investment on it.
A Stock Exchange of Thailand (SET) statement yesterday approved the de-listing of securities for Thai President Foods Plc (PF), the Mama instant noodle maker, and President Rice Products (PR) after the two companies fulfilled the requirements for amalgamation, including the registration and allowed shares of the amalgamated firm to be traded on the SET from tomorrow using the ticker of TFMAMA.
Under the new shareholding structure, TFMAMA will be 25% held by SET-listed Saha Pathana Inter-Holding (SPI), the investment holding firm of Saha Group, the country’s leading consumer product conglomerate, 16% by Nissin Holdings, and the remainder by four families: Chokwatana, Tatiyakawee, Poonsakudomsin and Paniangvait.
Mr Poj said the new firm plans to grow its revenue to 30 billion baht over the next five years, with 10 billion coming from overseas business, 10 billion from the domestic market and 10 billion from President Bakery business.
The merger will create sustainable growth for the group, and President Rice is destined to become a base to expand the business in the future, he said.
Source: Bangkok Post
LTF’s
It’s coming to that time of the year where brokers will being pushing the idea that buying into LTF’s will buoy the market, I used to believe that this did have a significant impact on the markets between 2006-2013, now it’s far less in mind as I think the subs/redemptions effectively cancel one another out. But in the case that I’m wrong here’s an idea of what some LTF’s are holding.
Holiday time
Bangkok is one of the best places to be in the world when there is no traffic, such as the past day. And given that there are 2 public holidays next week I don’t envisage much movement in the domestic market and thus there will be no new posts.
As a last thought…the question I had constantly been asked over the past decade is what happens when the K passes…as you can see, nothing has changed. So what reason is there for hesitating to buy the Thai Equity market? The government has gone ahead with the infrastructure projects with 50% already bidded out (granted there have been delays in the past) and the rest to happen within the next 12 months, exports are doing fine, the currency is stable/strong, the economy is doing ok, tourism is bustling, and there are elections next year. So its a continuation of the same trend i.e. a lot of domestic liquidity going through the system, just imagine the multiplier impact of debt on top of the amount of the value of the projects. The only risk I can imagine is the usual, politics preventing Thailand from reaching an economic boom phase, oh and something called valuations for certain names…
praya
Hi Pon,
I was doing some infos research on Mr. Mitsuji Konoshita, in order to figure out the real value of this company when I discovered this site https://www.anonymousequity.com/
this site give a THB2.77 (!!) plus a lot of infos,
I would like to hear your idea on this story,
thank you.
Pon
Yup that article was out a week or so ago.
Part of it confuses me ie the using the loans to buy shares even though they were already shareholders. But I get the gist. A lot of explaining required by GL
Pon
Next part was the financing. You can arrive at that 2.77 by removing all financing provided by j trust but if one assumes that a bank like kbank which guarantees part of their debentures provides financing then naturally get a higher price. In the end the article does a good job at showing the worst case scenario.
Xavi
The report is a detailed analysis of all the public info that has been published in the newspapers particularly Kaohoon. It does provide solid evidence linking the Cyprus and Singapore Borrowers back to Konoshita so looks like he may be ciculating money around to inflate profits?
From the looks he may be pledging his own shares in order to take out loans as a way of funnelling money out of the company, he’s just doing it in a convoluted way to avoid arousing suspicion.
Also, I suspect the inflated price tag paid for CCF may have a component that may have been kicked back to him in cash (speculation on my part) given he purchased a large stake from a related party shareholder (director of GL from memory).
I have some family and friends that have invested in GL at varying entry prices so I have taken a keen interest in this company to try and recover their capital if a class action suit is required against the auditor or GL executives.