I’ve been traveling throughout the region the below is just compilation of observations and thoughts I’ve had from sitting in a coffee shop, talking to people, and randomly staring at the sky. Naturally do not expect anything but poorly discombobulated rambling.

China -> SE Asia.

With China wanting to be less of an export manufacturing base for the world and trade tariffs effectively forcing them to accelerate the drive to their own consumer based economy driven by their own home made products, should SE Asia not benefit from this?

Companies are reportedly looking to shift geographically south from China with Vietnam being the obvious beneficiary thus far. Economically it appears that Cambodia/Laos/Vietnam have all seen the greatest benefits, but then what about Malaysia, Thailand the Philippines and Indonesia? Malaysia has reopened to Chinese investment, Thailand has started talking about it again, the Philippines is kow-towing back to China for the POGO’s, but Indonesia appears a bit too far away to receive any benefits from this.

I can see the potential for the logistics players in the region beginning to benefit further from these changes.

Now the question may be how far can it go? How much more capital flow to the SE Asia? And isn’t this all a positive as the past 2 decades as mainly driven by only one country whereas now investments may be more spread out throughout the region?

Or perhaps my LT joke of thesis that Europe becomes a rejuvenated manufacturing powerhouse? Led by a robotics innovative economy?

Malaysia interestingly is the only country to benefit from an increase in oil prices given their reserves, the rest of the region is effectively a net importer, yes that includes Vietnam because they don’t have the domestic refinery capabilities. So if oil prices continue rising because of a potential risk premium post this Saudi field attack, could Malaysia finally become a bull market?

Export numbers

They have been looking rubbish for the past few months, how much of this was driven by the fact that a lot of inventory stocking was taking place towards the end of 2Q18 and beginning of 3Q18 pre the enactment of the US tariffs? If you look at the monthly figures things aren’t as bad as the yearly comps indicate.

Shipping

IMO2020, That’s basically it. A huge new change in regulations that may have a massive disruption on the supply of ships – do your on homework on this and then you’ll understand why PRM and (in reality it should only be) PSL may go through the roof. Or is the recent spike in the BDI, Supramax, Handysize just short term as a result of ships being sent to yards for upgrades?

Indonesia

They’ve been cutting interest rates rather rapidly there, who benefits? They need lower interest rates given all the infrastructure plans that their latest government has begun rolling out. Banks for a period of time until the industry ends up looking like South Korea, Japan and Thailand.

The PMs Oath

Its been amusing watch this play out in the news and social media, I think there’s only two obvious answers to this 1) He chose not to or 2) He’s an idiot.

The policeman

Well he’s been in jail in Australia for drug smuggling and lied about it, received a doctorate from a scam university, so isn’t it rather fitting that he’s in Thai politics?

Military spending

They’ve bought more tanks, great. The last war Thailand had was against Laos in the 80s and the Thai military lost. But they are rather effective at using the tanks against Thai citizens.

WeWork

We all know the news that the valuation of WeWork has collapsed from +40 billion to 10 billion in the space of month. What happens if all this crazy money dries up? Imagine in the region that Grab and Gojek can’t raise more capital, there’s a lot of drivers (both cars and motorcycles) that may see their monthly income’s decline => a lot of restaurants have benefited tremendously from the delivery service, public co’s such as ZEN have admitted that 15-20% of their business comes from deliveries, imagine that the funding goes and what will the negative impacts be?

Thai shopping malls

I’m not an expert in foot traffic at shopping centers given that I rarely go, but a walk around a few in Sukhumvit shocked me by how empty they were compared to just 6 months ago.

Liquidity in Thailand

BOT enacting tighter regulations on banks => banks lending less to the population => less liquidity in the system => less purchasing by consumers => slowdown in the economy.

Only a few major companies are benefiting from this low interest rate and the fact is the rest of us have to deal with the fact its rather to get access to debt and only the corporates’ are effectively getting the best interest rates. I just bought some raw land, my mortgage rate is ~8%. Where is this low interest rate environment?

GDP Growth #’s

There was an interesting chart sent to me the other day, I think it was from Capitalist Exploits, basically showing that GDP/capita in Japan has been growing well despite the fact that GDP growth rates are flat, GDP per capita has been growing.

It made me think about Singapore (where I have a personal affinity having spent the majority of my youth there), single digit growth rates as well, but the quality of life there is of an incredibly high standard.

Here’s the source: Capitalist Exploits