Quarterly Calls

With quarterly announcements/calls etc etc effectively over there are 2 that I always enjoy reading/listening to.

Universal Robina (Philippines)

A decade ago I came across this massive Filipino consumer player, Universal Robina because I was curious who was behind my favourite snack brand as a kid in Singapore, Jack n Jill. Since then I’ve been following their quarterly calls/presentations, why? They effectively are the market leaders in consumer snacks throughout each country in the region.

During everyone on of their calls/presentations one can figure out what

1) Consumer trend/behaviour

2) Competitor moves

3) Distribution/network expansion (i.e. in Thailand 7-11) trends.

Link: https://www.urc.com.ph/uploads/downloadables/2021/07/URC%20Q2%20CY2021%20Investor%20Briefing%20Presentation%202021.07.30.pdf

Precious Shipping (Thailand)

I tweeted a ridiculously long copy and paste of what I thought the key highlights were. https://twitter.com/gvancomp/status/1430448681505882113?s=20

It’s been my fav quarterly MDA to read for the past 15 years due to the breadth of information available.  Why? It’s not just shipping/drybulk, they go through every key commodity, gov moves, infra developments and even Michelin Chef’s, here’s some snippets….

Shipping

• Ship recycling had a low figure of 4.44 MDWT being recycled during FH 2021, due to the significant impact from worsening Covid-19 experienced in the Indian subcontinent, as compared to 8.06 MDWT in FH 2020. …
• Recycling may improve during SH of 2021 due to the number of 20+ year old ships in the world fleet; increase in scrap steel price to $600 per steel ton-weight; regulatory pressure from BWTS; Special Survey costs; and IMO2020
• The industry is confident that prices will keep rising this year. Petter Haugen, an analyst at Kepler Cheuvreux, said it is possible that capesize vessels will fetch $100,000 a day in the second half of the year. (Financial Times – 11 May 21)

Commodities:

• In the FH of 2021, iron ore has grown by 3%; grains by 11%; minor bulks by 19%. Geopolitical trade disruptions (China/Aussie) have added to ton-mile  demand.
• World steel production was robust in June and grew by 12.3% YoY rising to 167.9 MMT
• From 432 proposed coal mining projects worldwide, a total of 2.2 BMT of new coal would be added per annum, or an increase of 30% from current production levels. 1.6 BMT per annum of proposed coal mine capacity is in the early stages of planning and vulnerable to cancellation. But 0.6 BMT per annum of new mine activity is already under construction, therefore, the rumors of the death of ‘King Coal’ have been greatly exaggerated!
• China plans to build up 100 MMT of coal reserves in 2021.
• Brazil’s April soybean exports have broken all monthly records at a massive 17.4 MMT!
• The global coal market has tightened fueling more price increases and contributing to the rally in freight. Chinese have upped their purchases from other suppliers such as Indonesia, Russia, and the Philippines. This has not been enough to offset a shortfall in domestic supply. China’s planners have allowed more imports from Indonesia. Total coal imports in June reached an estimated 29.5 MMT, a record monthly total, up 14% on June 2020. (Braemar ACM – 1 Jul 21)
• China generated 53% of the world’s total coal-fired power in 2020, 9% more than five years earlier, despite climate pledges and the building of hundreds of renewable energy plants, a global data study showed. New coal-fired power installations reached 38.4 GW in 2020, more than three times the amount built by the rest of the world. (Reuters – 31 Mar 21)
• The USDA expects China to import around 26 MMT of Corn from worldwide suppliers for the period that begins in September 2021. (TradeWinds – 21 May 21)
• In the last decade, Chinese industrial conglomerates have invested billions (US$) into new mining projects in Guinea. The West African country is now China’s primary supplier of the ore, with imports topping 52 MMT in 2020.
• Turkish president Tayyip Erdogan was on hand as construction of the Kanal Istanbul got underway, one of the largest infrastructure projects seen in Europe for many years. The 45 km canal linking the Black Sea and the Sea of Marmara will serve as an alternative to the increasingly congested Bosporus Strait. It is projected to cost $15bn. (Splash – 28 Jun 21)

Plant based foods

• Even three Michelin starred ‘Eleven Madison Park’, said it would no longer serve animal products. Every dish on their tasting menu, $335 per head, would be plant-based.

Link: https://www.preciousshipping.com/wp-content/uploads/FinancialStatements/MDAQ22021E.pdf

There are several others that I’ve found remarkably interesting to read consistently for each country, but which ones do you find interesting to read? Do share, I want to learn more.

Howard Marks – Thinking about Macro

Reading his memo’s is just fantastic mental masturbation, here are the snippets.

• “The debate rages on regarding whether today’s inflation will prove permanent or transitory. there’s a great deal riding on the answer since higher inflation would doubtless lead to higher interest rates and thus lower asset values. But in my view, it’s impossible to know the answer.
• While markets are usually good “observers,” hyper-attuned to current developments, they sometimes seem to view events either through a positive or a negative lens….they’re rarely good “predictors,” in the sense of knowing what comes next.
• …the Fed is showing that it’s more worried about economic sluggishness than about inflation.
• While the possibility of rising rates (and thus lower asset prices) troubles us all, I don’t think it can be said that today’s asset prices are irrational relative to rates.”

Link: https://www.oaktreecapital.com/insights/howard-marks-memos