Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Thematic (Sector/Industry)

<table class="table table-striped"><tbody>
<tr>
<td>Stock</td>
<td>Business</td>
<td style="text-align: center;">Shr pr (Bt/sh)</td>
<td style="text-align: center;">Mkt cap (US$ m)</td>
<td style="text-align: center;">PE (x)</td>
<td style="text-align: center;">Yld (%)</td>
<td style="text-align: center;">ROE (%)</td>
</tr>
<tr>
<td>TSTH (Tata Steel)</td>
<td>Steel</td>
<td style="text-align: center;">0.75</td>
<td style="text-align: center;">188</td>
<td style="text-align: center;">18</td>
<td style="text-align: center;">0</td>
<td style="text-align: center;">4.2</td>
</tr>
<tr>
<td>NMG (Nation Multimedia)</td>
<td>Newspaper</td>
<td style="text-align: center;">1.09</td>
<td style="text-align: center;">130</td>
<td style="text-align: center;">n/a</td>
<td style="text-align: center;">2.7</td>
<td style="text-align: center;">1.3</td>
</tr>
<tr>
<td>MATI (Matichon)</td>
<td>Newspaper</td>
<td style="text-align: center;">5.9</td>
<td style="text-align: center;">171</td>
<td style="text-align: center;">n/a</td>
<td style="text-align: center;">0</td>
<td style="text-align: center;">-10</td>
</tr>
<tr>
<td>POST (Bangkok Post)</td>
<td>Newspaper</td>
<td style="text-align: center;">4.5</td>
<td style="text-align: center;">130</td>
<td style="text-align: center;">n/a</td>
<td style="text-align: center;">0</td>
<td style="text-align: center;">-40</td>
</tr>
<tr>
<td>EPCO (Eastern Printing)</td>
<td>Magazines</td>
<td style="text-align: center;">6.85</td>
<td style="text-align: center;">200</td>
<td style="text-align: center;">18.2</td>
<td style="text-align: center;">1.7</td>
<td style="text-align: center;">18</td>
</tr>
<tr>
<td>AMARIN</td>
<td>Magazines</td>
<td style="text-align: center;">7.65</td>
<td style="text-align: center;">222</td>
<td style="text-align: center;">n/a</td>
<td style="text-align: center;">0</td>
<td style="text-align: center;">-40</td>
</tr>
<tr>
<td>Average </td>
<td style="text-align: center;">n/a</td>
<td style="text-align: center;">0.7</td>
<td style="text-align: center;">-8.2</td>
</tr>
</tbody></table>One day, I was watching the sunset in Chiangmai, and somehow, it inspired me to do a review on sunset industries. Of course, two that really come to mind are steel and print media…



Stock
Business
Shr pr (Bt/sh)
Mkt cap (US$ m)
PE (x)
Yld (%)
ROE (%)


TSTH (Tata Steel)
Steel
0.75
188
18
0
4.2


NMG (Nation Multimedia)
Newspaper
1.09
130
n/a
2.7
1.3


MATI (Matichon)
Newspaper
5.9
171
n/a
0
-10


POST (Bangkok Post)
Newspaper
4.5
130
n/a
0
-40


EPCO (Eastern Printing)
Magazines
6.85
200
18.2
1.7
18


AMARIN
Magazines
7.65
222
n/a
0
-40


Average 
n/a
0.7
-8.2

One day, I was watching the sunset in Chiangmai, and somehow, it inspired me to do a review on sunset industries. Of course, two that really come to mind are steel and print media…

Watching the Sunset in Print Media & Steel

For most parts, Thai anti-trust laws are quite lax, so there are good investing opportunities in certain monopoly stocks such as BTS and Thaicom, as well as those that could become more attractive in the upcoming sell-down of global equities. These include Major and Singapore-listed Thai Beverage. Of course, we don't believe all monopolies are good investments. Some exist in sectors that are fundamentally under pressure, such as oil &amp; gas (PTT and PTTEP) or whose growth outlook may be limited by delays in infrastructure expansion (BAFS and AOT). Nevertheless, it is refreshing to realize that there are so many stocks where investors don't have to worry too much about competition.

For most parts, Thai anti-trust laws are quite lax, so there are good investing opportunities in certain monopoly stocks such as BTS and Thaicom, as well as those that could become more attractive in the upcoming sell-down of global equities. These include Major and Singapore-listed Thai Beverage. Of course, we don't believe all monopolies are good investments. Some exist in sectors that are fundamentally under pressure, such as oil &amp; gas (PTT and PTTEP) or whose growth outlook may be limited by delays in infrastructure expansion (BAFS and AOT). Nevertheless, it is refreshing to realize that there are so many stocks where investors don't have to worry too much about competition.

The Robber Baron's Guide to Thai Investing in Monopolies

APAC Investment Strategy, Animal Spirits Report, Quiddity Advisors

Paul M. Kitney, PhD

APAC Investment Strategy, Animal Spirits Report

Quiddity Advisors

Pan-Asia Catalysts/Events

Asia Pacific Investment Strategy <ul><li>In the following series of introductory notes, Animal Spirits will outline the investment process and analytical framework we employ to provide context for the regular pieces to follow. </li><li>Animal Spirits is an equity-focused Asia Pacific Investment Strategy report. It harnesses macro, fundamental, and quantitative analysis and selectively incorporates and interprets elements of academic and central bank research where it is helpful to the investment process. Animal Spirits is structured in a long run framework but the investment horizon is tactical, usually in the 3-6 month range.</li><li>We begin with ANIMAL SPIRITS Part 1: Macro Backdrop - Base Jumping the Fed with Oil and Inflation Expectations<ul><li>The dominant paradigm in 2016 has been deflation, fueled by a series of shocks. The energy market has transmitted shocks through to the real economy via the credit market, which is part of the Fed's policy reaction function. Central to Fed decision making is inflation expectations, which are influenced by YOY changes in oil prices.</li><li>The deflation paradigm has been characterized by a generically weak commodities sector, chronic underperformance of emerging market (EM) equities and an impressive outperformance of the US equity market. </li><li>A paradigm shift - or at least a pause in the current deflation regime - is likely underway. This should consist of two consecutive phases:</li></ul></li></ul> 1. EM Goldilocks - APAC EM equities and associated currencies are likely to outperform into 2016 year end, driven by market clearing in the commodities space. The Fed will run "hot" for a while. 2. Fed responds to a possible “inflation surprise” in Q1 2017 with at least one rate hike, reacting to an oil price "base effect" and possibly a stabilization in the liquid energy demand-supply balance, which would exaggerate this effect.A pdf version of this note is attached, including important disclaimersNext in this series is: ANIMAL SPIRITS Part 2: Earnings and Valuation Snapshot

Asia Pacific Investment Strategy In the following series of introductory notes, Animal Spirits will outline the investment process and analytical framework we employ to provide context for the regular pieces to follow. Animal Spirits is an equity-focused Asia Pacific Investment Strategy report. It harnesses macro, fundamental, and quantitative analysis and selectively incorporates and interprets elements of academic and central bank research where it is helpful to the investment process. Animal Spirits is structured in a long run framework but the investment horizon is tactical, usually in the 3-6 month range.We begin with ANIMAL SPIRITS Part 1: Macro Backdrop - Base Jumping the Fed with Oil and Inflation ExpectationsThe dominant paradigm in 2016 has been deflation, fueled by a series of shocks. The energy market has transmitted shocks through to the real economy via the credit market, which is part of the Fed's policy reaction function. Central to Fed decision making is inflation expectations, which are influenced by YOY changes in oil prices.The deflation paradigm has been characterized by a generically weak commodities sector, chronic underperformance of emerging market (EM) equities and an impressive outperformance of the US equity market. A paradigm shift - or at least a pause in the current deflation regime - is likely underway. This should consist of two consecutive phases: 1. EM Goldilocks - APAC EM equities and associated currencies are likely to outperform into 2016 year end, driven by market clearing in the commodities space. The Fed will run "hot" for a while. 2. Fed responds to a possible “inflation surprise” in Q1 2017 with at least one rate hike, reacting to an oil price "base effect" and possibly a stabilization in the liquid energy demand-supply balance, which would exaggerate this effect.A pdf version of this note is attached, including important disclaimersNext in this series is: ANIMAL SPIRITS Part 2: Earnings and Valuation Snapshot 

ANIMAL SPIRITS REPORT 1: Macro Backdrop - Base Jumping the Fed with Oil and Inflation Expectations

With the exception of AIS and MINT, we found that the majority of Thai stocks with large upcountry exposure (predominantly retailers) are priced at very high valuations of usually 30x PE or higher, but in reality, the growth momentum in upcountry Thailand could lag behind that of Bangkok. In light of this, we urge investors to be wary of them. Bangkok accounts for around 10% of the Thai population despite its tiny area in land mass but close to a quarter of the Thai economy. Historically, it…

With the exception of AIS and MINT, we found that the majority of Thai stocks with large upcountry exposure (predominantly retailers) are priced at very high valuations of usually 30x PE or higher, but in reality, the growth momentum in upcountry Thailand could lag behind that of Bangkok. In light of this, we urge investors to be wary of them. Bangkok accounts for around 10% of the Thai population despite its tiny area in land mass but close to a quarter of the Thai economy. Historically, it…

AEC integration has taken effect roughly a year now. We highlight several stocks in property and tourism segments that could benefit from increasing expatriate business travels or stays as a result of the new business. Of the contractors, CK seems most adept with Laos-based work, which could be a stepping stone into building connecting roads in IndoChina scheduled for 2020.BEC World's drama series are already popular in Laos and Cambodia. However, companies that use highly skilled workers such as engineers and nurses (AIS and BH) could lose out in this war for talent against better paying countries such as Singapore if labor mobility improves further.

AEC integration has taken effect roughly a year now. We highlight several stocks in property and tourism segments that could benefit from increasing expatriate business travels or stays as a result of the new business. Of the contractors, CK seems most adept with Laos-based work, which could be a stepping stone into building connecting roads in IndoChina scheduled for 2020.BEC World's drama series are already popular in Laos and Cambodia. However, companies that use highly skilled workers such as engineers and nurses (AIS and BH) could lose out in this war for talent against better paying countries such as Singapore if labor mobility improves further.

Thailand

iShares MSCI Thailand Capped ETF is an exchange-traded fund incorporated in the USA. The ETF seeks investment results that correspond to the performance of the MSCI Thailand IMI 25/50 Index.

iShares MSCI Thailand (THD US)

Watching the Sunset in Print Media & Steel

One day, I was watching the sunset in Chiangmai, and somehow, it inspired me to do a review on sunset industries. Of course, two that really come...

Athaporn Arayasantiparb, CFA

The Robber Baron's Guide to Thai Investing in Monopolies

For most parts, Thai anti-trust laws are quite lax, so there are good investing opportunities in certain monopoly stocks such as BTS and Thaicom,...

Athaporn Arayasantiparb, CFA

ANIMAL SPIRITS REPORT 1: Macro Backdrop - Base Jumping the Fed with Oil and Inflation Expectations

Asia Pacific Investment Strategy In the following series of introductory notes, Animal Spirits will outline the investment process and...

Paul M. Kitney, PhD

The Upcountry Disconnect

With the exception of AIS and MINT, we found that the majority of Thai stocks with large upcountry exposure (predominantly retailers) are priced at...

Athaporn Arayasantiparb, CFA

AEC Integration...Here We Come

AEC integration has taken effect roughly a year now. We highlight several stocks in property and tourism segments that could benefit from...

Athaporn Arayasantiparb, CFA