Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Thematic (Sector/Industry)

In this review, we highlight the importance for investors to: 1) not 'jump the gun' and sell on companies that are in decline; and 2) think logically about the macro picture, since those may have an impact on whether companies can recover or would lose relevance in the marketplace altogether.From our observations, the companies in Thailand that do turn around tend to follow one or more of these four measures, namely: 1) operations: a complete transformation rather than minor patch-ups (eg. KARMART, IVL); 2) competitive strategy: changing the frame of reference (PIZZA...now part of MINT); 3) debt restructuring (BLAND, TPI); and 4) marketing: re-branding (eg. DTAC, BTS). Whether you are stuck with certain investments or thinking about investing in potential turnaround plays, observing these four traits or steps could be helpful.

In this review, we highlight the importance for investors to: 1) not 'jump the gun' and sell on companies that are in decline; and 2) think logically about the macro picture, since those may have an impact on whether companies can recover or would lose relevance in the marketplace altogether.From our observations, the companies in Thailand that do turn around tend to follow one or more of these four measures, namely: 1) operations: a complete transformation rather than minor patch-ups (eg. KARMART, IVL); 2) competitive strategy: changing the frame of reference (PIZZA...now part of MINT); 3) debt restructuring (BLAND, TPI); and 4) marketing: re-branding (eg. DTAC, BTS). Whether you are stuck with certain investments or thinking about investing in potential turnaround plays, observing these four traits or steps could be helpful.

Turnarounds: Finding A Phoenix In the Land of the Dead

EM PM, Ecstrat

Emad Mostaque

EM PM

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
​
More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

<div>Oil prices have had a jittery week after the shock of the US elections leading to a dollar resurgence and abject confusion over the impact on the potential impending OPEC deal. </div><div>Short positions have steadily been building under the assumption a deal likely won't be done, or if it is done then it won't be enforceable and not take enough barrels off the market. </div><div>This had sparked a predictable series of leaks and a flurry of diplomatic activity from oil ministers and the OPEC Secretary General to try…</div>

Oil prices have had a jittery week after the shock of the US elections leading to a dollar resurgence and abject confusion over the impact on the potential impending OPEC deal. Short positions have steadily been building under the assumption a deal likely won't be done, or if it is done then it won't be enforceable and not take enough barrels off the market. This had sparked a predictable series of leaks and a flurry of diplomatic activity from oil ministers and the OPEC Secretary General to try…

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

<ul><li>Singapore’s Energy Sector was the strongest of Singapore’s stock Sectors in October, with a 10.4% market capitalisation weighted total return on oil and coal price swings. This followed on from Energy also being the strongest of the Sectors back in September.</li><li>The 10 largest capitalised stocks of Singapore’s Energy Sector averaged a 12.5% total return in October, consisting of seven advancing stocks and three declining stocks. CAO, the largest capitalised stock of Singapore’s Energy Sector is scheduled to report 3Q16 results Wednesday.</li><li>Two of the 10 largest capitalised Energy stocks, Geo Energy Resources and KrisEnergy also ranked amongst the 10 actively traded stocks that saw the biggest increase in their October traded volume, compared to respective three month average volumes. Geo Energy Resources was the fifth biggest volume leader while KrisEnergy was the sixth biggest volume leader.</li></ul>

Singapore’s Energy Sector was the strongest of Singapore’s stock Sectors in October, with a 10.4% market capitalisation weighted total return on oil and coal price swings. This followed on from Energy also being the strongest of the Sectors back in September.The 10 largest capitalised stocks of Singapore’s Energy Sector averaged a 12.5% total return in October, consisting of seven advancing stocks and three declining stocks. CAO, the largest capitalised stock of Singapore’s Energy Sector is scheduled to report 3Q16 results Wednesday.Two of the 10 largest capitalised Energy stocks, Geo Energy Resources and KrisEnergy also ranked amongst the 10 actively traded stocks that saw the biggest increase in their October traded volume, compared to respective three month average volumes. Geo Energy Resources was the fifth biggest volume leader while KrisEnergy was the sixth biggest volume leader.

Energy the Strongest Sector in October on Oil & Coal Price Swings

SGX lists four Upstream Coal Plays: Geo Energy Resources, Resources Prima Group, BlackGold Natural Resources and Golden Energy &amp; Resources.Geo Energy Resources has been the strongest performer among the four upstream plays in the 2016 year to date with a 37.9% gain. On 12 August,  Geo Energy Group reported that for the six months ending 30 June 2016, company revenue was US$33 million compared to US$10 million for the same period a year ago.

SGX lists four Upstream Coal Plays: Geo Energy Resources, Resources Prima Group, BlackGold Natural Resources and Golden Energy &amp; Resources.Geo Energy Resources has been the strongest performer among the four upstream plays in the 2016 year to date with a 37.9% gain. On 12 August,  Geo Energy Group reported that for the six months ending 30 June 2016, company revenue was US$33 million compared to US$10 million for the same period a year ago.

Geo Energy Resources Led Upstream Coal Plays in 2016 YTD

In this review, we predict that Thai equities will rally in October and early November before another major correction in December with the Fed rate hike. In the short term, we expect Thai banks to do well, as they and Asian counterparts (eg. Singapore's DBS) benefit in terms of relative growth if the US banks are hampered by the regulator's decision to increase capital requirements of the largest banks. We also see two companies run by Thailand's second richest tycoon Charoen Sirivadhanabhakdi, namely BJC and Thai Beverage, outperforming companies run by the larger CP Group, primarily due to corporate action and a market's tilt towards consumers and retailing sectors. Needless to say, we will be tactically overweight on banks, retailers, and consumers over the next two months.We also discuss: 1) the overall upgrade of Thailand's growth expectations on the back of stronger domestic consumption; and 2) highight the government's five strategic sectors, named 'The 5 S-Curves'.

In this review, we predict that Thai equities will rally in October and early November before another major correction in December with the Fed rate hike. In the short term, we expect Thai banks to do well, as they and Asian counterparts (eg. Singapore's DBS) benefit in terms of relative growth if the US banks are hampered by the regulator's decision to increase capital requirements of the largest banks. We also see two companies run by Thailand's second richest tycoon Charoen Sirivadhanabhakdi, namely BJC and Thai Beverage, outperforming companies run by the larger CP Group, primarily due to corporate action and a market's tilt towards consumers and retailing sectors. Needless to say, we will be tactically overweight on banks, retailers, and consumers over the next two months.We also discuss: 1) the overall upgrade of Thailand's growth expectations on the back of stronger domestic consumption; and 2) highight the government's five strategic sectors, named 'The 5 S-Curves'.

American Capital Requirement Increase: Charoen and Thai Banks to Lead October Rally

Thailand

Star Petroleum Refining PCL offers  petroleum products both for domestic consumption and for export and operates a crude oil refinery. Star Petroleum Refining operates in Thailand.

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Star Petroleum Refining (SPRC TB)

Turnarounds: Finding A Phoenix In the Land of the Dead

In this review, we highlight the importance for investors to: 1) not 'jump the gun' and sell on companies that are in decline; and 2) think...

Athaporn Arayasantiparb, CFA

Playing the OPEC Deal

Oil prices have had a jittery week after the shock of the US elections leading to a dollar resurgence and abject confusion over the impact on the...

Emad Mostaque

Energy the Strongest Sector in October on Oil & Coal Price Swings

Singapore’s Energy Sector was the strongest of Singapore’s stock Sectors in October, with a 10.4% market capitalisation weighted total return on...

Singapore Exchange Ltd (SGX)

Geo Energy Resources Led Upstream Coal Plays in 2016 YTD

SGX lists four Upstream Coal Plays: Geo Energy Resources, Resources Prima Group, BlackGold Natural Resources and Golden Energy & Resources.Geo...

Singapore Exchange Ltd (SGX)

American Capital Requirement Increase: Charoen and Thai Banks to Lead October Rally

In this review, we predict that Thai equities will rally in October and early November before another major correction in December with the Fed...

Athaporn Arayasantiparb, CFA

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