Category Archives: TRADING

Thailand Among Top 20 in FDI Confidence Index

Thailand gets a place among the top 20 countries with highest confidence index. The Southeast Asian country entered A.T. Kearney’s Foreign Direct Investment (FDI) Confidence Index for 2017 at 19th place. Thailand moved up two places from 21st place last year.

The boost in Thailand’s FDI can be attributed in the increasing trust that foreign businesses are putting into the Asia-Pacific region.

In particular, Thailand is seen to have a better chance this year because of various factors including the higher year-on-year applications for foreign investment from January to August of 2016 and the strategic ventures of the local government to improve investment appeal.

All of these indicate a stronger FDI for 2017.

The head of A.T. Kearney’s Southeast Asian branch, Soon Ghee Chua explained how FDI works, specifically, how leaders of the companies choose which country to invest on. He said, “Executives across the globe are putting a strong focus on governance and regulatory factors when making investment decisions. This year’s index shows factors they look at include efficiency and transparency of government regulations, tax rates and ease of tax payments, and government incentives. Thailand has been ticking the boxes on all of these.”

More countries in the Asia-pacific moved up. In fact, half of the top ten countries in the FDI list are from the region. The top three are the US, Germany, and China. Thailand’s FDI have had a steady growth in the last few years. According to a conducted survey, 21% of the sample population see a positive economic outlook for Thailand until 2020.

Soon Ghee Chua adds, “Thailand’s 12th National Economic and Social Development Plan, which aims to strengthen the economy and enhance the country’s competitiveness, has emphasised its commitment toward foreign direct investment. The country’s Board of Investment has unveiled a detailed plan that provides a series of incentives — both tax and non-tax — to foreign investors in Thailand. These measures, coupled with improved prospects for Thailand’s economy, are making the country an attractive destination for global companies.”

Seamico Expands Investments, Diverts Attention From Brokerages

Seamico Securities Plc (ZMICO) is diverting attention from their stock brokerages to focus on investments in consumer healthcare, lifestyle goods, food, and drinks instead.

Competition in stock brokerages have been intense lately but Seamico wants to direct its investments on other funds. According to sources, the company wants to increase income and acquire attractive capital gains. Four to five deals are already in the table with the possibility of pushing through this year. For the first quarter, Seamico’s goal is to close at least one.

The Chief Executive of Seamico, Chaipatr Srivisarvacha relayed the news, explaining that each deal will cost an average of 50-200 million baht.

In a statement, Mr Chaipatr expressed how the success of Seamico in 2016 has enabled the diversification. He said, “After announcing impressive earnings in 2016 with almost 300% growth from the previous year, the company’s business plan for 2017 is focused on direct investments in companies with growth potential from high value-added products and services offered to young people.”

Seamico currently has stakes in various companies including Advance Finance Plc and Finch and Partners Asia Co Ltd. These two companies are in the field of marketing and branding. Advance Finance may be listed on the Thai Bourse anytime in the coming two years. Despite successful ventures in these investments, it has not been all growth for the financial securities provider. Seamico has recently exited from an investment in Beacon Offshore Co Ltd. late in 2016.

2017 had a good start for Seamico, however. It had closed a deal to get a 46% stake in Scentimental Thailand Ltd., a company which is famous for owning the exclusive license to develop, sell, and distribute perfumes that are named and sometimes created by Thai celebrities.

Scentimental Thailand is expected to expand into other branches of the health and beauty industry. One such expansion includes skincare cosmetics. The company may also grow to establish businesses in other countries.

Seamico will remain in the brokerage business despite these new investments. A proof of this is its recent joint venture with Thailand’s second largest bank in terms of asset, Krungthai Bank (KTB).

Bank of Thailand Warns of Possible Snapback from Bond Yields

Thailand’s central bank, the Bank of Thailand (BoT) has cautioned market participants about the risk of a snapback of bond yields. Such event is dangerous as it could cause an increase in borrowing costs for the private sectors which will effectively lower investor confidence.

In the Financial Stability Report 2016 of the BoT, they elaborated on the matter citing how they were paying close attention to the bond market. The report states, “Looking ahead, a risk that requires close monitoring is the effect of the sudden increase in bond yields or the yield snapback on the bond market, which could cause fluctuations in the financial market which could cause fluctuations in the financial market and capital flow and could, in turn, affect the cost of borrowing and confidence of investors at large.”

This ongoing erratic movements in capital flows and bond yield prices has been causing problems for companies that depend on short-term bonds. Borrowing costs and debt rollovers are threatening to become more expensive. While it hasn’t happened yet, the risks remain. Thailand’s financial economy will stay strong according to the report but companies whose leverage are high amounts of debt due to cheap borrowing costs might be in danger.

The report emphasizes Thailand’s strong economy stating, “In 2016, the country’s overall financial stability remained sound, reflected in the strong financial position of large companies and financial institutions’ loan-loss provisions and capital.”

Another factor for the rise in the price of bond yields is Trump’s impending entrance into office. Investors, out of fear of inflation from Trump’s US-focused policies, had moved their assets towards bond yields. It is the same case for the Thai asset.

The report continues saying, “However, the current financial environment could help ease the interest payment burden of the private sector. Even though the recent Federal Reserve decision to lift its policy rate rate might increase the cost of borrowing, the country’s overall financial costs remain low.”

Thai Officials See Potential Growth of Up to 5% Next Year

The economy of Thailand can grow as much as 5% in 2017 according to a senior finance official.

The potential growth is attributed to the possible surge of private investments that the government set as a goal for next year. The finance permanent secretary, Somchai Sujjapongse, told the public that the government is looking into issuing government bonds worth an estimated 100 billion baht to be used as financing for provincial development and as a stimulus for economic growth. This move is anticipated to become a driving force strong enough to push private investment to a range of 200 to 300 billion baht by 2017.

This information was confirmed by the Deputy Prime Minister Somkid Jatusripitak who stated that the government is indeed slated to issue 100 billion baht worth of government savings bonds in the coming month of January. The said bonds would have a maturity date that would range from five to seven years and will be offered to public institutional investors. The decision would supposedly raise funds for the development of 18 clusters of provinces in the country. Moreover, this event will hopefully help offset the predicted poor global trade prospects for next year.

Mr Somchai further emphasized that private investment will be boosted by the active investments from state agencies and the government. He commented. “We expect Thailand’s economy could manage growth of 4-5% next year if the combined investment budgets from the government, state enterprises, the new government bonds to fund provincial development and ensuing private investment happen as predicted.”

Apisak Tantivorawong, Finance Minister of Thailand, also weighed in on the matter saying that this government bond issuance will serve as a catalyst for the country’s next economic step: Thailand 4.0 which is the newest economic model promoted by the government that will focus on the development of creativity, innovation, and technology in the country. Previous economic models were Thailand 1.0 which focused on the improvement of agriculture, Thailand 2.0 which gave importance to the light industry and low wage labor, and Thailand 3.0 which aimed to nurture the heavy industry and advanced machinery system.

Overall, the plans of Thailand to boost economic growth can prove to be effective if carried out successfully. By offering government bonds which hopes to be sourced from the 2018 fiscal budget, Thailand will be able to develop provinces that will help significantly in the overall economic health of the country.

Thailand’s Intouch Holdings Get Boost From Singtel Stake

Singapore Telecommunications (Singtel) is taking advantage of the rapid growth among emerging markets by acquiring a stake in Thailand’s Intouch Holdings. The move is expected to boost Singtel’s holding in India’s Bharti Telecom (BTL).

Singtel Group’s chief executive officer, Chua Sock Koong conveyed the plans and goals of their company which includes taking advantage of both Thailand and India’s young population demographics to boost the telecom business. She said, “These two transactions…allow us to increase our economic interest in two companies, Advanced Info Service (AIS) and Bharti Airtel, and to operate in two countries where we think there will be a lot more economic growth.”

According in an official statement, Singtel intends to acquire a 21% stake in Intouch Holdings for approximately $1.18 billion. Meanwhile, it plans to acquire a corresponding 7.39% stake in BTL for an estimated $650 million.

This planned acquisition is the latest in a lineup of Singtel’s strategic methods to expand their company. Singtel already has a 39.7% stake in BTL and is buying shares from Temasek. Intouch has a 40.45% and 41.4% stake in Advanced Info Service and Thaicom respectively. Meanwhile, BTL is the holding company of Bharti Airtel. These connections are what Singtel wants to exploit.

In an official statement Singtel commented, “Intouch and BTL own assets that are leaders in their respective markets, with strong track records of earnings growth. These investments position both companies well to compete and capture the growth in mobile internet services.”

Singtel plans to raise the funds from the impending acquisition through a mix of cash, debt, and shares issued to Temasek.

Philip Chen Chong Tan, CEO of Intouch said in a follow-up statement that while Singtel already laid out plans, they haven’t received formal information with regards to the deal.

PTT focus on non-oil businesses to achieve accelerated growth

PTT focus on non-oil businesses to achieve accelerated growth

Thailand’s premiere oil and gas company announced it’s plans to focus on non-oil businesses to bolster the company’s growth.

According to an executive, PTT is expecting a better revenue report from its non-oil businesses. As much as 20% is expected to be added per year starting 2016 to 2020.

PTT is a Thai-state owned company which has operations in the Philippines, Thailand, Singapore, Mozambique, and Indonesia. While it’s main business is oil, the company is employing expansion efforts to participate in non-oil businesses. The company is currently aiming for a 50-50 partition for its oil and non-oil ventures. In other words, PTT wants to have an EBITDA (earnings before interest, tax, depreciation) that has 50% of its revenues from non-oil businesses by the year 2020.

The oil giant’s non-oil arm dabbles in coffee franchises and retail outlets. At the moment, PTT’s coffee shops run under the Cafe Amazon brand. The company also operates the Daddy Dough Brand and the Texas Chicken line of restaurants. For the first half of the year 2016, these non-oil ventures have posted a total of 153.5 billion baht EBITDA or $4.44 billion.

Coffee shops have the biggest part in the revenue report. Cafe Amazon has listed a 70 million cup sale for the first half. It aims to finish the year at 140 million cups which is 30 million cups more than 110 million cups it sold last year. PTT has also expressed its plan to expand in Cambodia and most of Southeast Asia.

Another venture of the company is budget hotels which they plan to implement as soon as possible. PTT has recently signed a deal with the airport department of the government for the joint development and management of retail space at passenger terminals.

The move to focus on this part of the company is fueled partly of the declining oil price that has hit oil companies the world over. The impact of the ongoing weaker oil price is being weathered by PTT through this efforts.

Chevron Ends Rumors, Will Not Leave Thailand

Chevron, one of the biggest oil companies in the world and the most significant energy producer in Thailand, has stated that it will stay in the country opposing rumors of its withdrawal.

Chevron supplies a little over one-third of the country’s natural gas demand. The Gulf of Thailand is home to its first natural gas field, the Erawan Field. This is where the company operates explorations and production blocks.

Earlier in the month, rumors have spread that the US energy giant will be leaving Thailand after it cut jobs in the region. An estimate of 800 staff and contractors lost their jobs after the company experienced severe oil price decline. The move gained the company $500 million which was used to stay afloat in the market.

In a statement made by Chevron Asia Pacific Exploration and Production President, Stephen Green said, “The core assets that we operate in the Gulf of Thailand are a core part of Chevron’s portfolio and we have intention of it remaining a core part of our portfolio. We are not leaving Thailand.”

For the year 2016, Chevron, along with its partners, have drafted a 100 billion baht ($2.9 billion) plan to improve operations in the Gulf of Thailand. They have also set a number of 300-400 wells to be drilled yearly.

The Government of Thailand which is headed by the military junta plans on auctioning oil and gas contracts which will expire in 2022 and 2023. The decision came after activists rioted against an extension proposal for the concession with existing operators. This includes Chevron whose main concession at the Erawan gas field will expire in 2022. Auctions are planned to start next year.

According to a spokeswoman of the company Chevron is willing to work with the government and has not yet given a definitive decision to join in the coming auctions.

Despite the impending auctions, Chevron said that it will stay in Thailand. License holders, including Chevron, are allowed to participate in the auction if no other bidders show. If they win the bid, the extension of concession may then be discussed.

Here’s Why Bitcoin Trading is Risky

More and more countries are accepting virtual currencies as legal money that can be used to purchase goods and services. This digital takeover can no longer be ignored by the global financial community. And so they have turned their spotlight toward the first and current leading virtual currency: the bitcoin.

First established in 2008 and shared in 2009, bitcoin has since then surged to become one of the most controversial and popular currency. Part of the controversy stems from the fact that the inventor of it is not known. He only goes by the name Satoshi Nakamoto. In any case, he put a cap on the payment system. This essentially means that once all the bitcoins have been mined, then the generation will be over. You earn bitcoins by “mining” them or in other words, solving sequences of complex mathematical problems. Seems easy right? It’s not.

Meanwhile, the popularity of digital currency can be attributed to its unique features. First and foremost, it is decentralized. No government owns it. Unlike the dollar which is regulated by the US Federal Reserve, or the yen that corresponds to the Bank of Japan, or the euro which is administrated by the European Banking Authority. Other features include user anonymity, absence of a third party, low transaction charges, and no tax added. With all it’s great offerings, still a lot of traders and investors have aversions toward the digital money. It is understandable because as much as people want to, these features act as a double edged sword. The more advantages you think you have, the riskier it gets.

No Regulation Means No Insurance
One feature that appealed a lot of people into using bitcoin is that it’s decentralized. No one government has rule over it. However, this could also pose as a risk. Unlike banks and other financial institutions, bitcoins and other virtual currencies offer no insurance.

Authenticity Problems
Although it’s hard for bitcoins to be falsified, the misinformed and naive can still be fooled. Despite all transactions being stored in a public ledger which everyone can access and the use of encryption systems, false bitcoins have actually been sold. If you are not vigilant or knowledgeable or capable enough to verify your digital currency, then you have to learn more.

It is Prone Volatility and Fluctuating Values
Given, bitcoins are still enjoying its popularity, we are not certain if it will retain this fame for long. If the countries that accept it become few, it’s value will go down until it is deemed worthless. Besides that, you still have to battle the natural volatility of the market. Bitcoin trading history show that it is prone to big swings which can be a gift or curse, depending on your ability as a trader.

There Are No Authorities
Bitcoins are at the same level of the dollar, the euro, and any other currency because it is considered as one. That means that it is a government competitor. However, as there is no regulating body that ensures the legitimacy of the use of bitcoins, experts speculate that it may be used for illegal activities.

There is A Safety Hazard
The very feature that attracts investors is also the one that may turn them away. Because bitcoins and other virtual currencies exist strictly in the digital world. Hackers, viruses, malware, and glitches, all of these things can hurt your currencies. By simply penetrating your encryption system, anyone can transfer your funds from your account to another. What’s worse is that all transactions are permanent and irreversible.

In all truth, trading bitcoins is risky but what currency isn’t? It’s up to you, to take advantage of the wonderful offerings of this digital currency or be safe and skeptical about it.

Do NOT Do These Things If You Want to Survive the Stock Market

Investing in equities is said to be one of the most effective ways to establish and grow a long-term fund. However, like any other transaction in the financial markets, it involves risks that could cost you your life savings. Knowing what to do is simply not enough. You must also know what not to do. In order to make sure that you indeed last long enough to be called a long-term investor, we’ve asked experts and veterans what they think are the things to avoid so you can survive the stock market.

Investing in Risky High-fliers
One common mistake that traders make is betting on risky high-fliers. This is a common fault of the rookie trader who wants likes to hope. They hope a hyped company will do well. They hope that a company that once boost in the market will do a repeat and win them substantial profits. They hope things will go their way with only hope as the fuel. This is wrong in so many levels. The danger in investing on high-fliers is that most of them are overvalued stocks. What traders need to invest in are companies that have proven their worth time and again. This will take a longer time but it will also take lesser risk and thus a greater chance at growing your long-term investments.

Going For Instinct Versus Research
According to research, more traders use their instincts in trading mostly by going with what the majority of the market is doing. While using your instinct is not against the law, it is not exactly a good habit. Going with the crowd is not a recommended move as well because it can make you more vulnerable to losses. The best thing that you can do as a trader is research. Really, it’s the best and only thing that can absolutely increase your chances of profit. Don’t go with your gut feeling or with the crowd, go with what the numbers tell you. While there is no exact science to stock trading, there are certain patterns and profit opportunities that are best seen under an analytic scope. So go ahead, use your instinct and consider the move of the many but always remember, it will always be your research and strategies in and out the market that will make you rich.

Wanting Instant Profits
Long-term investors are called as such because they can do what others are finding hard to withstand: waiting. Not to discredit the advantages of short-term investing but day trading is significantly riskier and more suited for veterans and experts. Engaging in day trading will, more often than not, derail your long-term returns. Furthermore, day-trading involves a much more fast-paced environment with severely more trades. In fact, you’ll need a supercomputer that can measure trading speeds at the rate of picoseconds or a trillionth of a second. In short, it is highly discouraged especially for individuals, new traders, and long-term investors.

The Sad Truth About Brokers

In essence, brokers are our representatives in the market. They buy and sell in behalf of us and negotiate deals for us. In exchange for their services, they get commissions and fees. Much are expected of them because our money is entrusted to them. As such, assumptions are made of them. Majority believe that these brokers are professionals that are experts on their field. We believe that they always know what’s happening in the market and that clients’ have their full attention at all times. Well, the majority are simply wrong.

They are ordinary people like you and me
One thing that clients like to believe is that brokers are super human beings that have special licenses, accomplished awards, and advanced degrees. In truth, those are not requirements. To become a certified broker, aspirants need only pass a few exams before they can legally advise and represent you in the market. Most of the times, these certified brokers have no prior experience and sometimes even their collegiate degree doesn’t even relate to the field. Of course, not all brokerage apply this kind of screening. There are some who put up high requirements. If broker background is an issue for you, you can go ahead and research about brokers that have high standards.

They don’t know what will happen next to the market
An assumption that majority of market participants have is that brokers know more about future market movements than the average trader. This is simply not true. Just because they execute trades for you doesn’t mean they know what will happen next. As advisers as well, brokers are expected to have a better idea of what will go on in the market. The truth is that they know as much as the next person. The market is an unpredictable place and the best that your broker can do for you is speculate based from facts and other factors. So put faith in them to advise you well but ultimately, understand that nothing in this world is 100% sure.

They are brokers not because they represent you but because they are selling to you
The main appeal of brokers is that they are in the market to represent you. However, the truth is that brokers are essentially salesmen too. This may pose as a concern because the main goal of salesmen is to make a sell. Brokers are there to sell you their services. Whether you win or lose, they will profit. This may give rise to a conflict of interest for the broker and the client. Not to say that brokers are against you, but always be aware that business is business. What we’re saying is, get to know your broker if you can so you’ll know what you’re getting into.

We entrust so much to these brokers that we forget that they too are humans prone to mistakes just like us. While we don’t belittle the power of a good broker and adviser, it’s always best to have full control of your trades. Incorporate their wisdom and expertise but don’t let your assets go to waste. Be in the know. Get the best broker through extensive research and informed decisions. And remember, having a representative on the market doesn’t relieve you of your responsibility to take care of your assets yourself. After all, no one will care about you more than you, yourself.