phatra wealth daily 20141211 rc
TRANSCRIPT
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8/10/2019 Phatra Wealth Daily 20141211 Rc
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Private Wealth Management Research11 December 2014
Issued by Phatra Securities Public Company Limited ("Phatra"). Phatra does and seeks to do business with companies covered or mentioned in its
research reports. As a result, investors should be aware that Phatra may have a conflict of interest that could affect the objectivity of this report.
Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 12.
A member of the Kiatnakin Phatra Financial Group
Phatra Wealth Daily NoteGlobal Markets: Stock market selloff on lower oil
demand forecast; Brent fell below $65; China
selloff on Tuesday
n
US stocks lost more than 1% on Wednesday as another big
drop in oil prices hammered energy shares after OPEC cut its
forecast on 2015 demand for crude.
n
Brent crude fell below $65 for the first time since 2009.
n
Chinas stocks, currency and corporate bonds suffered their
largest tumbles in years Tuesday after Beijing took fresh
steps to rein in growing risks in the countrys debt-laden
financial system.
Local Markets: Minimum wage to stay put,
Minister defends less-steep retail oil price cuts,
Airports predict surge in traffic
n
The tripartite Wage Committee has resolved to maintain the
daily minimum wage nationwide at Bt300.
n
The Energy Minister has defended the decision not to cut
retail oil prices in Thailand at the same pace as global crude
prices.
n
AoT sees a strong rebound in passenger traffic through its
airports in the year to September 2015, due mainly to the
improved tourism outlook.
n
Local Market Wrap:SET 1,559.56 -15.99pts -1.01% Value
US$1,679mn. The market was weak from the outset, in part
on follow-through selling from Monday afternoon but more
importantly Energy-3.97% continued to be sold off with
bargain hunters getting overtaken early on.
Investment Ideas
n
Airlines Lower fuel prices cause us to lift sectors 2015
core earnings forecast by 34% and our price objectives by
39% on average. We upgrade NOK (Buy/12-month PO Bt20)
and AAV (Buy/12-month PO Bt5.60) to Buy from
Underperform but reiterate Underperform on THAI
(Underperform/12-month PO Bt11) given 70% hedging and
headwinds from JPY & EUR weakness. NOK is our top pick
given negligible hedging, tailwinds from weakening JPY/THB
and undemanding valuations.
Phatra Macro Research Team &
Phatra PWM Research Analysts
Pipat Luengnaruemitchai
Porntip Tantasuwan
Flemming Clausen
Taweesak Paopanlop
KeyGlobal Index Last %Chg %YTD
US Dow Jones 17,533.2 -1.5% 5.8%
US S&P 500 2,026.1 -1.6% 9.6%US Nasdaq 4,684.0 -1.7% 12.1%
UK FTSE 100 6,500.0 -0.5% -3.7%
EU STOXX600 115.6 -0.4% 3.1%
JP Nikkei 17,412.6 -2.2% 6.9%
HK Hang Seng 23,524.5 0.2% 0.9%
MSCI ACWI 414.8 -1.3% 1.5%
MSCI WORLD 1,698.4 -1.4% 2.2%
MSCI Europe 115.6 -0.4% 3.1%
MSCI EM 958.7 -0.7% -4.4%
MSCI AsiaPac ex Japan 466.2 -0.3% -0.4%
SET Index
Last %Chg %YTD
SET Index 1,559.6 -1.0% 20.1%SET100 Index 2,304.9 -1.3% 19.2%
SET50 Index 1,041.0 -1.4% 17.8%
Cumulative Net Buy
Last 1M YTD
Foreigners (3,544) 5,675 (10,549)
Local institutions 1,190 2,035 55,006
Retail investors 3,593 (10,064) (60,627)
Proprietary (1,239) 2,354 16,170
Exchange Rate
Last %Chg %YTD
EURUSD 1.2448 0.6% -9.4%
USDJPY 117.82 -1.6% 11.9%
USDCNY 6.1755 -0.2% 2.0%USDTHB 32.77 -0.2% 0.2%
Commodities
Last %Chg %YTD
WTI (USD/bl) 60.9 -4.5% -38.1%
Brent (USD/bl) 64.2 -3.9% -39.3%
Gold (USD/tr oz) 1,226.3 -0.4% 2.1%
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Global Market Highlights
Stocks down as energy falls further (Reuters,
CNBC)
US stocks lost more than 1% on Wednesday as another bigdrop in oil prices hammered energy shares after OPEC cut its
forecast on 2015 demand for crude. The Dow fell 1.5%,
S&P500 fell 1.6%. Falling oil prices have added to worries
about global demand and raised concerns about earnings for
energy companies,with year-end tax selling putting additional
pressure on the group. The S&P energy sector is now down
14.7% for 2014.
European shares closed largely lower, continuing a declining
trend as Greek political fears and slumping oil prices weigh.
The pan-European Euro Stoxx 600 index fell 0.3%, with the
U.K.'s FTSE 100 index and the French CAC closing down 0.4%
and 0.8%.
Yield on 10-year US Treasury note fell 4bps to 2.16% after a
strong debt auction.
Asian stocks dropped, led by Japanese shares, and the dollar
weakened after oils collapse triggered the biggest loss for
U.S. stocks since October.
Oil Plunge Rips Through Markets as Investors
Seek Bottom (Bloomberg)
Oils collapse is rippling through financial markets, broadening
a selloff in stocks beyond energy companies and leaving
investors with few havens as assets from metals to corporate
debt sink. Brent crude fell below $65 for the first time since2009 as OPEC cut its forecast for 2015 demand, raising
concern over the strength of the global economy and leaving
investors contemplating when oils plunge will reach a bottom.
The selloff sent the MSCI All-Country World Index to its
biggest drop in two months. Traders are almost certain that
Venezuela will teeter into default as bonds plunge to a 16-
year low and the cost of default protection soars to a record.
A measure of risk in the U.S. junk-bond market rose the most
in two months. Copper fell 1.2% and gold slipped 0.2%.
Investors sought relief in Treasuries as 30-year bond yields
fell to a seven-week low, and the yen capped its biggest
three-day gain versus the dollar in more than a year.
OPEC lowered its projection for 2015 demand for crude by
300,000bbl/day to 28.9mn/day, the lowest level in 12 years
on surging U.S. shale supplies and lower demand estimates
amid signs of a slowing growth in economies from China to
Europe. That's about 1.15mn a day less than the group's
pumped last month, and the 30mn bbl target.
Saudi: Why should we cut production? Why?
(Reuters, Bloomberg)
Asked whether he thought it would be necessary to reduce oil
production prior to OPEC's next scheduled meeting in June,
Saudi Oil Minister Naimi responded: "Why should we cutproduction? Why?". Naimi reiterated that the market must be
left to balance itself, a shift from longstanding Saudi policy of
acting as a swing supplier. Oil prices fell more than $10 since
the 27 Nov OPEC meeting.
Naimi said Saudi produced 9.6-9.7mn bpd in Nov. "That is not
going to change unless other customers come and say they
want more oil," he said. US crude inventories rose to the
highest level since started in 1982. Energy shares in S&P 500
fell 3.3%.
Crude prices now are below what 10 out of OPECs 12
members need for their annual budgets to break even. North
American High Yield Index, a CDS benchmark, rose 14.9bps to
371bps.
China Stocks, Currency and Corporate Bonds
Fall (WSJ)
Chinas stocks, currency and corporate bonds suffered their
largest tumbles in years Tuesday after Beijing took fresh steps
to rein in growing risks in the countrys debt-laden financial
system. The selloff started in the bond market, as traders
rushed to sell and raise cash after a regulator banned
investors from using low-grade corporate debt as collateral to
borrow cash. The Shanghai index slumped 5.4% to record its
biggest fall since 2009.
The Tuesday selloff was triggered when Chinas securities
clearing house said late Monday it raised the threshold for
corporate bonds qualifying as collateral for repurchase
agreements, or repos, which are short-term loans with
maturity spanning from overnight to 182 days. These are
used as a key channel of short-term funding for bond
investors. The new rule also applies to bonds issued by local
govt financing vehicles that arent explicitly covered by local
authorities budgets.
The combined outstanding value of repos on the countrys two
exchanges has surpassed 700bn yuan (US$113.47bn).
According to estimates from Shenyin Wanguo Securities, the
total value of corporate bonds disqualified as repo collateral
under the new rule exceeds 1.25trn yuan, or 60% of all
outstanding corporate bonds listed on Chinas two stock
exchanges.
The move to cut down on the use of this risky debt is central
to Beijings structural reforms aimed at sustaining economic
growth over the long term by reducing reliance on state
investment and exports and increasing the role of
consumption. That policy shift, though, could hold back
expansion in the short term if it chokes off credit to industries
such as steel and cement, where problems with overcapacity
are widespread.
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Budget Deficit in U.S. Narrows as Employment
Growth Accelerates (Bloomberg)
The budget deficit in the U.S narrowed more than economists
projected in November from a year earlier, Treasury
Department figures showed, as rising employment helpedboost receipts and spending fell.
Outlays exceeded receipts by $56.8 billion last month,
compared with a $135.2 billion shortfall a year earlier, the
department said in a report released in Washington. The
median estimate in a Bloomberg survey of 21 economists was
for a $64 billion deficit.
Stronger hiring has helped to shrink the countrys annual
deficit from a record $1.42 trillion in 2009, and economists
expect the decline to continue in the fiscal year that startedOct. 1. The Treasury in October said the shortfall in the 12
months ended Sept. 30 was $483 billion, or 2.8 percent of
gross domestic product, and the Congressional Budget Office
said in August that it expects the deficit to shrink to 2.6
percent of GDP this fiscal year.
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Market Wrap
SET 1,559.56 -15.99pts -1.01% Value US$1,679mn
Net Buy/Sell Frgn-US$107mn Inst+US$36mn Prop-
US$38mn Ret+US$109mn
The market was weak from the outset, in part on follow-
through selling from Monday afternoon but more
importantly Energy-3.97% continued to be sold off with
bargain hunters getting overtaken early on.
The sector was the most active and accounted for the
majority of the fall of the index.
PTT-6%, PTTEP-3.94%, PTTGC-3.88% alone accounted for -10
points of the -16 points lost on Tuesday.
Nothing new, but the lower oil goes the bigger the
inventory loss and potential losses on impairments.
In a repeat of Monday, the market sold off over the last 30minutes led down by futures.
Banks+0.07% managed to stay in the positive, but
Telecoms-0.49% gave up gains and Property-0.52% and
Construction Materials-0.84% which were softer during the
day took a hit into the close.
Contractors+0.64% got a late boost in the afternoon after
the government announced the award of four contracts
worth Bt28.5bn or US$864mn for the extension of the Dark
Green mass transit line.
The Cabinet passed new stimulus measures but they are
seen as modest policies at best and had no impact on the
market.
Chart: SET Intraday movement
1,540
1,550
1,560
1,570
1,580
10:00
10:30
11:00
11:30
12:00
13:59
14:29
14:59
15:29
15:59
16:29
1556.5
Day Low
Previous Close
1575.551576.11
Day High
Close
1559.56
Source: Bloomberg
Top Gainers Last %Chg %YTD
RS 17.30 +4.2% +143.7%
ITD 7.80 +3.3% +101.0%
UV 9.85 +2.6% +42.8%
GUNKUL 30.00 +2.6% +240.9%
EGCO 167.00 +2.1% +36.3%
Top Losers Last %Chg %YTD
PSL 15.40 -7.8% -27.7%
PTT 345.00 -6.0% +20.6%
BH 142.50 -5.0% +62.4%
ROBINS 44.00 -4.9% -8.3%
SPCG 26.25 -4.5% +38.2%
Most Active Last %Chg %YTD
PTT 345.00 -6.0% +20.6%TRUE 12.70 +1.6% +91.6%
PTTGC 55.75 -3.9% -29.4%
ADVANC 245.00 -2.0% +22.8%
KBANK 242.00 +1.3% +55.1%
Sectoral performance Last %Chg %YTD
SET Index 1,559.6 -1.0% 20.1%
SET Energy & Utilities 19,795.7 -3.8% 3.4%
SET Banks 618.5 0.1% 35.4%
SET ICT 234.6 -0.5% 23.0%
SET Commerce 29,170.0 -0.7% 10.7%
SET Food & Bev 12,380.4 -0.7% 13.3%
SET Property 308.1 -0.5% 31.7%
SET Constr Mat 12,222.1 -0.8% 21.1%
SET Petrochem 801.8 -2.6% -18.5%
SET Health Care 4,242.9 -1.5% 54.7%
SET Transportation 229.3 -0.4% 41.6%
SET Property Fund 156.7 -0.5% -0.2%
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Todays news
Economy: Wage committee maintains Bt300
rate (Nation)
The tripartite Wage Committee has resolved to maintain thedaily minimum wage nationwide at Bt300, Permanent
Secretary for Labour Ministry Nakhon Silapa-archa, the
chairman of the panel, said Wednesday. He said the Bt300
rate will remain enforced throughout next year because the
Wage Committee has analyzed the information and found that
the living cost has not increased.
Politics: Academics push for intellectual
freedom (Nation)
201 academics from universities across the country called on
the Council of University Presidents of Thailand (CUPT) to
ensure and protect intellectual freedom that they said wasbeing threatened under current military rule. They submitted
an open letter stating that students and university lecturers
had witnessed unprecedented threats to their academic
freedom even as the country is undertaking reforms which
needed freedom of expression in order to succeed.
Economy: Officials to meet on Dawei's initial
phase (Bangkok Post)
Officials from Myanmar and Thailand will meet next month to
approve the framework of the initial phase of the delayed
Dawei development project. Arkhom Termpitayapaisith,
secretary-general of the National Economic and SocialDevelopment Board, said the two countries had already set up
policy committees to oversee the scheme. Deputy Prime
Minister MR Pridiyathorn Devakula will chair the Thai
committee, which is scheduled to meet its Myanmar
counterparts in Bangkok from Jan 7-9. The development
project in Dawei, a Myanmar city situated 350 kilometres
west of Bangkok, features a number of megaproject
investments including deep-sea ports and a special economic
zone (SEZ). In October, the Thai and Myanmar governments
agreed to revitalise the project by letting Thai firms play a
bigger role in the much-delayed SEZ when Prime Minister
Prayut Chan-o-cha paid an official visit to the country.
Economy: Narongchai defends small price cuts
at the petrol pumps (Bangkok Post)
Energy Minister Narongchai Akrasanee has defended the
decision not to cut retail oil prices in Thailand at the same
pace as the decrease in global crude prices. "We have
essentially maintained the levy collection for the state Oil
Fund from some types of fuels because the fund remains in
need of funding to be used for price interventions when oil
prices fluctuate," he said. The Oil Fund has a duty to subsidise
biofuels such as gasohol and biodiesel to promote the use of
alternative fuels in serving the government's policy to cut
reliance on imported crude oil. Global oil prices had fallen by
40% to US$66 a barrel yesterday from about $105 five
months ago, but retail oil prices in Thailand decreased by only
18% over the period. Mr Narongchai said the problem
stemmed from long-time subsidies of liquefied petroleum gas
(LPG), compressed natural gas (CNG) and diesel that caused
distortions to supply and demand. "Some motorists enjoyed
prices cheaper than the actual fuel cost for a very long time at
the expense of others. Now they still pay gas bills cheaper
than before but they cannot be as low as the actual cost
because we won't let anyone pay energy costs for you
through cross-subsidies," he said.
Petrochem: IVL upbeat about 2015 margins
(Bangkok Post)
Aloke Lohia, chief executive of SET-listed Indorama Ventures
Plc (IVL), one of the world's largest integrated polyester
product makers, says the company is sustainable thanks to its
strong principles, as polymers is a cyclical business. The
company decided to go global early on since it needed to
ramp up output. In 2003 IVL expanded to North America and
in 2006 to Europe. "In terms of finance we try to plan for
three years in advance with conservative projections to
ensure sufficient liquidity," Mr Lohia said at the Forbes Asia
forum. He said advance planning ensured a strong balance
sheet even when IVL wanted to acquire new assets. "As adownstream chemical company, we have the advantage of a
lower oil price. Our margins are getting better, so we're
optimistic about 2015," Mr Lohia said.
Aviation: Airports predict surge in traffic
(Bangkok Post)
Airports of Thailand Plc (AoT) sees a strong rebound in
passenger traffic through its airports in the year to September
2015, due mainly to the improved tourism outlook. The state-
controlled company, which operates six airports including
Bangkok's Suvarnabhumi, projects a 12% jump in combined
passenger throughput during October 2014 to September
2015 to reach 98.1 million, up from 87.6 million. That will be
a sharp rise from the marginal 1.67% growth seen in the last
fiscal year, caused by the country's political turmoil in the
first half of 2014. Poolsiri Virojanapa, senior executive vice-
president for accounting and finance at AoT, singled out post-
coup political stability for restoring passenger traffic growth
to the previous annual double-digit level.
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Stock Comments
Airlines NOK is most levered, but most lagged
airline stock to oil dive
NOK TB is now our top pick among Thai airlines
An over 30% drop in oil price over the last three months,
different hedging profiles and FX exposures have created
investment opportunities in Thai airline stocks and we have
lifted the sectors 2015 earnings by 34% and raised our price
objectives by 39% on average. We upgrade Nok Airlines (NOK)
and Asia Aviation (AAV) to Buy from Underperform. NOK (Bt20
PO) is the most leveraged Thai airline and our top pick given its
negligible hedging, tailwinds from weakening JPYTHB to support
NokScoot launch and an undemanding valuation of 7x 2015E
PER.
Oil price should remain depressed for some time
The decision by OPEC to withdraw from its role as the swing
producer of oil and let the market set the price is likely to result
in an extended period of low fuel prices. Our jet fuel price
assumptions are lowered from $120 per barrel for 2015/16 to
$85/90 in line with the Brent forward curve, plus a $10 crack
spread.
Selective bright spots on short-haul as hedgings are unequal
Airlines with the lightest hedging profile will benefit most. NOK
is the least-hedged at only 5% for 2015 followed by 7.5% for
AAV, versus 60% for Bangkok Airways and 70% for THAI.
Despite our concerns over a short-haul capacity glut, NOK and
AAVs limited hedging will give them significant cost advantages
to further explore down the demand curve, attract volume and
drive their earnings turnaround in 2015.
Weakening JPYTHB swings in favor of NOK, bad for THAI
NokScoot is in a very strong position to launch flights to North
Asia, in our view. In addition to its cost advantage derived from
a zero hedging profile, the falling JPYTHB (-12% in three
months) is a major tailwind as it expects Thailands outbound
sales to account for 70-80% of passengers. Conversely, THAIs
most profitable market (Japanese routes) generates 70% of
revenue in JPY. Together with a weakening EURTHB, we expect
THAIs yield to come under pressure even before taking the
endless growth of LCCs and Middle Eastern airlines into account.
Rating, POs and earnings upgraded for NOK and AAV
We upgrade NOK to Buy from Underperform and increase our
PO to Bt20 from Bt12.7 having increased core EPS by 60-90%
over 2015-16. We upgrade AAV to Buy from Underperform and
increase PO to Bt5.6 from Bt3.8 having lifted 2015-16 core EPSby 25-44%. We believe NOK has greater upside than AAV given
its discounted valuation, direct benefit from weakening JPYTHB
and beaten-up price performance since IPO. We reiterate our
Underperform rating on THAI with Bt11 PO (up from Bt9.8,
largely on higher book value from larger-than-expected FX
gains). Its high hedging profile is widening cost disadvantage
while the weakening JPYTHB and EURTHB will further pressure
its pricing and keep restructuring hopes at bay.
IVL - Back on the HVA expansion road (Buy/12-
month PO Bt27.40)
Fourth acquisition for IVL this year as it acquires PF Asia
As part of IVLs continued strategy to enhance its presence in
high-value-added (HVA) segments, IVL has announced it will
acquire Performance Fibers Asia (PF Asia) from an affiliate of
Sun Capital Partners, Inc. The transaction is to include all its
Asian manufacturing operations and the right to continue using
the name Performance Fibers. This is IVLs fourth acquisition
following its purchase of PHP Fibers (Filament yarns), SASA
(Polyester & PET) and Artenius (PET) earlier this year. IVL
expects to complete the deal within 1Q15.
Growing HVA auto applications
PF Asia produces premium polyester tire cord fabric (TCF) which
is used as reinforcing materials for automotive tires. Located in
China, PF Asia possesses an annual capacity of 41,000 tons of
polyester TCF and 48,000 tons of polyester tire cord yarn with
a 17% market share in China and 8% share of Asia capacity. The
company is the second-largest producer in China and the third-
largest in Asia.
Debt financing with reasonable pricing
The investment is estimated at US$200mn, translating into an
EV/EBITDA of 6x. The valuation is in line with IVLs investment
guideline of 5-7x of EV/EBITDA. IVL issued perpetual
debentures worth Bt15bn in October 2014 to finance all
potential acquisitions, lowering its net D/E to 0.8x (after the
debenture issuance). With an attractive EBITDA margin of 16%,
we expect PF Asia to add around US$23mn of EBITDA in 2015
(assuming the deal will be consummated by end-1Q15). We also
estimate that its NPAT will be boosted by US$9mn or 4% of our
2015E NPAT forecast following the acquisition. We see the
acquisition in a positive light.
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Market Summary
Global IndicesLast 1D 1W
% Change
1M 3M YTD 1Y
Dow Jones 17,533.2 -1.5% -2.1% -0.5% 2.8% 5.8% 9.8%
S&P 500 2,026.1 -1.6% -2.3% -0.6% 1.4% 9.6% 12.4%
Nasdaq 4,684.0 -1.7% -1.9% 0.7% 2.0% 12.1% 15.4%
FTSE 100 6,500.0 -0.5% -3.2% -1.7% -4.4% -3.7% -0.4%
STOXX600 115.6 -0.4% -3.0% 0.3% -1.8% 3.1% 7.5%
Nikkei 17,412.6 -2.2% -1.7% 3.8% 9.4% 6.9% 11.5%
Hang Seng 23,524.5 0.2% 0.4% -0.9% -4.6% 0.9% -0.9%
MSCI ACWI 414.8 -1.3% -2.4% -1.3% -3.1% 1.5% 4.0%
MSCI World 1,698.4 -1.4% -2.4% -0.9% -2.2% 2.2% 5.2%
MSCI Europe 115.6 -0.4% -3.0% 0.3% -1.8% 3.1% 7.5%
MSCI EM 958.7 -0.7% -2.8% -3.9% -10.4% -4.4% -5.3%
MSCI AsiaPac ex Japan 466.2 -0.3% -1.0% -3.0% -7.2% -0.4% -0.7%
SET Last 1D 1W 1M 3M YTD 1Y
SET Index 1,559.6 -1.0% -2.2% -0.5% -1.3% 20.1% 14.1%
SET100 Index 2,304.9 -1.3% -2.6% -0.1% -1.5% 19.2% 12.5%
SET50 Index 1,041.0 -1.4% -2.6% -0.2% -1.4% 17.8% 11.4%
SET Energy & Utilities 19,795.7 -3.8% -5.1% -8.7% -8.7% 3.4% -0.7%
SET Banks 618.5 0.1% -1.1% 1.2% -0.5% 35.4% 24.3%
SET ICT 234.6 -0.5% 0.5% 5.7% 6.8% 23.0% 12.1%
SET Commerce 29,170.0 -0.7% -3.1% -0.3% -6.3% 10.7% 6.6%
SET Food & Beverages 12,380.4 -0.7% -1.2% 2.4% -0.6% 13.3% 17.4%
SET Property 308.1 -0.5% -3.2% -3.1% -1.0% 31.7% 21.4%
SET Constr Mat 12,222.1 -0.8% -1.3% 3.6% 2.8% 21.1% 17.4%
SET Petrochem 801.8 -2.6% -7.9% -8.4% -13.2% -18.5% -21.0%
SET Health Care 4,242.9 -1.5% -2.4% -0.6% -1.1% 54.7% 45.6%
SET Transportation 229.3 -0.4% -1.1% 8.6% 6.3% 41.6% 29.4%
SET Property Fund 156.7 -0.5% -1.1% -2.0% -3.1% -0.2% 0.0%
Currency Last 1D 1W 1M 3M YTD 1Y
EURUSD 1.2448 0.6% 1.1% 0.2% -3.7% -9.4% -9.5%
USDJPY 117.82 -1.6% -1.6% 2.6% 10.0% 11.9% 14.6%
USDCNY 6.1755 -0.2% 0.4% 0.9% 0.7% 2.0% 1.7%USDTHB 32.77 -0.2% -0.3% -0.2% 1.8% 0.2% 2.2%
Commodities
Last 1D 1W 1M 3M YTD 1Y
WTI (USD/bl) 60.94 -4.5% -9.6% -21.3% -34.4% -38.1% -38.1%
Brent (USD/bl) 64.24 -3.9% -8.1% -22.6% -35.9% -39.3% -39.2%
Gold (USD/tr oz) 1,226.31 -0.4% 1.4% 6.5% -1.2% 2.1% -2.8%
Treasury Yield
Change in bps
Last 1D 1W 1M 3M YTD 1Y
US 2Y Yield 0.57 -4 +1 +3 +1 +19 +27
US 5Y Yield 1.56 -6 -4 -8 -23 -18 +11
US 10Y Yield 2.16 -5 -12 -20 -39 -86 -64
TH 2Y Yield 2.05 +0 +1 -14 -36 -57 -61
TH 5Y Yield 2.45 -1 +3 -13 -61 -96 -107
TH 10Y Yield 2.89 -2 -2 -20 -68 -109 -117
Cumulative Net Buy (THBmn)
1D 1W 1M 3M YTD 1Y
Foreigners (3,544) (2,995) 5,675 5,808 (9,954) (31,664)Local institutions 1,190 2,885 2,035 17,560 50,397 59,327
Retail investors 3,593 2,692 (10,064) (25,941) (53,981) (37,658)
Proprietary (1,239) (2,583) 2,354 2,573 13,538 9,996
Cumulative Foreign Flows (US$mn)
1D 1W 1M 3M YTD 1Y
Thailand (108) (91) 173 178 (282) (957)
Indonesia (4) (133) 311 (620) 4,262 3,915
Korea (99) 484 2,466 (764) 8,311 7,397
Taiwan (352) (359) 1,669 107 13,663 14,714
Philippines 6 (139) 481 (64) 1,246 1,130
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Dec 2014
Monday Tuesday Wednesday Thursday Friday
1 2 3 4 5
WHAPF XD Bt0.181
8 9 10 11 12
CITY
XD Bt0.16 M-AAA XD Bt0.193
IRC XD Bt0.6269 NPP XR 3:1
TPOLY
XB 10:1 @Bt1.0
15 16 17 18 19
AOT XD Bt3.40
22 23 24 25 26
29 30 31
Source: SET
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Daily bond reports
Thai govt bond yields
Tenor(Years) Thai Govt Bond Change (bps) Swap (MID) Change (bps) Bond Swap (bps)
1Y 1.99 0.00 1.835 -1.80 -15.502Y 2.05 0.00 1.915 -3.80 -13.50
3Y 2.21 -1.00 2.045 -4.30 -16.50
4Y 2.38 0.00 2.165 -5.50 -21.50
5Y 2.45 -1.00 2.280 -5.30 -17.00
6Y 2.61 -1.00 2.390 1.20 -22.00
7Y 2.65 -2.00 2.505 -3.50 -14.50
8Y 2.73 -2.00 2.590 2.50 -14.00
9Y 2.84 -2.00 2.680 4.00 -16.00
10Y 2.89 -2.00 2.760 -3.50 -13.00
Active Govt. Bond Tenor Yield Change (bps) Index %
LB15DA 1.01 1.951 0.00 6MTHBFIX 1.7804
LB176A 2.52 2.094 0.00 6MFDR 2.00
LB196A 4.51 2.371 0.00 MLR 6.75
LB21DA 7.03 2.653 0.00 BIBOR 2.28
LB236A 8.52 2.773 0.00Source: Bloomberg
Comments
-US Treasury yields collapsed on the uncertainty in Greece, Chinas credit tightening & oil price fall. 10Y US Treasuries lowered 15bps
to be at 2.15% now.
-The total trading value increased by 8%. THB bonds went down a few bps as we still expect buying flows with interest from onshore
& offshore.
-USDTHB is heading south having USDJPY led the FX market. USDTHB is now at 32.77 after being traded in the region of 33.00
during the past few days.
Calendar of Government Debt Securities Action in December 2014
Mon 8 Tue 9 Wed 10 Thu 11 Fri 12 Total
CB15312B - 25,000
CB15611A - 25,000
TB15107A - 15,000
TB15610A - 10,000
LB296A - 9,000 BOT168A - 30,000 114,000
Source : www.ibond.thaibma.or.th
Total Trading Value 831,769.76mn
Buy Sell Net
Asset Mgnt. Companies* 11,673.80 11,802.21 -128.41
Non-Dealer License* 2,472.66 0.00 2,472.66
Foreign Companies 2,685.28 3,571.58 -886.30
Remarks: Data excludes FX Bond / * Top 2 most active investors, Outright Trading TTM > 1YSource: Bloomberg, ThaiBMA
Thai Government Bond Curve US Treasury Curve
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Special Disclosures
Phatra Securities Public Company Limited (Phatra) does and seeks to do business with companies covered or mentioned in its
research reports. As a result, investors should be aware that Phatra may have a conflict of interest that could affect the objectivity
of this research report.
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warrants, Phatra may act as the market maker for such derivative warrants. As a result, investors should be aware that Phatra may
have a conflict of interest that could affect the objectivity of this research report.
Copyright 2014 Phatra Securities Public Company Limited. All rights reserved. Any unauthorized use or disclosure is prohibited.
This report has been prepared based on, among other things, fundamental research reports of Phatra Securities Public Company
Limited (Phatra). It is issued by Private Wealth Management Research team and is not a publication of Phatra Research Group
(Phatra Research). The information herein was obtained from various sources: we do not guarantee its accuracy or completeness.
Certain parts of this report are taken from previous research reports issued by Phatra and/or Merrill Lynch, Pierce, Fenner & Smith
Incorporated (MLPF&S). Please see full research reports for more details.
Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any
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its affiliates may have a financial interest in securities or the issuer(s) or in related investments.
This report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific
investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors
should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or
recommended in this report and should understand that statements regarding future prospects may not be realized. Investors
should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall.
Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future
performance.
Foreign currency rates of exchange may adversely affect the value, price or income of any security or financial instrument
mentioned in this report. Investors in such securities and instruments, including ADRs, effectively assume currency risk.
Investment principal on bonds can be eroded depending on sale price or market price. In addition, there are bonds on which
investment principal can be eroded due to changes in redemption amounts. Care is required when investing in such instruments.
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Corporate Governance Report of Thai Listed Companies 2013Disclaimer
The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is
made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the
information of a company listed on the Stock Exchange of Thailand and the Market of Alternative Investment disclosed to the public
and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an
evaluation of operation and is not based on inside information.
The survey result is as of the data appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the
survey result may be changed after that date. Phatra Securities Public Company Limited ("Phatra") does not confirm nor certify the
accuracy of such survey result. In addition, the list only includes companies under Phatras coverage except those specified.
Companies with Excellent CG Scoring by alphabetical order under Phatras Coverage
Advanced Info Service Airports of Thailand Banpu Bangkok Bank Bangchak Petroleum
BTS Group Holdings LPN Property
Development
Charoen Pokphand Foods Hemaraj Land and
Development
Total Access
Communication
Electricity Generating The Erawan Group Central Pattana INTUCH IRPC
Indorama Ventures Kasikornbank Krung Thai Bank Ch. Karnchang MCOT
Minor International Preuksa Real Estate PTT PTT Exploration PTT Global Chemical
Quality Houses Ratchaburi Electricity
Generating
Robinson Department
Store
Thai Airways
International
Siam Cement
Supalai Thanachart Capital Siam Commercial Bank Thaicom Tisco Bank
Thai Military Bank Thai Oil True Corporation Thai Vegetable Oil
Companies with Very Good CG Scoring by alphabetical order under Phatras Coverage
Amata Corporation BEC World Bumrungrad Hospital Big C Supercenter Berli Jucker
Central Plaza Hotel CP All ESSO (Thailand) GFPT Glow Energy
Home Product Center Land & Houses Major Cineplex Group Siam City Cement Sansiri
Asian Property
Development
Sino Thai Engineering
and Construction
Ticon Industrial
Connection
Thai Union Frozen
Product
Companies with Good CG Scoring by alphabetical order under Phatras Coverage
Asia Aviation Bangkok Chain Hospital Siam Global House
N/A
Companies without survey result available by alphabetical order under Phatras Coverage
MK Restaurant Thai Beverage Bangkok Dusit Medical
Services
Tesco Lotus Retail
Growth Property Fund
BTS Growth Infrastructure
Fund
Nok Airlines