Byron Wein August 2018
His latest monthly letter is outttt and here’s a few interesting snippets and a link to the rest of the piece
Today there are fewer public companies in the U.S. than at any time over the last 40 years. The peak year for public markets was 1996, when over 8,000 companies were listed on U.S. exchanges. Today that number is down nearly 50% to 4,336, according to the World Federation of Exchanges. This troubling trend isn’t just limited to the United States. The number of companies in developed markets around the world is shrinking: Canada, Switzerland, Germany, France, the U.K. and others have seen the number of listed companies fall 20%–60% from their peak. Mergers and acquisitions played a major role, but so did leveraged buy-outs.
The financial markets seem unsure how to value the shift toward inward thinking. In the second quarter small caps beat large caps as the Russell 2000 rose nearly 7.5%, and cyclicals like Energy and Discretionary stocks beat defensives. Those characteristics are typical in an environment of accelerating growth. But overseas equity markets were much more defensive, and those indices most sensitive to global growth and a rising dollar, such as emerging markets, are decidedly in negative territory. I do not think this non-performance can be blamed on valuation.
Source: Blackstone
Thai Banks – IFRS9 
So on the 17th July the Department of Business Development (DBD) under the Ministry of Commerce made a decision to delay the implementation of IFRS9 (new accounting approach) from January 1st 2019 to January 1st 2020.
So what?
  • We called this a bullshit move but regardless of our opinions here’s what may play out
  • Banks are given an extra 1.5 years to build an equity buffer, if the BOT increases interest rates towards the end of this year then this will multiply the increase in the equity buffer pre 2H19 provisioning
  • Heavy loan loss provisions are not going to happen in 2018 (but they will come in 2019)
  • Looks like the price action had been short term positive at best, there hasn’t been a sustained rise…maybe the market is calling bullshit on it too.
  • Which banks benefit? All of them!
    • No seriously? Yes all of them but arguably KTB could because there is a ton of crap in their books that they can ignore for another 12 months and for some reason BBL is touted as the best bet in the sector…never a good sign that the dinosaur is the best option…
BA going for Duty Free?
Several months ago, the company formed a new business unit to operate duty-free shops under the brand More Than Free at Samui, Surat Thani, U-tapao and Luang Prabang airports.
This year, Bangkok Airways set aside a 3.1-billion-baht investment budget for the expansion of a variety of businesses during 2018-19, including a plan to bid for a concession to operate duty-free business at main international airports.
So what?
I suspect that the duty free concessions will go to multiple parties in Thailand and perhaps internationally (Lotte Group from Korea has had their eye on it for a while) and won’t be the monopoly it has been for King Power. Could BA win? Sure they have some airports already, who knows, it’ll be interesting to see how this all unfolds.
Source: Bangkok Post
2Q18 #’s 
I’ve been mentally exhausted during the 2Q18 so I’ve spent some time getting myself ready to go through the deluge of the numbers about to come out. Banks are looking ok, energy as well, SCC is “surprising” to the positive, it may end up being another decent Q for the larger names, for the smaller domestic players I am nervous, farm income is rubbish, agri prices are low, the government spending has been tepid, so I don’t see it trickling down (and I’ve mused that trickle up is a better option for Thailand in a previous random thought)  but expect a commentary on it in 2 weeks or so.

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