Earnings season has started with fincos’ being the first sector to release results. As of writing – TISCO, AEONTS and KTC have reported #’s that are -20% YoY or more, KBANK just announced mid-day today and its -70% YoY

But we know this. We know that ~10-20% of GDP comes from tourism and with that Thailand’s economy is going to be $hit this year. The knock on effects are rather straightforward, no tourist receipts => retail/restaurants closing => rental rates at shopping centers/etc falling => value of REITs declining => NPLs at banks increasing => higher unemployment throughout the country => social unrest (just starting).

And to those whom think that the market doesn’t make sense given the weak economy, I say yes that’s correct, but if you run a regression between the annual market and the annual economic performance you’ll see an incredibly low correlation. The market in the ST-MT does not equal the economy…

  1. peter satrapa-binder

    fully agree to your analysis, but also you wrote:

    …=> social unrest (just starting). the problem is that social unrest will again put some parts of the economy under even more pressure, so it does not end there (see hong kong even pre-covid for example)…

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