As I was writing the market update for tomorrow…sitting alone in the office, I had a beautiful brain dump…so enjoy … goes (to my punjabi MC’s enjoy!), usual disclaimers – its disorganised, likely all wrong, not to be taken seriously, I love the king.

….I have various scenarios still running through my mind….brain dumping below, disorganised…not a recommendation etc etc, you’ve been forewarned.

Obvious recovery, but up and down figures skewed due to the shutdown in 2020, and the reopening throughout the whole in 2H21 until now. So some businesses had to over order inventory to catch up with the ridiculously high rate of change due to reopening combined with the confusion around supply chains and the subsequent delivery delays, and then some of them are dealing with the hangover from suddenly receiving a lot of inventory expecting high sales….but eventually this normalises/stabilises, but by when? Some businesses/industries didn’t go and overexpand/over-order – which ones? Off the top of my head, anyone infrastructure related i.e airlines, autos, shipping, etc, so will they still benefit from the reduced supply and current demand levels, probably yes but for how much longer. Interesting to figure this out between goods & services companies/industries.

People forget that it’s only been 5-6 months since Thailand opened up, some countries in the world still require travelers a vax shot today – even though…well it’s proven to not stop any spread…but that’s a different rabbit hole I prefer not go down (why aren’t many people pointing guns at their governments for locking us down)…north asia is just opening, Korea, Japan, Taiwan, HK, and Chynaaa. That’s a lot of consumer and business demand that should wake up and drive the regional economy over the next 9 months…at least. Just imagine in 12 months from now, no silly vax requirements, free travel throughout the world again for everyone, who benefits?

But we are also seeing the demand dropoff in the US and Western Europe, will this drop in the US & western eu businesses and consumers be offset by the upcoming domestic demand in Asia? Perhaps yes for certain businesses/industries…which ones…

Interest rates are still increasing…not sure we’re seeing a pause or a drop as some hope. As I must’ve ranted in the past I love the fact that there’s a cost to money again…it’s about time…this will eventually revitalise real businesses to start again and less speculation on property/stocks/shitcoins (tho part of me thinks bitcoin is looking interesting again as a trade…), which eventually then drives economies etc etc…but several overindebted companies are going to be fooked. Thankfully we don’t see too many of them in this part of the world other than the private hotel/real estate players…but every country will have a different cost of capital, so … given that TH & SG has a lower cost of capital than say… VN, PH, ID, even the US, then wouldn’t it make sense that the companies here deserve a higher valuation? Given that they can raise capital and grow throughout the region/world, foreign comp can’t compete on a balance sheet basis, though yes on innovation/product/services.

Inflation – higher energy costs are here, likely to stay, who benefits? Energy suppliers, O&G, coal mines, etc etc, which companies can continuously pass these on, how much more shrinkflation will be accepted by customers, which products/services will benefit from the substitution decision making by consumers.

Politics – ah the fun waste of time that politics is yet we still need to pay attention given the impact it has on businesses as we’ve seen under the idiots that are prayuth and friends (idiots to us, but great geniuses for their friends). So sometime in the next 6 months, Thailand is going to have an election….so what? When the situation goes from absolutely 8ucked up to bad, well that’s a massive improvement normally seen throughout the economy….I can paint a positive momentum picture due to demographic changes and with Chadchart being elected by a landslide that we’re going to see positive changes here. Or I can paint the messy outcome of the military and friends placing themselves in multiple political parties, the dirty cunts that are Bumjaithai acting as Kingmakers and profiteering off our tax capital and the country’s debt issuance, to fill up their bank accounts in Singapore, and land purchases throughout the country, and the military and friends still anointing 30% of the senate for themselves. Pheu Thai is a shadow of it’s former self, it’s a family dynastic play at the moment, I mean wtf, hasn’t this country learnt by now that having 1 family in charge isn’t a good thing? All their best players have left. I can’t see who’s going to be PM at the moment. Rumours on Srettha from Sansiri, given his closeness to Yingluck, or that Chadchart may be appointed as a good independent choice…from the existing list, the rest sigh…f it. All useless. But back to markets, I do expect to see brokers begin talking about a pre-election rally soon.

What else…I think that’s enough…

  1. Good read. thanks. for bringing me up to date re: Chadchart’s success’ – do you have an opinion as to the risk factors relating US$ indebtness by the business sector?

  2. peter satrapa-binder

    very interesting thoughts. Thx! 🙂 just two of mine here:

    – china opening up: even so, they have a lot of problems over there (property sector, xi jinping closing down whole industries at will (e.g. private tutoring, etc.). currently india is my new favourite in asia. asean may profit too.

    – bitcoin investing: well, it’s fallen quite a lot. but with the high energy prices i see their big problem in their huge energy demand. i’d see it as probable that more governments might for example forbid bitcoin mining within their countries in the future because of this.

    but maybe they will manage to change from proof -of-work to proof-of-stake, or anything else?

    anyhow, my choice for now would rather be ethereum.

    • I have a simple viewpoint on India for the past 5 or so years, it’s where the white money is going, meaning US, European, UK companies are investing there.

      btc – don’t know, just a trade, every human will find the information that supports their own biases.

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