Daily SET and political comment

[thailandjunkie]

THAI RUNDOWN - MONDAY 22ND DECEMBER

** With Christmas week amongst us we can expect market turnover to drop significantly. Foreign investors will crawl home to be consoled by their nuclear familiies. Fund managers will be explaining how they managed to outperform the market by only falling 45% this year! And the good news?...domestic investors should be willing to push the market a little higher this week as the announcement of Cabinet positions in the new Abhisit Gov't are assessed. Thailand will be the only market open on Christmas day.
** Although this year has been exceptional the lack of foreign participation this week should allow a bit of breathing room for the SET. Traditionally the SET has staged modest gains over the festive season with the thought of massaging up year end closing prices on the minds of the domestic fund managers. Hopefully this year will be similar. The absense of the net selling foreigners - a cool Bt150 billion this year - will help.
** PM Abhisit will be announcing his policies next Monday. Some populist proposals are likely to be included to appease the former Thaksin support base....good move as the only way this Gov't is going to last any length of time is if it chucks money at this group. However, please don't forget other policies that will help to lead Thailand out of the quagmire it is stuck in economically...thanks Mr Mark!
** Worth keeping our wits about us leading up to January 11th. Another round of elections...and bar closures. Bangkok governor election and by-elections for MP's banned by the Constitutional Court will take place on this day. Bangkok governorship should go the Democrat Party candidate. However, many observers will be more concerned about the by-elections. Former PPP and Chart Thai MP's were banned....if the new elections fall in the same split then the new Gov't is not in danger (as the Chart Thai group joined the new Gov't). However, nervous investors will see this as a potential problem and probably vote with their sell orders beforehand....expect this to be the main news focus once the hangovers dissipate and the realities of the new year take hold.
** An interesting aside today. Can't find any reference to ex PM Thaksin in the press this morning. Wondered why i was feeling so good!
** Merry Christmas to all readers who are heading home for the holidays. For others, such as moi, then please keep reading as I will need the company.

www.thailandjunkie.blogspot.com

[thailandjunkie]

THAI RUNDOWN - MONDAY 29TH DECEMBER


** Domestic institutional investors seem to be the only ones who are prepared to add to positions in the SET for the moment. With market volume obviously anaemic last Friday for Boxing Day local funds took the opportunity to scoop up stocks...a cool USD38 mln worth. They have been obliged to invest long term retirement funds before year end...and also a bit of window dressing wouldn't do anyone any harm. Can't help thinking the SET will need to ease off after new year...or possibly before. Read on...
** The opposition "red shirts" are out in force this morning around Parliament. MP's are due to convene to discuss new policies introduced by the Abhisit Gov't. At the time of writing it looks like there is a good possibility that the debate will be cancelled due to lack of access to Parliament. It does make me wonder what the police are actually employed for?! Would any other country allow their Parliament to be besieged by protesters. Sure, allow protests....but can't the police ensure a simple in/out access route?! Assuming the debate is cancelled expect a reaction to the downside on the SET today.
** With the spectre of a fully fledged "red" revolution the prospects for the newly established Abhisit Gov't do not look that promising. Most Thai's are sick and tired of the political (and therefore policy vacuum) shenanigans and want to allow the Gov't to function.....at least for a few months. The danger of a new bout of street protests and possible violence is back...let's hope the blood is kept off the streets.
** Good to see \\ //// ////// attending an event over the weekend. Looking healthy aswell which will help calm nerves.
** New Finance Minister Korn has raised tax relief limits on mortgage payments from Bt100,000 to Bt200,000 per year. This will help the property sector although the recent run-up in prices over the last 3 weeks has probably factored in a lot of the good news.
** PM Abhisit has taken our advice (OK, so he might have thought of it by himself...) to keep some of the "poor friendly" policies of the previous administration. Free bus fares and subsidised electricity for small users will to be extended into the new year. Almost certain that the subsidised Bt30 medical scheme will also remain a key policy.
** Keep hearing dire warnings from my hedge fund associates. Forced selling has NOT finished as many many funds are backed-up with sell orders. These will take many months to be paid out as most funds have imposed restrictions on redemptions. Will almost certainly keep a cap on global equities for at least the next 3-4 months as redemptions are filled.

[thailandjunkie]

THAI RUNDOWN - MONDAY 5TH JANUARY


** Hope everyone had a good new year and 2009 turns out to be a tad better than 2008. Would be difficult to be much worse although I am certainly expecting a volatile market. Timing and trading will be key issues this year.
** The expected year end rally sort of worked for the SET last week. The market made some minor gains as local institutional funds continued to invest LTF and RTF monies before the year end cut-off. Domestic players and foreign investors seemed perfectly happy to sell into the rallies. Although global markets look to have found a short term base the gains are fragile in my opinion. January 20th will see Barack Obama officially inaugurated which should lead to some positive sentiment leading upto this date. The harsh reality of abysmal economic stats will still be hitting the newswires and I believe those numbers will crush the "Obama-effect" pretty quickly. In addition, the expectations cannot possibly live upto reality with regard to Obama....hope needs to be tempered with cold, hard common sense. This recession will be getting worse in the short term and 2009 overall is not going to be pretty.
** Therefore, global markets could see a decent couple of weeks although I would not advocate a mass buy-in. Wait for more misery and lower levels before digging the cash out from under the bed.
** Thailand will follow the global lead although domestic political issues will again have a serious impact. January 11th will see by-elections for seats that became vacant due to the banning of PPP and Chart Thai party executives last month. The old PPP seats should end up in opposition Pheu Thai hands whilst old Chart Thai seats should end up in the new Government's camp. Any significant split along differing lines will be taken as a positive or negative sign for the Gov't stability. So far street protests have been fairly muted. However, PM Abhisit has already had to cancel campaigning visits to certain provinces due to the threat of violence. The country is still in a political and social chasm.
** Thailand has two main areas of economic strength...or i should say DID HAVE. Tourism and exports. Both are facing serious problems. Global economic contraction has already been felt in November export stats....down 18% yoy. A horrible number for an export reliant economy . The next few months should see equally miserable numbers as the global "consumer" stops consuming. I would expect consumer spending to dry-up to a trickle in the next three months as Christmas/New Year festivities have probably drained any excess cash reserves for millions worldwide. Tourism - the other significant contributor to Thailand's GDP (around 6.5%) - is also in a deep hole. Although I would expect the recent airport closures to be forgotton relatively quickly the global recession will have a greater effect on visitor arrivals. Spending a couple of grand on flights to Thailand or a few hundred dollars on a wet weekend in Wetherby/Wisconsin (insert suitably miserable destination to get the idea) won't seem like such an easy decision this year. In addition the relative strength of the Thai Baht is changing the perception of Thailand as a "cheap" destination....Bt200 for a standard beer in a nightclub in Phuket or Bangkok...or USD7...or GBP4. Not exactly "cheap"!
** However, there are a number of positives which i will dwell on tomorrow.