Thai VI

CITI : ECON - Surge in Aug Imports on High Oil Bill and Re-stockin

Thailand Macro Flash
Surge in Aug Imports on High Oil Bill and Re-stocking
Import surge in Aug on high oil bill, re-stocking & fading supply disruption Oil imports (21.5% share of total imports) were up 77.5%YoY coupled with equally upbeat non-oil imports some of which benefited from fading supply disruption which bolstered headline imports in Aug by 44%YoY. We estimate non-oil imports soared by 37%YoY after growth of 5.1%YoY in the election month of July. We suspect inventory re-stocking, coupled with high gold prices, which probably elevated imports of precious stones/gems, gold, silver (137.6%YoY), lifted raw material imports by 41.2%YoY in Aug. Electrical parts (10.4%YoY), chemicals (34.7%YoY), iron and steel (40.8%YoY), and basic metals (27.8%YoY) posted upbeat gains, suggesting re-stocking. Sustained diesel price subsidies amidst easing oil prices and rising local motor vehicle sales (35%YoY in Aug) bolstered energy demand which probably bloated the oil import bill. Imports of vehicles & parts grew 11.8%YoY were driven by a 63%YoY gain in imports of passenger cars & trucks. Evidence of capex despite poor 2Q GDP was supported by a 97.1%YoY jump in imports of industrial machinery & parts, driving up imports of
capital goods by 37.6%YoY in Aug. Imports of computers & parts for export assembly grew 16.7%YoY. The over-40% import growth in Aug may be a one-off as supply constraints ease. Imports in the following months may show more sober estimates a better gauge of underlying import demand consistent with the export backdrop and domestic demand setting. We estimate seasonally-adjusted imports grew 28.3%MoM,overwhelming the 11.5%MoM SA decline in July likely restrained by political uncertainty during the month. For Jan-Aug, imports grew 28.6%YoY.


Better-than-expected export growth of 31.1%YoY Buoyant YoY growth of exports was driven by a 64.3%YoY jump in agricultural exports (18.8% share of total exports) complemented by a 16.5%YoY gain in shipments of manufactured non-food goods. High global grain prices, perhaps elevated by the new governments plan to give a higher rice subsidy, elicited a 61.8%YoY increase in exported rice quantity to support a 67%YoY jump in export revenues. Rubber (69.6%YoY), cassava (81.3%YoY), and food products (43.2%YoY) contributed to upbeat farm exports. Strong farm exports may not hold up in the face of reported flooding incidents. Electronic exports (hard disk drive) grew 9.3%YoY alongside electrical appliances up 5.2%YoY. Exports of vehicles & parts grew 3%YoY in Aug while shipments of jewelry and precious ornaments and construction materials posted gains of 65%YoY and 32.4%YoY respectively. We estimate seasonally adjusted exports fell 0.8%MoM versus a 0.4%MoM SA growth in July. For Jan-Aug, exports rose by 26.4%YoY. With import growth eclipsing export gains, the balance of trade position swung to a deficit of US$1.2bn in Aug after posting
a hefty surplus of US$2.8bn in July.

By markets: Exports to the US (3.6%YoY) slowed down compared to Japan (25.5%YoY) and broader Europe (26.7%YoY) in Aug. Intra-Asia (exJ) export markets posted robust gains of 40.5%YoY driven by ASEAN (36.5%YoY), China (50.1%YoY), Hong Kong (45%YoY), South Korea (51.4%YoY) and Taiwan (34.5%YoY).

ML : BANK - Loan growth picked up in August

Financial Industry - Thailand
Loan growth picked up in August

Strong loan growth in August
Thai banks registered strong month-on-month loan growth after a slow month of July. Loans grew 1.6% MoM, raising YTD growth to 8.3%. YoY growth was 16.8%. The strong loan growth was driven by working capital and retail growth. We maintain 10-12% loan growth forecast for 2012, given strong seasonality in 4Q.


In line with export growth
The strong loan growth was in line with the surprisingly strong export numbers in August, still growing at 31% YoY, despite the increasing concerns of a global slowdown and slower export growth elsewhere. However, we expect export growth to slow to the low-teens by the end of the year.


Healthy funding growth
Deposits and borrowings were growing in line with the loan growth, while rate competition remained strong. There was some migration from B/Es to deposits at smaller banks, presumably in anticipation of the new regulations aimed at curbing B/Es issuance. LDR (including borrowings) remained flat at around 81%.

Yield curve steepened
The yield curve steepened a little after a sell-off in Thai bonds and the baht, while the short end continued to increase. This would put pressure on the banks funding cost.

We cant hide from a global recession
While most economic indicators we have seen so far still point to robust growth, the market seems to have started to price in a global recession scenario, in which case Thailandand Thai bankscannot avoid the impacts, given that more than 70% of GDP is from exports. Our estimates are subject to downside risks if that scenario materialized.

อ่านแล้วยิ่งรมเสีย ไม่สนใจตัวเลขดีๆของจริงแต่กังวลอนาคตที่ยังไงคาดการณ์ออกมาก็ผิดประจำ

ครั้งนี้ก็ดีกว่าคาด แต่ก็คาดต่อไปอีกแล้วว่าอนาคตไม่ดี

ไรวะ บ้าจริงๆ

ผมก็ไม่รู้หรอกนะอนาคตจะเป็นไงแต่ ถ้ามันคาดการณ์กันไม่ถูกบ่อยๆแล้วมันยังเชื่อตัวเองกันอีกหรอ

RBS : BANK - Loan growth accelerates in August

Banks
Loan growth accelerates in August
Sector loans rose 15.9% yoy in August on seasonality and recovering demand post the election. Major Thai banks and we expect loan growth to continue in 2H11 and FY12 on ongoing investment demand and government stimulus.

Loan growth among Thai banks in August rose to 1.6% mom and 15.9% yoy
Sector loans in August rose 1.6% mom from -1% in July on recovering demand for working capital loans after Julys seasonal corporate/government loan repayments and investment term-loans post the election. Loan growth at SCB and KK was stronger than peers in August and has been so consistently ytd. The sectors 16% yoy growth in August was in line with our 15% forecast for FY11.

SCB and BBL expect positive loan growth into FY12
At meetings with SCB and BBL today, the pair confirmed double-digit loan growth guidance for FY11. SCB is aiming for 10% sector loan growth in FY12 (vs 1.2% in FY09) backed by large corporates ongoing acquisition/expansion plans (pent-up demand since 2004) and government consumption/investment stimulus, and despite potential economic turmoil in the US and EU in FY12.

The BoT considers to slow bill of exchange (BE) issues
The Bank of Thailand (BoT) is considering measures to shore up banks liquidity by preventing them from mobilising deposits via bills of exchange (BEs). It may do this by counting BEs as part of the required liquid asset reserve and/or limiting the level of BE issuance. This should have little impact on funding costs or loan growth given Thai banks current 22% liquid assets to deposits ratio vs 6% required reserve. However, a shift from deposits to alternative savings (BE, bonds, mutual fund, insurance) looks likely to continue due to a further reduction in deposit protection in FY12 and deposit competition from government banks. Therefore, we believe NIM squeeze is unavoidable for all banks, but those that can generate fee income from alternative saving products (SCB, KBANK) can continue to improve net operating margin.


More attractive valuations; SCB our top pick
Our universes PBV of 1.3x FY12F (vs 15% ROE) trails its 1.4x historical average and 1.6x historical high (vs 12% ROE). We still like Thai banks as our Bear-case sensitivity, dated 12 September, indicates downside from global macro uncertainty and upside from government stimulus will lower FY12F sector earnings by just 5% from our base case. We prefer SCB for continued improving profitability on competitive products/services/distribution network.

Jobless claims fall but recession still feared
By Jason Lange

WASHINGTON | Thu Sep 22, 2011 2:26pm EDT

WASHINGTON (Reuters) - Americans filed fewer new claims for jobless benefits last week but the decline was not enough to dispel worries the economy was dangerously close to falling into a new recession.

Applications for unemployment benefits dropped 9,000 to 423,000 in the week ended September17, the Labor Department said on Thursday. That was roughly in line with expectations.

With recession fears mounting, the Federal Reserve warned on Wednesday of "significant" risks to the economy as it announced a new program to boost growth through cheaper borrowing costs.

"Job growth this month is probably not going to be stellar," said Rudy Narvas, and economist at Societe Generale in New York, who said the data supported the Fed's decision to take further measures to spur growth.

"The economy is chugging along near stall speed," he said.

Fears of a renewed downturn are growing around the world. Reports in Europe and China showed private sector business activity declined sharply this month as the euro zone debt crisis and a stalling U.S. recovery hit confidence.

Seven world leaders demanded Europe take more decisive action and a European Central Bank study warned that the entire euro currency project was now in peril.

The Fed's warning and the weak European and Chinese data hammered global stocks, including U.S. equities. Worries about the global economy also led the dollar to rally as investors dumped riskier assets like European and Brazilian stocks.

A separate report from the Conference Board showed U.S. economic activity rose more than expected in August but still suggested it would not accelerate much any time soon.

The private firm's Leading Economic Index increased 0.3 percent. Still, "there is a growing risk that sustained weak confidence could put downward pressure on demand and business activity, causing the economy to potentially dip into recession," said Ken Goldstein, an economist at the firm.

The U.S. economy grew at under a 1 percent annual rate over the first half of the year, and forecasters think it's bumping along at a sub-2 percent pace now. Employment growth braked to a halt last month, raising recession fears.

MOVING AVERAGE RISES

While initial claims for state unemployment benefits dipped last week, the trend has moved higher. A closely watched four-week moving average of new claims edged up to 421,000, the highest level since the ended July 16.

Excluding one week in early August, first-time claims have held above 400,000 since early April, showing a still troubling pace of layoffs. A Labor Department official said there was no discernible effect from recent storms.

"It doesn't look very robust at all," said Robbert Van Batenburg, head of global research at Louis Capital Markets in New York. "Jobless claims are just one of the symptoms of what's happening with the economy."

Package delivery giant FedEx Corp said moderate global economic growth was a factor behind the firm's move to cut to its profit outlook for the full year.

Many analysts are skeptical the Fed's new program, which attempts to put downward pressure on borrowing costs by focusing its bond holdings more toward longer-dated debt, would do much to lower the country's lofty 9.1 percent unemployment rate.

A run up in oil prices early this year and the devastating earthquake in Japan, which disrupted global supply chains, had weighed on U.S. growth earlier this year.

Even as those headwinds to growth were facing, a spending battle in Congress that left the country nearly unable to pay its bills over the summer hammered confidence.

"The two ... clouds still over us are the European crisis and the deep concern that you can see across the world and around the country about whether the political system in the United States is up to the challenges we face," Treasury Secretary Timothy Geithner told a forum.

(Additional reporting by Richard Leong and Emily Flitter in New York, and by Rachelle Younglai and Margaret Chadbourn in Washington)