Thailand s investment opportunities. Dr. Pakorn Peetathawatchai Chief Strategy and Finance officer The Stock Exchange of Thailand 2 February 2013

Transcription

1 Thailand s investment opportunities Dr. Pakorn Peetathawatchai Chief Strategy and Finance officer The Stock Exchange of Thailand 2 February 2013

2 Thailand s investment opportunities Thailand s economic fundamental Robustness and profitability of Thai listed companies Resilience and performance of SET Trading at SET 1

3 Thailand s economic fundamental GDP is expected to grow % in 2013, driven mainly by public and private investment, and continued domestic demand stimulation policies. data as at December 2012 (%YoY) Q3 Q4 Full year Q1 Q2 Q3 Q4 e Projection GDP Growth Private consumption Private investment Public consumption Public investment Export value of goods (USD) - Import value of goods (USD) - Number of tourists (growth rate: Y-o-Y) n/a Source: Office of the National Economic and Social Development Board and Department of Tourism 2

4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Thailand s economic fundamental Thailand s fiscal position remains strong, with public debt at 43.3% of GDP With large international reserves, Thailand is well positioned to weather external financial shocks. Maintaining low and stable inflation rate, moderate monetary policy could be applied. Public debt to GDP and fiscal deficit to GDP % e Inflation % Fiscal balance/ GDP (LHS) headline inflation Public debt/ GDP (RHS) core inflation % External debt and international reserves Unit: billion USD 200 Short-term Gross External Debt 150 International reserves Nov-12 Policy interest rate % Source: Bank of Thailand; Ministry of Finance 3

5 Thailand s economic fundamental Loan growth has been accommodated by fundamental strength of Thai banks which have improved markedly since the financial crisis of Capital adequacy of Thai banks Non-performing loans % Billion baht 3,000 2,500 % , ,500 1, Tier 1 CAR NPLs NPLs to Total lending ratio Note: From August 2008 to November 2008, risk assets included risk-weighted assets for credit risk and market risk. From December 2008 onwards, risk assets included risk-weighted assets for credit risk, market risk and operational risk. Source: Bank of Thailand 4

6 Thailand s economic fundamental: economic drivers Thailand s growth momentum has been supported by the growth of provincial economies. Gross Provincial Product of Greater Bangkok and Provinces 100% 80% 60% 54.0% 61.4% 40% 20% 46.0% 38.6% 0% Greater Bangkok Provinces Thailand s Gross Provincial Product growth (rebased 2001) Rebased, 2001= Provinces Greater Bangkok Major city Secondary city Tourism hub Border trade city Industrial estate zone Note: Greater Bangkok includes Bangkok, Pathumthani, Nonthaburi, Samutsakorn, Samutprakarn and Nakornpathom Source: Office of the National Economic and Social Development Board; SET 5

7 Thailand s economic fundamental : economic drivers Thailand stands to benefit from the ASEAN Economic Community (AEC) that will become fully effective in Thailand s exports to ASEAN and CLMV* countries account for 24.7% and 7.4%, respectively. Thailand already has trade surpluses with most ASEAN countries except Myanmar, from which Thailand imports natural gas. Thailand s trade balance with other ASEAN countries Million USD 6, ,000 4,000 3,000 2,000 1, ,000-2,000 Note: CLMV= Cambodia, Laos, Myanmar and Vietnam Source: Bank of Thailand; SET Thailand s exports by destination Million USD 60,000 50, ,000 30,000 20,000 10,000 0 ASEAN (9) CLMV China EU (27) Japan US Thailand s exports by destination to total exports % ASEAN (9) CLMV China EU (27) Japan US 6

8 Thailand s investment opportunities Thailand s economic fundamental Robustness and profitability of Thai listed companies Resilience and performance of SET Trading at SET 7

9 Robustness and profitability of Thai listed companies Thai listed companies profits have been able to withstand major domestic and international shocks. Net profits of Thai listed companies Unit: billion baht 250 EU Debt crisis May Bird flu Apr 2006 H1N1 flu epidemic Mar Tsunami Dec 2005 Lehman Brothers bankruptcy Aug 2008 Political unrest April - May 2010 Nationwide flood Oct - Dec Coup d etat Sep 2006 Global economic slowdown Source : SET 8

10 Robustness and profitability of Thai listed companies While SET s P/E is attractive compared to peers, SET s dividend yield is among the highest. Forward P/E ratio Unit: times; data as at 28 December 2012 Market Dividend Yield Unit: percent; data as at 28 December Source : Bloomberg; SET 9

11 Robustness and profitability of Thai listed companies Thai listed companies have made significant improvements in corporate governance: Thailand s CG score ranking increased from the 8 th in Asia in 2007 to the 3 rd in 2012, according to the Asian Corporate Governance Association (ACGA); and 59 companies were awarded excellent standard in 2012 by the Thai Institute of Directors (Thai IOD). CG Watch market scores: 2007 to Hong Kong (67) 1.Singapore (67) 1.Singapore (69) 2.Singapore (65) 2.Hong Kong (65) 2.Hong Kong (66) 3.India (56) 3.Japan (57) 3.Thailand (58) 4.Taiwan (54) 4.Thailand (55) 4.Japan (55) 5.Japan (52) 4.Taiwan (55) 4.Malaysia (55) 6. Korea (49) 6.Malaysia (52) 6.Taiwan (53) 6. Malaysia (49) 7.India (49) 7.India (51) 8.Thailand (47) 7.China (49) 8.Korea (49) 9.China (45) 9.Korea (45) 9.China (45) 10.Philippines (41) 10.Indonesia (40) 10.Philippines (41) 11.Indonesia (37) 11.Philippines (37) 11.Indonesia (37) Source: ACGA, September 2012 Thai IOD CG rating: 2008 vs 2012 Rating Source: Thai IOD Number of listed companies 2008 % 2012 % 5 stars 22 5% 59 12% 4 stars % % 3 stars % % 2 stars and below (including companies in the litigation procedures/ pending further clarification to governing bodies) % % Total % % 10

12 Thailand s investment opportunities Thailand s economic fundamental Robustness and profitability of Thai listed companies Resilience and performance of SET Trading at SET 11

13 Resilience and performance of SET SET s market capitalization was 386 billion USD (29 Dec 2012) with a well diversified investor base. Local retail investors have played a key role in providing liquidity to SET and stabilizing SET index amid volatile international capital flows. In 2012, net buy by foreign investors amounted to 76.9 billion baht (2.5 billion USD). SET index and net buying position in SET Unit: billion baht (LHS), index (RHS); as at 28 December 2012 Local institutes Proprietary trading Foreign investors Local retail investors SET index ,600 1,400 1,200 1, Transactions by investor type Unit: percent; as at 28 December Foreign investors Local institutes YTD Net buying position in SET Unit: billion baht; as at 28 December 2012 Local institutes Proprietary trading Foreign investors Local retail investors 7.2 Local retail investors Proprietary trading Source : SETSMART

14 Resilience and performance of SET SET s average daily turnover has been significantly higher than that of other emerging markets in South East Asia. SET s turnover velocity has been the highest in South East Asia. Average daily turnover (2008 December 2012) Unit: million USD 1,800 1,600 1,400 1,200 1, SET average daily turnover between 2-25 Jan 2013 = 1,792 MUSD Share turnover velocity* (2008 December 2012) Unit: percent 120% 100% 80% 60% 40% 20% 0% SET turnover velocity as of 25 Jan 2013 = 114% Singapore Exchange Indonesia SE Philippines SE Thailand SE Bursa Malaysia Singapore Thailand Indonesia Bursa Malaysia Philippines Source : World Federation of Exchanges (WFE) *Share turnover velocity is calculated by {Monthly EOB Domestic Share Turnover / Month-end Domestic Market Capitalization) *12 13

15 Resilience and performance of SET SET 2012 YTD index performance has reflected confidence in strong recovery and resilience of Thai listed companies. SET index performance was among the best in the world index performance Unit: percent; as at end December In USD In local currency Thailand Philippines India Singapore Vietnam Indonesia Malaysia China 3-year index performance Unit: percent; data as at end December In USD In local currency Source : SET Philippines Thailand Indonesia Malaysia India Singapore Vietnam China 14

16 Thailand s investment opportunities Thailand s economic fundamental Robustness and profitability of Thai listed companies Resilience and performance of SET Trading at SET 15

17 Trading at SET SET has a diverse product ranges to meet the needs of diverse customer segments. Cash market Derivatives market Equities Commodities Fixed Income Currency Common stocks SET50 index Gold futures 3M BIBOR USD futures Warrants futures Silver futures futures Derivative warrants SET50 index Oil futures 6M THBFIX ETFs options futures - Gold ETFs Sector index 5Y Gov bond - Index ETFs futures futures - Foreign ETFs Single stock Property fund (REITs in 2014) futures Index - FTSE SET index series - FTSE SET Shariah index 16

18 Trading at SET SET 50 price performance & dividend yield 2012 Ticker Beginning 2012 (Baht) End 2012 (Baht) Chg. (%) Div yield (%) 1 CPN AOT... 3 BJC MAKRO.. 5 PS CPALL... 7 MINT TRUE... N/A BIGC.. BCP.... BTS SCCC.. INTUCH.. BH... KBANK... Ticker The order ranking by the highest to the lowest %price change Note: data as 2/1/ /12/2012 Source: SETSMART Beginning 2012 (Baht) End 2012 (Baht) Chg. (%) Div yield (%) LH.... BEC.. EGCO... ROBINS.... SCB.... ADVANC... BAY... DELTA... TCAP.... SCC.. BGH... TISCO.. GLOW... RATCH... BLA.... Ticker Beginning 2012 (Baht) End 2012 (Baht) Chg. (%) Div yield (%) HEMRAJ.... KTB.... BBL.... DTAC.... SPALI.... TUF... TMB.... TOP.... PTTGC.. HMPRO... THAI.. N/A PTT.. CPF... IRPC.... PTTEP. -.. ESSO TPIPL IVL BANPU -.. DCC

19 Trading at SET Average daily volume of major derivative products Unit: contracts Trading volume of gold futures in Asia Unit: contracts 20,000 18, ,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 SET50 Index Futures Source: Thailand Futures Exchange Single Stock Futures Gold Futures Source: The Futures Industry Association 18

20 Trading at SET 2 options to get all benefits from investing in Thai stocks. Option 1: Mostly for strategic shareholders Trade stock-f Most SET-listed Thai companies have foreign ownership restriction. Check out foreign ownership restriction of each stock via >> company/securities info >> equity >> then select your preferred company. Option 2: General option Trade NVDR stock or stock-r Another option is to trade NVDRs. (Non- Voting Depository Receipts) Obtain all financial benefits with the exception of voting rights. Gain greater efficiency, flexibility and convenience as if you are local investors. Proportion of trading value by type of stocks by foreign investors 7.61% 49.62% Local Shares Foreign Shares 42.77% NVDRs Source: SET, May 2011-April 2012 Remarks: Trading stocks on local board is applicable. However, to get all rights and benefits, stocks should be transferred to stock-f or stock-r

21 Trading at SET: Select companies/ Securities info tab Search by stock symbol 1 Market summary 20

22 Trading at SET: Detail of each PLC: price, financial ratio Stock Calendar of rights and benefits Stocks in pipeline for IPOs in this year Statistic on the number of listed companies and market capitalizations List of Index constituents in SET 100, SET50, FTSE SET index Opportunity Day: A day for PLC to communicate with Investors, Analysts on their recent business and operations. 21

23 Trading at SET: Opportunity Day Webcast Opportunity Day Webcast Live from Meeting room 3 channels to view and join Live opportunity Day 1. Website iphone & Smart Phone 3. App OppDay on ipad Allow SET to broadcast VDO File of Company s Analyst Meeting Note: Presentation in English is currently still limited. However, the company presenting in English are increasing gradually. 22

24 At Invest ASEAN, Singapore An integrated oil & gas company ranked 95th on Fortune Global 500 in Thailand s largest listed company with over 30 billion USD of market capitalization as at end Dec A dominant player in gas business, including gas transmission and gas separation plants, and oil business, with 38% market share in oil retail nationwide. Thailand s flagship petroleum exploration and production company and one of the largest E&P operators in ASEAN countries with operation around the world. The company has aspiration to grow its production volume from 300K bpd to 900 bpd by 2020 with two thirds from organic growth. Thailand s fifth-largest bank in term of assets, loans, and deposits. Krungsri (Bank of Ayudhya) is the largest card issue in Thailand with 6.1 million accounts (credit card, sales finance/ personal loans) in its portfolio. Krungsri Auto, the company s flagship automobile financing service provider, is the second largest auto hire-purchase operator in Thailand. Krungsi s micro finance s arm (CFGS) is the pioneer in micro finance services. 23

25 Appendix The Stock Exchange of Thailand (SET) & Thai PLCs

26 The Stock Exchange of Thailand (SET) For more than three decades, The Stock Exchange of Thailand (SET) has stood the test of time to be the center of Thailand s capital market and a thriving and dynamic exchange offering a full range of products, services and trading infrastructure for investors, listed companies and other participants. Its progressive developments over the past few years resulted in the upgrade of the Thai capital market by FTSE to the advanced emerging market status. SET offers investors the advantages of being a one-stop service for securities, derivatives, and bonds for both wholesale and retail markets. Its dividend yield is among the highest in Southeast Asia with market capitalization of $390 billion (at the end of Dec 2012). The exchange has become the region s highest turnover velocity and the highest average daily turnover in Southeast Asia. The exchange also provides compelling investment opportunities with healthy profitability and attractive returns of Thai listed companies. During last year, SET index has increased by 36%. Furthermore, MSCI Berra, the leading index provider, has added 13 stocks into MSCI Global Standard Indices and MSCI Global Small Cap Indices since November To raise its competitiveness, SET is now upgrading IT infrastructure with cutting-edge features that match leading global exchanges, making its trading system to be one of the fastest systems in Asia. The Stock Exchange of Thailand 62 Ratchadaphisek Road, Klongtoey, Bangkok

27 SET s speaker Dr. Pakorn Peetathawatchai Chief Strategy and Finance Officer, The Stock Exchange of Thailand Dr. Pakorn has been appointed as Chief Strategy and Finance Officer, The Stock Exchange of Thailand, since January He oversees the Exchange s overall strategy and supervises the exchange s finance. In addition, he also oversees the Capital Market Research Institution which is the research arm of the exchange to help strengthen and shape the development of capital market in Thailand. Prior to this role, he was Chief Marketing Officer, The Stock Exchange of Thailand, since October Under this role, he overseen the Exchange's products, which are equities, bonds, and derivatives, and developed products that suit the needs of domestic and overseas investors. He also managed product and product-related information and market access. Lastly, he supervised customer and channel services, strengthened all the services offered to securities companies, retail investors, and domestic and international institutional investors. Previously Mr. Pakorn was a Senior Executive Vice President for Mit Phol Sugar Corp., Ltd. where he supervised the company's Finance, Information Technology, and Risk Management. He has strong treasury background from Siam Commercial Bank PCL as the Head of the bank's Treasury Group and investment experience as the Chairperson of the Investment Committee at SCNY Life and served as an Advisor to the Investment Committee, Government Pension Fund, and a member of the Capital Development Sub-Committee, Ministry of Finance. Mr. Pakorn now serves as a member of the Asian Bond Fund - Thailand Monitoring Committee, Bank of Thailand. He received his Ph.D degree in Finance and Economics from Boston University, United States. 26

28 Corporate Participants PTT Public Company Limited: PTT Mr. Sukrit Surabotsopon Corporate Speaker Senior Executive Vice President, Petrochemicals & Refining Business Unit Ms. Nidcha Jirametthanakij Vice President, Investor Relations Ms. Ornkamol Vitavasiri Financial Officer, Investor Relations PTT Exploration and production Public Company Limited: PTTEP Ms. Penchun Jarikasem Corporate Speaker Executive Vice President, Finance & Accounting Group Mr. Yongyos Krongphanich Senior Vice President, Finance & Strategic Information Technology Division Ms. Nitcha Namtip Investor Relations Bank of Ayudhya Public Company Limited: BAY Mr. Poonsit Wongthawatchai Corporate Speaker Senior Vice President and Manager, Investor Relations Department Ms. Virachorn Srisupya - Banking Analyst Mr. Phuchid Junsaengsook - Banking Analyst 27

29 PTT Public Company Limited: PTT PTT Public Company Limited, an integrated oil & gas company ranked 95th on Fortune Global 500 in 2012, is Thailand s largest listed company with over 30 billion USD of market capitalization as at end Dec PTT is a dominant player in gas business, including gas transmission and gas separation plants, supplying 70% of Thailand s power generation, and oil business, with 38% market share in oil retail nationwide. Its downstream petrochemical and refining associates account for more than half of Thailand s capacity. PTT s investments and operations are in 22 countries across the globe, covering all 11 ASEAN countries. Mr. Sukrit Surabotsopon Senior Executive Vice President, Petrochemicals & Refining Business Unit Mr. Sukrit serves as a Senior Executive Vice President, Petrochemicals & Refining Business Unit of PTT Public Company Limited (PTT). Prior to that, he held several positions within PTT and Thai Oil Public Company Limited (TOP- one of PTT s listed subsidiaries). Mr. Sukrit had worked at TOP from 1980 to 2009 before his assignment to PTT as an Executive Vice President Subsidiary Planning & Management, Petrochemicals & Refining Business Unit. He started his career at TOP as a process engineer, which later allowed him to be involved in several refinery expansion projects including the development of aromatics and lube base oil complexes. His later roles at TOP include a Technology Manager, an Operations Manager, and an Assistant Managing Director Strategic Planning and Business Development. Mr. Sukrit is the key person in the restructuring of PTT Group s Petrochemicals and Refining Business. His current project includes the Amalgamation of PTT Chemical Public Company Limited (PTTCH) and PTT Aromatics and Refining Public Company Limited (PTTAR), later known as PTT Global Chemical Public Company Limited (PTTGC). In addition to his responsibilities at PTT, Mr. Sukrit is also a board member at Thai Lube Base Public Company Limited, Thaioil Ethanol Company Limited and Thaioil Energy Solutions Company Limited. 28

30 PTT Exploration and Production Public Company Limited: PTTEP PTT Exploration and Production Company Limited or PTTEP is Thailand s petroleum exploration and production company with strong commitment to explore, develop and produce petroleum in Thailand and other countries, as well as to invest in important strategic related businesses to strengthen national energy supply. PTTEP has invested for 28 years, in the exploration and production of petroleum both in Thailand and abroad vigorously. The company concentrates its investment in high capacity petroleum fields that can contribute to the company s sustainable growth and at the same time create strong foundation for the country s energy capability. Currently, PTTEP has invested in over 40 petroleum exploration and production projects in Southeast Asia, the Middle East, Africa, Australasia and North America. The company was founded in 1985 and is headquartered in Bangkok, Thailand. Exploration and Production Public Company Limited is a subsidiary of PTT Public Company Limited. PTT Ms. Penchun Jarikasem Executive Vice President, Finance and Accounting Group Before being assigned to work at PTTEP, she had been working with PTT Public Company Limited (PTT) since 1996 in several positions. During , she served as Executive Vice President, Corporate Finance which was the last position at PTT. While she was working at PTT, she had obtained financial expertise from her career, for instance, from Finance Division of the Petroleum Authority of Thailand, Corporate Funding, and Financial Management Department. Moreover, Ms. Jarikasem had worked in banking sector, both Thailand and International. She joined PTTEP in 2011 and has since served as Executive Vice President, Finance and Accounting Group. She has been a pioneer in introducing new product, hybrid bond, to Thai debt and capital market. In 2012, the company raised approximately $3 billion, the largest equity offering in Thailand. Apart from this, Ms. Jarikasem has reengineered PTTEP s debt structure to be aligned with its functional currency. In addition to her responsibilities at PTTEP, Ms. Jarikasem also assumes a role of Chairman at Energy Complex Company Limited (EnCo), a board member at PTT ICT Solutions Company Limited. 29

31 Bank of Ayudhya Public Company Limited: BAY Bank of Ayudhya Public Company Limited (BAY or Krungsri) is the fifth-largest commercial bank in Thailand, with 67 years of history in the country. The Bank provides a comprehensive range of banking, consumer finance, investment, asset management and other financial products and services to individual consumers, SMEs, and large corporations through its 605 branches and over 17,000 service outlets nationwide. Through its Krungsri subsidiaries, the Group is the largest card issuer in Thailand with 6.1 million of accounts (Credit Cards, Sales Finance/Personal Loans) in its portfolio, a major automobile financing service provider (Krungsri Auto), the fastest growing asset management company (Krungsri Asset Management), and a pioneer in microfinance through CFG Services. Mr. Poonsit Wongthawatchai Senior Vice President and Manager, Investor Relations Department Mr. Poonsit obtained a Bachelor of Science in Business Economics from University of New Hampshire and an MBA from Columbia University. He also received a Master of Philosophy in European Studies from Cambridge University. In 1997, Poonsit began his finance career with the Bank of Thailand, where he worked in both Research and International Departments. During his time at the Central Bank, he was also seconded to the International Monetary Fund (IMF), responsible of monitoring the Thai economy and the proceeding structural adjustment programs. His career in Commercial Banking started with Siam Commercial Bank (SCB) in 2005, where he developed and directed SCB Research Unit. Prior to his current position as Senior Vice President of Investor Relations Department at Bank of Ayudhya, he was a director of International Relations Department of the Stock Exchange of Thailand, where he managed the Exchange s external affairs. He was also a technical advisor to Member of Thailand s National Legislative Assembly between

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