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

Transcription

1 Thailand s investment opportunities Dr. Pakorn Peetathawatchai Chief Strategy and Finance Officer The Stock Exchange of Thailand 2 March 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 Q3 Q4 Full year 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) 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 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 s border exports with CLMM** countries account for 10% of total exports. Thailand s trade balance with other ASEAN countries Thailand s exports by destination Million USD 6,000 5,000 4,000 3,000 2,000 1, ,000-2,000 Note: *CLMV= Cambodia, Laos, Myanmar and Vietnam **CLMM= Cambodia, Laos, Myanmar and Malaysia (border trade) Source: Bank of Thailand; SET Million USD 60,000 50,000 40,000 30,000 20,000 10,000 0 ASEAN (9) CLMV CLMM China EU (27) Japan US Thailand s exports by destination to total exports % ASEAN (9) CLMV CLMM 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 above average. Forward P/E ratio Unit: times; data as at 31 January 2013 Market Dividend Yield Unit: percent; data as at 31 January 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 11 Robustness and profitability of Thai listed companies Leading Thai listed companies have expanded into other ASEAN countries. Around 40% of SET-50 companies have operations in ASEAN. Examples of Thai listed companies operating in ASEAN countries

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

14 Resilience and performance of SET 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) Transactions by investor type Unit: percent 80 Local institutes Foreign investors SET index Proprietary trading Local retail investors 1, , , , Foreign investors Local retail investors Local institutes Proprietary trading Net buying position in SET Unit: billion baht Local institutes Proprietary trading Foreign investors Local retail investors Source : SETSMART 13

15 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 January 2013) Unit: million USD 2,000 1,800 1,600 1,400 1,200 1, Share turnover velocity* (2008 January 2013) Unit: percent 120% 100% 80% 60% 40% 20% 0% 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 14

16 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 Philippines Thailand Indonesia Malaysia India Singapore Vietnam China Source : SET 15

17 Resilience and performance of 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

18 Thailand s investment opportunities Thailand s economic fundamental Robustness and profitability of Thai listed companies Resilience and performance of SET Trading at SET 17

19 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 18

20 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 19

21 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 Foreign Shares 7.61% 49.62% Local Shares 42.77% NVDRs Source: SET, May 2011-April 2012 Remarks: Trading stocks on local board is applicable. However, to get all benefits, stocks should be transferred to stock-f or stock-r. NVDRs traded on local board, no price different from local stocks.

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

23 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. 22

24 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. 23

25 At Invest ASEAN, Malaysia PTT Global Chemical Public Company Limited (PTTGC) is a Chemical Flagship of PTT Group with the combined chemical / petrochemical capacity of 8.45 million tons per year and crude oil / condensate distillation capacity of 280,000 barrels per day. PTTGC is Thailand s largest gas-based petrochemical producer with an integrated refining business, also steps to be a leading Asia-Pacific company for its size and product diversity. PTTGC s competitive advantage remains in its competitive cost structure with a diversified product portfolio that strives to seek for downstream opportunity and bio-based business in the future. 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. A leading investment company in the power generation business in Thailand. The key strategies and investment target emphasize on electricity generating, renewable energy business and electricity production related business. Has coverage in Lao PDR, Australia and exploring business opportunities in this region. 24

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

27 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

28 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. 27

29 Corporate Participants PTT Global Chemical Public Company Limited : PTTGC Mr. Patiparn Sukorndhaman Corporate Speaker Executive Vice President- Finance and Accounting Mr. Thitipong Jurapornsiridee - Vice President Corporate Finance and Investor Relations Ms. Sinida Pechveerakul - IR Analyst Mr. Suradech Mekmongkolchai - Communication Officer Ms. Prang Chudasring - IR Analyst Ms. Kadewaluk Tanantpapat - Communication Officer Mr. Vasant Srichanwit - Senior Communication Officer Bank of Ayudhya Public Company Limited: BAY Ms. Duangdao Wongpanitkrit Corporate Speaker Chief Finance Officer Mr. Poonsit Wongthawatchai - Senior Vice President and Manager, Investor Relations Department Ms. Nucha Sirirattna - First Assistant Vice President Ratchaburi Electricity Generating Holding Public Company Limited : RATCH Mr. Wutthichai Tankuranand Corporate Speaker Chief Finance Officer Ms. Ananda Muthitacharoen - Head of Investor Relations Department Ms. Tanawan Jaiboonma - Investor Relations Officer 28

30 PTT Global Chemical Public Company Limited:PTTGC PTT Global Chemical Public Company Limited (PTTGC) registered on 19 October 2011, as a Chemical Flagship of PTT Group with the combined chemical / petrochemical capacity of 8.45 million tons per year and crude oil /condensate distillation capacity of 280,000 barrels per day. PTTGC consists of seven business groups which are Group Performance Center Refinery and Shared facilities, Group Performance Center Aromatics, Group Performance Center Olefins, Polymers Business Unit, EO-Based Performance Business Unit, Green Chemical Business Unit, and High Volume Specialties Business Unit. PTTGC becomes the largest integrated petrochemical and petroleum refining company in Thailand, also steps to be a leading Asia-Pacific company for its size and product diversity. Mr. Patiparn Sukorndhaman Executive Vice President, Finance & Accounting After having extended services in several major Energy and Petrochemical firms, Mr. Patiparn Sukorndhaman, currently holds a position of Executive Vice President, Finance and Accounting at PTT Global Chemical Public Company Limited (PTTGC). The Company was formed from the amalgamation of PTT Chemical Public Company Limited (PTTCH) and PTT Aromatics and Refining Public Company Limited. His experience well covers all of financial aspects especially those specialties for the Energy and Petrochemical industries, plus the extensive project financing expertise as illustrated by his several bold achievements such as BLCP s Coal-fired power plant project financing (2003), Best Project Finance Deal of the Year by Asia Money, of US$ 1,200 million, BCP s Financial Restructuring (2004) issuing the awards winning deal BCP Depository Receipt, the Product Quality Improvement project financing (2004) funding of US$ 378 million, and BCP refinancing (2008) total of Baht 28,890 million. 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. Ms. Duangdao Wongpanitkrit, Chief Finance Officer Duangdao Wongpanitkrit was appointed as Chief Financial Officer (CFO) of Bank of Ayudhya (Krungsri) on January 1, She is also a member of Executive Committee. Duangdao earned her Bachelor of Business Administration in Financial Accounting from Thammasart University and an MBA from Chulalongkorn University. She is a Certified Public Accountant (CPA Thailand). After college, Duangdao served as a senior auditor and accounting supervisor with KPMG and Star Petroleum Refining Co., Ltd. for about seven years. She began her commercial banking career in 1997 when she joined GE Capital (Thailand) s Financial Planning & Analysis Department. Four years later, Duangdao progressed to the position of Regional Controller for GE Capital Asia Pacific. Before rejoining GE Capital in 2005, Duangdao spent three years at Standard Chartered Bank (Thailand) in the position of Senior Vice President for Wholesale Banking Business Finance. Duangdao returned to GE Capital in 2005 as CFO for GE Money Retail Bank, where she played an instrumental role in successfully qualifying and establishing GE s first retail bank in Thailand. After GE became a strategic shareholder in Bank of Ayudhya in January 2007, Duangdao spent the next six years as an Executive Vice President (EVP) in the Financial Planning and Analysis Division. During this important growth stage of the bank, her responsibilities included corporate and strategic planning, acquisition and integration support, financial planning, management reporting and capital planning. 30

32 Ratchaburi Electricity Generating Holding Public Company Limited : RATCH Ratchaburi Electricity Generating Holding Public Company Limited, a leading investment company in the power generation business in Thailand, was founded on March 7, 2000 in accordance to the Cabinet's approval on November 30, The key strategies and investment target emphasize on investment and development in three core businesses are electricity generating, renewable energy business and electricity production related business. Apart from Thailand, the Company currently has large scale investment projects in Lao PDR and Australia where there are high potential in power production capacity expansion due to high domestic demand for electricity. RATCH recorded 3Q2012 net profit of 2,003 million baht (increased 63% YoY) Mr. Wutthichai Tankuranand Chief Finance Officer Wutthichai has joined Ratchburi Electricity Generating Holding Company Public Company Limited since the beginning of 2012 as the Group CFO. He has brought in over 20 years of extensive experiences in project and corporate finance which he possessed while he was in commercial banking and telecommunication industries. While he was in banking, he successfully concluded several international-scale project finance syndicates. Later on he was instrumental in finalizing a project finance transaction for a new entrant telecom operator in a very concentrated Thai telecom market. Wutthichai has an electrical engineering degree from Chulalongkorn University and an MBA from University of Michigan (Ann Arbor). 31

33 Disclaimer This document was prepared by The Stock Exchange of Thailand in good faith upon sources believed to be reliable but no representation or warranty expressed or implied is made to their accuracy or correctness. The Stock Exchange of Thailand accepts no liability for any direct or consequential loss or damage arising from any use of this document or its contents. All information and opinion expressed here is subject to change without notice. The copyright belongs to The Stock Exchange of Thailand. No part of this document may be published or copied in any form or by any means without the written permission of The Stock Exchange of Thailand. 32