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Finance: Market pullback nothing to worry about

Legacy Phuket Gazette

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Finance: Market pullback nothing to worry about | The Thaiger

PHUKET: As of late March, US stocks appear to be cooling after strong gains since the US elections. Over the next 1-3 months, I expect further market consolidation with a pullback by major market indices to the 50-day moving averages level being a real possibility.

The Dow Jones could fall below 20,000, while for the S&P 500 index, a 3-5 per cent pullback to a support level at the 2,300 mark would still indicate a healthy market. What I don’t want to see is the S&P falling further than that, as then we may start to see other (more bearish) technical formations start to form on the technical charts. Over on the NASDAQ, tech stocks have been strong performers lately; but I would still not be surprised to see a pullback to the 5,500 level.

The iShares MSCI Thailand Capped ETF has an increasingly healthy chart with multiple bottoming or bullish formations being layered on top of each other. Thailand and its tourism industry has struggled for the last few years with the military takeover and now the passing of the King; but the THD chart shows signs that the country may have finally turned a corner with the ETF ready to break out.

In fact, if we project upwards the difference between the market bottom (around US$55) and recent levels (US$77), the THD could break out to the US$90 level. Keep in mind that such a breakout would only take us back up to 2013 highs before much of the country’s troubles began.

Some US market indices are performing worse than the key market ones. The SPDR KBW Regional Banking ETF had a big run up after the elections and profit takers are now pulling their profits. However, not all regional banks are performing poorly – some individual names are holding on to their gains.

The iShares US Broker-Dealers ETF, SPDR S&P Metals and Mining ETF and the SPDR S&P Biotech ETF have also seen some additional pullback or profit taking.

It’s no fun to go through a pullback; but as long as we don’t see key indices cratering back down to pre-US election levels, there is no need to be overly worried. Investors also need to remember that while a sector index may see pullback or profit taking, not every stock in the index experiences a decline.

Pullbacks or corrections should always be looked at as opportunities to see which stocks in a portfolio are holding up, as weak stocks that do not hold up should be sold while any winning stocks should remain in a portfolio or be reviewed for profit-taking opportunities.

Finally, investors need to keep in mind that corrections will create headlines (especially if the Dow falls below 20,000), but investors need to ignore sensational headlines and focus on price action and long-term trends.

Don Freeman, BSME, is president of Freeman Capital Management, a Registered Investment Adviser with the US Securities Exchange Commission (SEC), based in Phuket. He has over 15 years experience working with expatriates, specializing in portfolio management, US tax preparation, financial planning and UK pension transfers. Don can be reached at 089-970 5795 or email: freeman [email protected]

— Don Freeman



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Strong growth from key markets compensate for slight dip in Chinese tourists

The Thaiger

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Strong growth from key markets compensate for slight dip in Chinese tourists | The Thaiger

by Thanchanok Phobut | Senior Coordinator, Thailand

CBRE, international property consultants, believe that the Thai tourism market is still as resilient as ever.

Earlier this year, the Ministry of Tourism and Sports announced they are expecting more than 40 million tourists to visit Thailand this year, up from the record-breaking 38.3 million last year. According to the latest figures, the first two months of 2019 showed a 2.5% year-on-year growth in international tourist arrivals at 7.3 million, compared to 7.1 million the previous year.

In the first two months of 2019, the total number of Chinese tourist arrivals decreased slightly by 2.2% – 2.17 million in 2018 to 2.12 million this year. Chinese tourist arrivals in February, the month in which the Chinese New Year was celebrated this year, decreased by 12.3% year-on-year.

Other key feeder markets like Malaysia, India, Korea, and Japan showed double-digit growth in the first two months of 2019, with India having the highest growth at 20.1% year-on-year. Even though the combined number of tourists from these four feeder markets was smaller than that of the Chinese market alone, this positive trend could replace any loss of Chinese tourists. The challenge remains for Thailand to win back this biggest feeder market now that the most significant holiday for Chinese people has passed.

Bangkok still attracts tourists from around the world. The number of international tourist arrivals to Bangkok in the first two months of 2019 was 4.68 million, a 3% year-on-year growth. The development of a third runway in Suvarnabhumi International Airport, approved by the government on April 17, will strengthen Bangkok’s capacity to handle larger numbers of tourists in the future.

“In the first quarter of 2019, Rosewood Bangkok, a 159 key luxury hotel next to Phloen Chit BTS station, opened its doors to the public. This was one of Bangkok’s most highly-anticipated luxury hotel openings together with Capella Bangkok and Four Seasons Hotel Bangkok on the Chao Phraya River, both of which will open later this year, underpinning renewed interest in the riverside area and capitalising on recent developments outside of the hotel sector,” comments Mr. Atakawee Choosang, Head of Capital Markets – CBRE Hotels in Thailand.

CBRE believes that Bangkok will continue to be one of the top tourist destinations in the world with new luxury hotel openings, improving infrastructure, and attractions that appeal to a wide range of tourists.

Strong growth from key markets compensate for slight dip in Chinese tourists | News by The Thaiger

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Business

World Bank downgrades Thailand’s 2019 GDP growth to 3.8%

The Thaiger

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World Bank downgrades Thailand’s 2019 GDP growth to 3.8% | The Thaiger

The World Bank is downgrading Thailand’s growth projections to 3.8% from 3.9% for 2019. This compares to last year’s 4.1% GDP. The Bank says that export growth has shrunk to 5.7% from last year’s 5.9%.

The World Bank’s senior economist for Thailand, Mr. Kiatpong Ariyapratya, says that the Word Bank also projects that Thailand’s growth rate for next year would remain at 3.8%. He was citing the East Asia and Pacific Update report,

“Thailand’s export growth projection for this year was adjusted down because of a global economic slowdown as a result of the simmering trade war between the US and China. Growth in tourist arrivals to Thailand this year is also projected to drop slightly.”

Thai PBS reports that, although Thailand’s growth projection is lower than the average 4%-5% rate for the rest of ASEAN, Mr. Kiatpong said that Thailand’s economic growth trend was improving compared to the situation 2-3 years ago, especially investment in the government and private sectors and the private sector’s consumption is picking up, constituting the main engines of economic expansion, expected to grow 4.6% and 4.3% respectively.

He warned that investments by the government sector for the year 2021, as well as government procurement projects and private sector investments, might be affected if formation of the new government is further delayed.

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Transport Ministry and State Railways told to pay HK company 11.9 billion baht

The Thaiger

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Transport Ministry and State Railways told to pay HK company 11.9 billion baht | The Thaiger

The long running issue of Bangkok’s ‘stonehenge’ has been resolved after the Supreme Administrative Court handed down its findings today over the disputed contract of the 60 kilometre link from central Bangkok to Don Mueang Airport.

The Thai Ministry of Transport and the State Railway of Thailand have been dealt a costly blow after the Supreme Administrative Court today overturned the Administrative Court’s verdict and ordered the two state agencies pay almost 11.9 billion baht in compensation to the Hong Kong-based Hopewell Holdings Company for the termination of the Hopewell project – a 60 kilometre elevated highway and rail line from central Bangkok to Don Meuang international airport back in the 90s.

Thai PBS reports that the compensation, plus another 500 million baht in bank guarantees put up by Hopewell Holdings Company, must be paid within 180 days of the verdict from the Supreme Administrative Court.

The Thai court’s verdict will put an end to the long-running legal battle, between the Transport Ministry and the SRT on one side and HK’s Hopewell Holdings on the other.

Hopewell Holding was granted the 30 year concession in 1990 to manage the project, given the nickname of the Thai “Stonehenge”.  The project was riddled with difficulties and widely criticised, resulting in construction being suspended in 1992 and the eventual termination of the contract in 1998, with less than 20% of the work completed.

The dispute over compensation went through an arbitration process under the auspices of the Thai Arbitration Institute which in 2008 ruled in favour of Hopewell Holdings, with both the Transport Ministry and the SRT ordered to pay Hopewell about 12 billion baht in compensation for wrongful termination of the concession.

The two state agencies challenged the arbitration tribunal’s ruling by taking the case to the Administrative Court which in October 2014 overturned the tribunal’s ruling on the grounds that Hopewell’s claim was barred by a time limitation.

Hopewell Holdings then successfully appealed the ruling to the Supreme Administrative Court.

SOURCE: The PBS

Transport Ministry and State Railways told to pay HK company 11.9 billion baht | News by The Thaiger

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