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Finance: Profiting from periods of panic

Legacy Phuket Gazette

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THERE is a good lesson in handling panic that can be learned from recent events in Thailand.

The SET index, which is a broad measure of the Thai stock market, went on a pretty wild ride in response to the news regarding the monarchy. If you are not aware of what happened, the chart (right) shows the massive sell-off, only to have the market rebound back to pre-panic levels over the following week.

Now, the market had already made a pretty sharp correction in the beginning of September, and then did the standard 50 per cent retracement before consolidating around the 1,500 level.

When a breakout to the upside failed, the Thai market was primed for a move to the downside already. Thus this panic was not solely related to the news, but technically, we were already lined up for a big move one way or the other.

With the news, of course, the direction became very clear.

What is interesting is that the market has already recovered back to the 1,500 level, at least temporarily. I am not making any predictions here, but in the short term panic is almost never the correct thing to do regardless of whether you are a speculator or an investor.

If you did hold a view that the recent events in Thailand had a negative implication for the future direction of the stock market, you would be able to exit at a much better price than you would have mid-panic.

Now I am not advocating sitting through an entire down market if you think one is coming. My opinion is that if there is one coming, it has nothing to do with events inside Thailand, but rather the entire region of Asia.

Even more specifically, global consumption dropping off could hit China very hard and be a catalyst for a long overdue drop in stock prices throughout Asia.

If you look at the last major crisis in the region, it had quite a long recovery period.

You can see that in the few years before 1997, the Thai stock market traded from 1,200 to 1,400 mostly. If you zoomed in to view the break down, you could have easily gotten out on a rebound somewhere in the 1,000 to 1,200 region without selling mid-panic.

Normally bear markets come hard and fast and then retrace 50 per cent before settling into a new range, as I mentioned above.

Usually leaving any money you don’t intend to spend in the next decade to ride through a cycle is not considered too risky. In this instance it took more than 15 years to get back to levels seen before the crisis.

I am not really trying to make any predictions in this other than to show the long term picture and remind you that when markets move fast, panic is usually the worst thing to do.

Of course looking back over the past 20 years on the above chart, you can see that we are still near the top of the range of where this market has traded.

The SET has not been able to make new highs above where it topped out back in 1994. Imagine buying during the hysteria and 20 years later still being underwater on the position.

Panic can be on the upside as well as when things are crashing. You should never chase a market up either. There will always be another opportunity to buy at reasonable levels.

David Mayes, MBA, resides in Phuket and provides wealth management services to expatriates around the globe, focusing on UK pension transfers. He can be reached at lifeisamazingthailand@gmail.com or 085-335 8573. Faramond UK is regulated by the FCA and provides advice on pensions and taxation.

— David Mayes

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Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

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Business

AOT considering joint venture with Thai Airways to keep services running

Maya Taylor

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AOT considering joint venture with Thai Airways to keep services running | The Thaiger
PHOTO: Wikimedia

The company that runs 6 of Thailand’s airports says it wants to work with Thai Airways to ensure airport services can continue while the national carrier goes through a “rehabilitation” process and struggles with the loss of business caused by the Covid-19 crisis. Airports of Thailand president Nitinai Sirismatthakarn says the AOT board is in talks about a joint venture with the troubled airline to protect operations such as cargo, maintenance, repairs, and ground services at Bangkok’s Suvarnabhumi Airport.

“The running of these three units cannot be disrupted, because that would affect the operations of Suvarnabhumi Airport.”

All Thai Airways flights have been grounded since June, with the ailing national carrier embarking on a rehabilitation process. Nitinai says once that process is complete, AOT is willing to let Thai Airways buy back its shares in airport services. A court hearing on August 17 will determine if the airline’s rehabilitation plan can go ahead without opposition. At that point, both parties can enter joint venture talks.

Nation Thailand reports that Thai Airways owes AOT around 3 billion baht. It’s understood 2 billion of that is owed to technicians at Bangkok’s Don Mueang airport and has been an ongoing source of disagreement between both companies. Nitinai says his priority right now is not the recovery of this debt, but rather ensuring airport services can continue to run smoothly.

One suggestion included in the national airlines’ rehabilitation plan is to separate business units such as mechanics, catering, products and mailing, to invite private investments for each group.

SOURCE: Nation Thailand

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Expats

UK’s Kew Green Hotels launches 7 properties in Bangkok

The Thaiger

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UK’s Kew Green Hotels launches 7 properties in Bangkok | The Thaiger

Despite a quickly changing business environment for the world hospitality industry, some companies are accelerating expansion plans in anticipation of the eventual recovery.

Kew Green Hotels, one of the UK’s leading hotel management companies with over 55 hotels in its portfolio, has now announced plans to expand into the south east Asian market through a joint venture with Siamese Asset. The new entity, Siamese and Kew Green Management Company Thailand, are launching 7 properties in Bangkok, 4 under the Wyndham Hotels & Resorts brand. Alongside the launch of these 7 properties, Kew Green Hotels will also be launching a Commercial Hub for south east Asia to support the region, based in Bangkok.

Siamese and Kew Green Management Company Thailand will launch 4 hotel and branded residences in the heart of Bangkok next year…

The Wyndham Queen Convention Centre, Wyndham Garden Sukhumvit 42, Ramada Plaza by Wyndham Sukhumvit 48 and Ramada by Wyndham Sukhumvit 87, with an additional three properties in the pipeline. Guests staying at each of the Wyndham Hotels & Resorts will have access to Wyndham Rewards, the global hotel loyalty rewards program.

Kew Green Hotels set themselves apart by “combining years of experience with innovative ideas to deliver outstanding hotel services and by delivering exceptional returns for hotel owners. Combining market-leading technology with expert talent, the Commercial Hub will integrate proactive and reactive sales, marketing, analytics and revenue management, to support their increasing hotel portfolio in the region, providing a consolidated approach to deliver growth”.

Chris Dexter, CEO of Kew Green Hotels, says they look forward to delivering “world-renowned Thai hospitality in these seven properties, supported by our state-of-the-art commercial hub”.

“As a growing company, this milestone reflects Kew Green Hotels’ broadening expertise in the international hotel market and reputation for operational excellence, strong commercial awareness and industry leading profit delivery.”

The Wyndham Queen Convention Centre Hotel & Residences, with 120 rooms and suites, is conveniently located just 50m from Queen Sirikit National Convention Centre MRT station, yet close to the greenery of Benjakitti and Lumpini parks. The hotel and residences offer panoramic views of the city, the bustling Port of Bangkok and outstanding surroundings. Amenities include rooftop gardens, a sky lounge, infinity pool, restaurant, executive lounge and an expansive fitness room, all with spectacular panoramic cityscape views. The hotel is just five minutes from contemporary shopping centres within the vibrant Central Business District of Bangkok.

Wyndham Garden Sukhumvit 42 sits in the heart of Ekkamai, known for its lively collection of popular cafés, bars and restaurants and just 300m from Ekkamai BTS station and five minutes from the Ramindra-Art-Narong Expressway. The hotel offers 120 rooms with city views, a roof-top garden, a restaurant, a Kafeology coffee bar on the terrace, swimming pool, spa and gym.

Ramada Plaza by Wyndham Sukhumvit 48 offers 100 rooms together with a sky bar, restaurant, bar lounge and spa with far reaching views across the city plus a swimming pool and gardens. The hotel is less than 10 minutes’ walk from Phra Khanong BTS station with easy connectivity to world-class shopping, dining and nightlife.

Ramada by Wyndham Sukhumvit 87 is located between BTS Bang Chak and BTS Onnut at 430m and 550m respectively, with convenient access to shopping malls and entertainment in the Ekkamai area. With 85 rooms, the hotel offers a dedicated yoga room and roof-top gardens, a swimming pool, garden and Kafeology coffee bar.

UK’s Kew Green Hotels launches 7 properties in Bangkok | News by The Thaiger

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Coronavirus (Covid-19)

Thailand producing over 4 million face masks a day

Maya Taylor

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Thailand producing over 4 million face masks a day | The Thaiger
PHOTO: Mika Baumeister on Unsplash

An increase in production facilities means Thailand is now producing 4.2 million face masks a day, leading to a growing surplus. A report in Nation Thailand says Internal Trade Director Vichai Pochanakit says producers in China are once again exporting the raw materials needed for mask production.

The Thai government is now looking at ways to manage a daily surplus of more than 1 million face masks. It currently purchases 3 million masks a day from 16 factories. Of these, the Public Health Ministry takes 1.8 million and is now understood to have amassed more than a month’s supply. The Interior Ministry gets 1.2 million masks a day, with officials now in talks to distribute extra masks to organisations that may need them, such as airlines.

Officials have also decided to extend Thailand’s ban on the export of masks until at least February 2021. An exception is being made for certain categories of masks, including those produced under Board of Investment tax incentives specifically for the export market, those that filter out chemical particles, and masks exported to embassies in foreign countries.

SOURCE: Nation Thailand

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