PHUKET: Monthly charts are among the first buy signals I look for when selecting stocks because they show bigger time frames where long term trends can be seen. As we enter the summer months, a short term pull back could still happen and this would be a perfectly normal price action.
Lately we haven’t yet seen any price action to suggest a pullback. For the longer term, we still have to lean toward the upside, assuming that the bullish trend of the previous months will continue.
Looking over several monthly charts for a variety of stocks, we are starting to see more stocks breaking into new highs.
Tech giant Apple (NAS DAQ: AAPL) got caught up in the overall choppy market trading over the past two years. Late last year, AAPL began breaking out to have about five months of solid gains that put shares at an all time high.
Online retail behemoth Amazon.com (NASDAQ: AMZN) recently had another strong monthly close at new all time highs and has steadily closed higher for the past couple of months.
Small cap building materials manufacturer Builders First Source (NASDAQ: BLDR) got clobbered in the wake of the financial crisis and is still not back up to pre-crisis highs. However, its monthly chart is starting to break out from a strong cup and handle base. This should also be considered a bullish sign for other housing related stocks.
Small cap online healthcare marketplace stock Care.com Inc (NYSE: CRCM) had Google Capital take a big position in it several months ago, triggering a big gain as other investors rushed in. The technical chart now shows a nice consolidation since 2014 while in March, shares moved to a two year high on huge volume – a very bullish sign.
Large cap oil and gas stock EOG Resources (NYSE: EOG) is still breaking lower in its monthly charts for the past few months. However, the weekly charts show weeks where shares are ending higher. This is a bullish signal making the stock worth watching to see if its monthly closes can move higher.
Small cap biopharma stock Theravance Biopharma (NASDAQ: TBPH) has broken out from a bullish cup and handle formation to close above the ‘cup’ portion on its technical chart with shares also above its 2014 IPO debut level.
Large cap railroad stock Union Pacific Corporation (NYSE: UNP) had broken out from its post financial crisis consolidation pattern and had a good run from the US$40-110 level before falling off. UNP has just had another big breakout and appears to be heading back up.
Mid cap global life sciences software stock Veeva Systems (NYSE: VEEV) recently hit an all time high on its monthly chart to close above its IPO price after consolidating sideways for around 2.5 years – a fairly bullish sign.
The latest S&P 500 chart also shows the index closing higher for five months in a row (or roughly since the end of the US elections). This has ended roughly two years of consolidation or sideways movement.
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 20 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 freeman firstname.lastname@example.org.
— Don Freeman
Fish sauce excluded from Thailand’s proposed tax on salty foods
PHOTO: Cook’s Illustrated
Thailand’s Excise Department and Public Health Ministry is considering a levy on salty foods in an attempt to tackle the sodium-rich diets of Thai citizens, and the health consequences.
The director general of the Excise Department, Patchara Anuntasilpa says the tax would be calculated based on the amount of salt in a product, with the proposal being sent to Finance Minister Uttama Savanayana by year end.
Fish sauce is a liquid condiment made from fish or krill that have been coated in salt and fermented for up to two years.:234 It is used as a staple seasoning in East Asian cuisine and Southeast Asian cuisine, particularly south east Asia and Taiwan. Following widespread recognition of its ability to impart a savoury umami flavor to dishes, it has been embraced globally by chefs and home cooks.
“If the tax is approved, we will allow entrepreneurs one or two years to reduce the salt content and launch a less-salty version of their product.”
The World Health Organisation and the UN both recommend taxing foods with a high salt content, saying increased sodium intake leads to high blood pressure, cancer and kidney and heart disease.
The Nation reports however, that while the proposal is to levy the tax on frozen and canned foods, along with processed items such as instant noodles, seasoning such as fish sauce and snacks like potato chips would be excluded.
The Federation of Thai Industries has pledged to cooperate with the government’s effort to improve the health of Thailand’s citizens, but its head Wisit Limluecha says he is not in favour of taxing popular seasonings, snacks, frozen or instant foods.
“Research has found that these foods represent only 20% of what we eat each day, and everyone has different eating habits, so the better solution would be to advise consumers on how to eat healthily.”
Wisit warns that the tax may damage the country’s competitiveness in the food sector both overseas and in Thailand, where imported products are easily available. He also voices concern that small businesses will suffer if unable to afford ingredient and packaging changes.
SOURCE: The Nation
500 people own 36% of equity in Thai companies
Roughly 36% of Thailand’s corporate equity is held by just 500 people, highlighting wealth inequality in the Kingdom, according to a study released by the Bank of Thailand’s research institute.
Each of these 500 amass some 3.1 billion baht (102 million USD) per year in company profits, according to the report from the Puey Ungphakorn Institute for Economic Research. In contrast, average yearly household income in Thailand is around 10,000 USD.
A report out this week from the Economic and Business Research Centre for Reform at Thailand’s Rangsit University also pointed to divisive and polarised politics being another root cause of the economic divide.
Thailand’s private sector is dominated by tycoons running sprawling conglomerates. According to the World Bank, the gap between the mega-wealthy and the rest of the Thai population of 69 million is among the many economic challenges for Thailand. According to Bloomberg, the perception of a divide, exacerbated by an economic slowdown, is a major political fault line.
“Magnates arise in Thailand from institutional factors that privilege certain businesses,” said the executive director of PIER, author of the study.
The institute said Thailand needs to promote competitiveness to reduce profits from monopoly power and bolster entrepreneurship to create a more equitable distribution of corporate wealth.
The research is based on analysis of 2017 Commerce Ministry data on the 2.1 million shareholders in Thai firms, and was funded by the University of California San Diego.
SOURCE: Bangkok Post
Thai Airways must modify rehabilitation plan to survive: Airline President
“Thai Airways will have to modify its rehabilitation plans to survive in the face of tight competition.” This frank admission by the airline’s president Sumet Damrongchaith.
The national carrier is now carrying a total debt of over 2.45 billion baht and losses of more than 20 billion, despite being able to reduce its debts by 48 billion baht over the past five years.
Sumet says the first step will be to restructure the airline’s management and finances as well as reconsider its plan to spend 1.5 billion baht on 38 new aircraft. He admits the biggest problem is that Thai Airways has low capital but a high debt-to-equity ratio of eight times.
In order to maintain its competitiveness, the carrier will have to reduce its debts versus assets and boost its working capital with support from the ministries of Transport and Finance. Hence, it plans to borrow approximately 3.2 billion baht in fiscal 2020 in line with the budget limit set by the Office of Public Debt Management.
This loan will be taken to support the airline’s investments as well as for its working capital, to update equipment and maintain existing aircraft, but will not be used to repay old debts.
The Nation also reports that the airline is also concerned about maintaining its liquidity because at the end of June this year, its revolving credit line stood at 13.4% of the total revenue forecast for 2019.
Sumet admits that, though the original rehabilitation plan has a set framework, the situation has now changed due to the appreciation of the baht, so in order to achieve goals, the work method has to be redesigned, such as finding a way to procure more passengers.
“We are now in the process of analysing new markets.”
Meanwhile, Thai Aiways’ board chairman Aek-Niti Nitithan-Praphas says the board is reconsidering plans to procure a new fleet taking into consideration the state of the global and domestic economies as well as the US-China trade war.
“The growth of the tourism industry and the airlines’ financial status needs to be reviewed in line with strong competition and routes that are no longer popular. It’s better to carefully revise the plan instead of exposing the airline to greater risk. The target should be reduce expenses by 20%.”
Meanwhile, Thai Airways aims to boost the sale of tickets, find ways of increasing online shopping of duty-free goods and reducing unnecessary expenses by 10%without affecting the quality of service in the last three months of 2019.
The airline is also negotiating the option of cutting down overtime expenses and is looking into curbing losses incurred by it’s semi-budget offshoot Thai Smile by increasing its flying hours to 10.5 hours daily. These steps are expected to help the airline reach breakeven point in the short term.
The airline is also considering long-term goals such roping in more passengers by offering greater benefits to Royal Orchid Plus members, focusing on digital marketing, retiring non-performing assets as well as increasing revenue from related businesses such as kitchens and aircraft repair centres.
SOURCE: The Nation
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