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Finance: Watching elections and electronics

Legacy Phuket Gazette

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PHUKET: October is known for volatility and a stock market pullback just before the US election could still happen.

However, over the past several weeks, I have been seeing defensive stocks weaken and growth stocks start to strengthen. There has also been some movement back into IPOs which could be signs of a speculative bull market forming.

Aside from the overall market and sector index action, I am watching the following leadership stocks as they are looking strong and could continue to move higher.

Alphabet Inc (NASDAQ: GOOGL; GOOG) began consolidating sideways in August and still managed to hit an all time high in September. Apple Inc (NASDAQ: AAPL) is still off of its 2015 highs, but shares have clawed much of the way back up to those levels from the May 2016 lows. In fact, GOOG/GOOGL’s technical charts look similar to the September to October 2015 period when shares ultimately moved higher while AAPL’s 2016 technical chart looks similar to the 2012 to early 2013 technical chart just before shares also began shooting higher.

In early October, large cap travel reservations stock Priceline Group Inc (NASDAQ: PCLN) hit an all time high at the US$1,500 level before pulling back. The stock has a history of hitting new highs and then pulling back before hitting new higher highs. So shares and the price action remain healthy by historical norms. Some of my clients have held shares of Priceline from 2007 to 2014 for a 1,000 per cent gain.

Large cap mobile communications stock T-Mobile US (NASDAQ: TMUS) has a chart similar to PCLN as it also hit an all time high late in the summer before pulling back a bit to consolidate. A look at a longer term technical chart shows this is a normal pattern for the stock as shares did the same thing back in 2014 and 2015.

Chinese e-commerce behemoth Alibaba Group Holding Ltd (NYSE: BABA) has surged in recent months (from US$80 to just below US$110) to reach its nearly all time trading high, while sector or market indices have not made similar moves.

Given such a large move over a short period of time, I would not be surprised if shares pulled back a bit to shake out profit takers or buyers with a weaker risk tolerance, and then consolidate out sideways for the next several months.

Mid cap medical device stock ABIOMED, Inc (NASDAQ: ABMD) saw shares begin to take off in late 2014, more than double in 2015 before consolidating and breaking out higher this summer. The technical chart once again shows signs that shares are taking a rest and as with PCLN and TMUS, this appears to be a perfectly normal pattern for the stock.

Mid cap EMS stock Flex Ltd (NASDAQ: FLEX), formerly known as Flextronics International, is trading at highs not seen in more than a decade. Shares had formed a consolidation pattern after the financial crisis and then flirted with pre-2008 highs last year before finally breaking into a sustained higher level near the end of last summer as more buyers stepped in.

If the whole market were to begin to unravel, we would start to see the above leadership stocks start to break down – something that doesn’t appear to be happening right now. Until then, they need to be given room to grow higher.

Once again, October has a well deserved historical reputation for stock market volatility. I will get more defensive (as in raising cash) if several of these stocks were to reverse their uptrend and break below their September and Brexit lows. Until the price action shows that occurring, we need to remain positioned in stocks regardless of all the bad news or any worries over the presidential elections, terrorist attacks, threatening hurricanes and Fed action or inaction.

Don Freeman, President of Freeman Capital Management, is a fee-only Phuket-based registered investment advisor with the US Securities Exchange Commission (SEC) with over 15 years experience providing personal financial planning and wealth management advice with an emphasis on investing in low-cost ETFs to both working and retired expatriates.

— Don Freeman

 

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

Business

Thailand jumps on the electric bandwagon, aims to become EV production hub

Maya Taylor

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PHOTO: Flickr / JCT 600

The Thai government has ambitious plans to turn the Kingdom into a Southeast Asian hub for the manufacture of electric vehicles. Nikkei Asia reports that big companies in Thailand are preparing to invest substantially in the greener mode of transport, after the National Electric Vehicle Policy Committee suggested a new manufacturing target could mean half of Thailand’s auto-production is made up of electric vehicles by 2030.

The message to car manufacturers and energy suppliers is to grab this opportunity to invest in the necessary infrastructure to support electric vehicles, as the number of drivers using such cars is expected to rise significantly. The Thailand Board of Investment says that between 2017 and 2019, investment in EV production and its infrastructure reached 79 billion baht. That figure is expected to rise at a much quicker rate over the next 3 years.

According to the Nikkei Asia report, Toyota was the first car manufacturer to make EVs in the Kingdom, with Chinese manufacturers becoming more competitive in recent years. The latest Chinese firm to join the EV revolution is Great Wall Motor, which plans to launch electric vehicles this year. The number of EV manufacturers in Thailand is also growing, but Surapong Phaisitpattanapong from the Federation of Thai Industries’ Automotive Industry Club says they still need to overcome serious supply chain challenges. He says manufacturers of the traditional internal combustion engine now find themselves trying to supply parts for electric vehicles, including batteries, motors and converters.

“It’s all about the economy of scale. If the number of EV users goes up substantially, it would be worth investing, and everyone, including auto parts makers, would be ready to switch to producing EV parts, and that would create supply chains that are ready for the development of EVs, but it will take time.”

Surapong points out that the government hasn’t provided enough subsidies to encourage the purchase of electric vehicles, saying there needs to be more of an incentive to deliver the sales boost needed.

“We think there should be a more direct subsidy for EV buyers to promote EVs, but we haven’t seen the government issue any kind of subsidies like that yet.”

SOURCE: Nikkei Asia

 

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Coronavirus (Covid-19)

Pfizer sees 45% increase in net income and revenue, as critics point to disparity in global vaccine availability

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Stock photo via Flickr

After seeing a 45% increase in net income from last year, Pfizer, the pharmaceutical giant, is largely increasing its projected profits for this year. And, the increase is undoubtedly due to the high amount of Covid-19 vaccine sales, in which the company says is shaping up to provide a “durable” revenue stream.

The company says this year’s first quarter profits featured almost 1/4 of sales coming from the Covid vaccines. As it is teaming with German partner BioNTech, the company is set to increase its vaccine production, putting it on track to see US$26 billion in revenues from the vaccine this year. The new number-crunching is an increase from the US$15 million that was projected in February of this year.

But the profits are triggering criticism as governments are feeling pressured to ensure vaccines are available in poorer countries. Chief Executive Albert Bourla, says the company is holding dialogues with “basically all governments of the world,” and it is awaiting approval from the US for 12 to 15 year olds to be able to receive the jab.

The company is also studying the efficacy of giving inoculations, or boosters, every 6 or more months after the second dose- in a move that signals even more profits on the horizon. Bourla says this scenario would allow the company to be both a leader and a financial beneficiary.

“It is our hope that the Pfizer-BioNTech vaccine will continue to have a global impact by helping to get the devastating pandemic under control and helping economies around the world not only open, but stay open.”

But last month, World Health Organisation chief Tedros Adhanom Ghebreyesus, cited a “shocking imbalance in the global distribution of vaccines” and emphasised that the WHO’s Covax programmes must be fortified soon to allow poorer nations to gain access to the inoculations.

Zain Rizvi, a law and policy researcher at progressive Public Citizen advocacy group, says Pfizer’s increase in profits show the need for governments to take action to save lives.

“Pfizer is cashing in on the crisis and hoarding technology, even as billions of people around the world go without a vaccine. Pfizer’s profiteering shows the urgent need for governments to step-in. Governments should require Pfizer to share technology with manufacturers around the world to help ramp up global production.”

Pfizer has defended its vaccine pricing policy, saying it has moderated the cost to encourage broad access through the pandemic phase that could continue into the year 2022. But with a net income increasing by 45%, at US$4.9 billion over the past year and revenues jumping the same percentage to US$14.6 billion, critics point towards the continued disparity of vaccine availability between poor and rich countries. Pfizer’s shares have also increased by .3% to US$39.95.

SOURCE: Bangkok Post

 

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Phuket

What will be the most expensive real estate on MONOPOLY: Phuket Edition?

Tanutam Thawan

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Phromthep Cape… Phuket Old Town… Patong Beach… These are just a few of the landmarks in Phuket that have now been short-listed since it was announced that Phuket will be getting its own edition of MONOPOLY.

The top squares of the the locally-themed game board will soon be handed over to Phuket’s most prominent places. With so much around Phuket that stands out, the public has been asked to help with what the top squares of MONOPOLY: Phuket edition should be.

“Thank you for everyone’s suggestions so far! We have seen so many wonderful ideas come in and we will start to put the game together very soon,” says Jennifer Lau of Winning Moves, the company putting together the Phuket edition of MONOPOLY under official license from MONOPOLY owners Hasbro.

“We’ve had so many suggestions for the most iconic places of Phuket to feature on the top end of the board, that it is difficult to decide what should be there!”

Tell Hasbro what you would like to see featured on the most prominent squares of the game by writing into the Phuket Monopoly Facebook page, or by emailing phuket@winningmoves.co.uk with your suggestions.

Maybe a “Go to jail (but pay 10,000 baht for a quick release)” or the Community Chest could be free for Thais but 500 baht for foreigners. When you land on a property you can be charged rent, but foreigners can’t buy the land. Go for it… 🙂

 

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