Phatra Wealth Daily 20141211 Rc

8/10/2019 Phatra Wealth Daily 20141211 Rc

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Private Wealth Management Research11 December 2014

Issued by Phatra Securities Public Company Limited ("Phatra"). Phatra does and seeks to do business with companies covered or mentioned in its

research reports. As a result, investors should be aware that Phatra may have a conflict of interest that could affect the objectivity of this report.

Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 12.

A member of the Kiatnakin Phatra Financial Group

Phatra Wealth Daily NoteGlobal Markets: Stock market selloff on lower oil

demand forecast; Brent fell below $65; China

selloff on Tuesday

n

US stocks lost more than 1% on Wednesday as another big

drop in oil prices hammered energy shares after OPEC cut its

forecast on 2015 demand for crude.

n

Brent crude fell below $65 for the first time since 2009.

n

Chinas stocks, currency and corporate bonds suffered their

largest tumbles in years Tuesday after Beijing took fresh

steps to rein in growing risks in the countrys debt-laden

financial system.

Local Markets: Minimum wage to stay put,

Minister defends less-steep retail oil price cuts,

Airports predict surge in traffic

n

The tripartite Wage Committee has resolved to maintain the

daily minimum wage nationwide at Bt300.

n

The Energy Minister has defended the decision not to cut

retail oil prices in Thailand at the same pace as global crude

prices.

n

AoT sees a strong rebound in passenger traffic through its

airports in the year to September 2015, due mainly to the

improved tourism outlook.

n

Local Market Wrap:SET 1,559.56 -15.99pts -1.01% Value

US$1,679mn. The market was weak from the outset, in part

on follow-through selling from Monday afternoon but more

importantly Energy-3.97% continued to be sold off with

bargain hunters getting overtaken early on.

Investment Ideas

n

Airlines Lower fuel prices cause us to lift sectors 2015

core earnings forecast by 34% and our price objectives by

39% on average. We upgrade NOK (Buy/12-month PO Bt20)

and AAV (Buy/12-month PO Bt5.60) to Buy from

Underperform but reiterate Underperform on THAI

(Underperform/12-month PO Bt11) given 70% hedging and

headwinds from JPY & EUR weakness. NOK is our top pick

given negligible hedging, tailwinds from weakening JPY/THB

and undemanding valuations.

Phatra Macro Research Team &

Phatra PWM Research Analysts

Pipat Luengnaruemitchai

[email protected]

Porntip Tantasuwan

[email protected]

Flemming Clausen

[email protected]

Taweesak Paopanlop

[email protected]

KeyGlobal Index Last %Chg %YTD

US Dow Jones 17,533.2 -1.5% 5.8%

US S&P 500 2,026.1 -1.6% 9.6%US Nasdaq 4,684.0 -1.7% 12.1%

UK FTSE 100 6,500.0 -0.5% -3.7%

EU STOXX600 115.6 -0.4% 3.1%

JP Nikkei 17,412.6 -2.2% 6.9%

HK Hang Seng 23,524.5 0.2% 0.9%

MSCI ACWI 414.8 -1.3% 1.5%

MSCI WORLD 1,698.4 -1.4% 2.2%

MSCI Europe 115.6 -0.4% 3.1%

MSCI EM 958.7 -0.7% -4.4%

MSCI AsiaPac ex Japan 466.2 -0.3% -0.4%

SET Index

Last %Chg %YTD

SET Index 1,559.6 -1.0% 20.1%SET100 Index 2,304.9 -1.3% 19.2%

SET50 Index 1,041.0 -1.4% 17.8%

Cumulative Net Buy

Last 1M YTD

Foreigners (3,544) 5,675 (10,549)

Local institutions 1,190 2,035 55,006

Retail investors 3,593 (10,064) (60,627)

Proprietary (1,239) 2,354 16,170

Exchange Rate

Last %Chg %YTD

EURUSD 1.2448 0.6% -9.4%

USDJPY 117.82 -1.6% 11.9%

USDCNY 6.1755 -0.2% 2.0%USDTHB 32.77 -0.2% 0.2%

Commodities

Last %Chg %YTD

WTI (USD/bl) 60.9 -4.5% -38.1%

Brent (USD/bl) 64.2 -3.9% -39.3%

Gold (USD/tr oz) 1,226.3 -0.4% 2.1%
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Private Wealth Management Research

11 December 2014

2


Global Market Highlights

Stocks down as energy falls further (Reuters,

CNBC)

US stocks lost more than 1% on Wednesday as another bigdrop in oil prices hammered energy shares after OPEC cut its

forecast on 2015 demand for crude. The Dow fell 1.5%,

S&P500 fell 1.6%. Falling oil prices have added to worries

about global demand and raised concerns about earnings for

energy companies,with year-end tax selling putting additional

pressure on the group. The S&P energy sector is now down

14.7% for 2014.

European shares closed largely lower, continuing a declining

trend as Greek political fears and slumping oil prices weigh.

The pan-European Euro Stoxx 600 index fell 0.3%, with the

U.K.'s FTSE 100 index and the French CAC closing down 0.4%

and 0.8%.

Yield on 10-year US Treasury note fell 4bps to 2.16% after a

strong debt auction.

Asian stocks dropped, led by Japanese shares, and the dollar

weakened after oils collapse triggered the biggest loss for

U.S. stocks since October.

Oil Plunge Rips Through Markets as Investors

Seek Bottom (Bloomberg)

Oils collapse is rippling through financial markets, broadening

a selloff in stocks beyond energy companies and leaving

investors with few havens as assets from metals to corporate

debt sink. Brent crude fell below $65 for the first time since2009 as OPEC cut its forecast for 2015 demand, raising

concern over the strength of the global economy and leaving

investors contemplating when oils plunge will reach a bottom.

The selloff sent the MSCI All-Country World Index to its

biggest drop in two months. Traders are almost certain that

Venezuela will teeter into default as bonds plunge to a 16-

year low and the cost of default protection soars to a record.

A measure of risk in the U.S. junk-bond market rose the most

in two months. Copper fell 1.2% and gold slipped 0.2%.

Investors sought relief in Treasuries as 30-year bond yields

fell to a seven-week low, and the yen capped its biggest

three-day gain versus the dollar in more than a year.

OPEC lowered its projection for 2015 demand for crude by

300,000bbl/day to 28.9mn/day, the lowest level in 12 years

on surging U.S. shale supplies and lower demand estimates

amid signs of a slowing growth in economies from China to

Europe. That's about 1.15mn a day less than the group's

pumped last month, and the 30mn bbl target.

Saudi: Why should we cut production? Why?

(Reuters, Bloomberg)

Asked whether he thought it would be necessary to reduce oil

production prior to OPEC's next scheduled meeting in June,

Saudi Oil Minister Naimi responded: "Why should we cutproduction? Why?". Naimi reiterated that the market must be

left to balance itself, a shift from longstanding Saudi policy of

acting as a swing supplier. Oil prices fell more than $10 since

the 27 Nov OPEC meeting.

Naimi said Saudi produced 9.6-9.7mn bpd in Nov. "That is not

going to change unless other customers come and say they

want more oil," he said. US crude inventories rose to the

highest level since started in 1982. Energy shares in S&P 500

fell 3.3%.

Crude prices now are below what 10 out of OPECs 12

members need for their annual budgets to break even. North

American High Yield Index, a CDS benchmark, rose 14.9bps to

371bps.

China Stocks, Currency and Corporate Bonds

Fall (WSJ)

Chinas stocks, currency and corporate bonds suffered their

largest tumbles in years Tuesday after Beijing took fresh steps

to rein in growing risks in the countrys debt-laden financial

system. The selloff started in the bond market, as traders

rushed to sell and raise cash after a regulator banned

investors from using low-grade corporate debt as collateral to

borrow cash. The Shanghai index slumped 5.4% to record its

biggest fall since 2009.

The Tuesday selloff was triggered when Chinas securities

clearing house said late Monday it raised the threshold for

corporate bonds qualifying as collateral for repurchase

agreements, or repos, which are short-term loans with

maturity spanning from overnight to 182 days. These are

used as a key channel of short-term funding for bond

investors. The new rule also applies to bonds issued by local

govt financing vehicles that arent explicitly covered by local

authorities budgets.

The combined outstanding value of repos on the countrys two

exchanges has surpassed 700bn yuan (US$113.47bn).

According to estimates from Shenyin Wanguo Securities, the

total value of corporate bonds disqualified as repo collateral

under the new rule exceeds 1.25trn yuan, or 60% of all

outstanding corporate bonds listed on Chinas two stock

exchanges.

The move to cut down on the use of this risky debt is central

to Beijings structural reforms aimed at sustaining economic

growth over the long term by reducing reliance on state

investment and exports and increasing the role of

consumption. That policy shift, though, could hold back

expansion in the short term if it chokes off credit to industries

such as steel and cement, where problems with overcapacity

are widespread.


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11 December 2014

3


Budget Deficit in U.S. Narrows as Employment

Growth Accelerates (Bloomberg)

The budget deficit in the U.S narrowed more than economists

projected in November from a year earlier, Treasury

Department figures showed, as rising employment helpedboost receipts and spending fell.

Outlays exceeded receipts by $56.8 billion last month,

compared with a $135.2 billion shortfall a year earlier, the

department said in a report released in Washington. The

median estimate in a Bloomberg survey of 21 economists was

for a $64 billion deficit.

Stronger hiring has helped to shrink the countrys annual

deficit from a record $1.42 trillion in 2009, and economists

expect the decline to continue in the fiscal year that startedOct. 1. The Treasury in October said the shortfall in the 12

months ended Sept. 30 was $483 billion, or 2.8 percent of

gross domestic product, and the Congressional Budget Office

said in August that it expects the deficit to shrink to 2.6

percent of GDP this fiscal year.


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11 December 2014

4


Market Wrap

SET 1,559.56 -15.99pts -1.01% Value US$1,679mn

Net Buy/Sell Frgn-US$107mn Inst+US$36mn Prop-

US$38mn Ret+US$109mn

The market was weak from the outset, in part on follow-

through selling from Monday afternoon but more

importantly Energy-3.97% continued to be sold off with

bargain hunters getting overtaken early on.

The sector was the most active and accounted for the

majority of the fall of the index.

PTT-6%, PTTEP-3.94%, PTTGC-3.88% alone accounted for -10

points of the -16 points lost on Tuesday.

Nothing new, but the lower oil goes the bigger the

inventory loss and potential losses on impairments.

In a repeat of Monday, the market sold off over the last 30minutes led down by futures.

Banks+0.07% managed to stay in the positive, but

Telecoms-0.49% gave up gains and Property-0.52% and

Construction Materials-0.84% which were softer during the

day took a hit into the close.

Contractors+0.64% got a late boost in the afternoon after

the government announced the award of four contracts

worth Bt28.5bn or US$864mn for the extension of the Dark

Green mass transit line.

The Cabinet passed new stimulus measures but they are

seen as modest policies at best and had no impact on the

market.

Chart: SET Intraday movement

1,540

1,550

1,560

1,570

1,580

10:00

10:30

11:00

11:30

12:00

13:59

14:29

14:59

15:29

15:59

16:29

1556.5

Day Low

Previous Close

1575.551576.11

Day High

Close

1559.56

Source: Bloomberg

Top Gainers Last %Chg %YTD

RS 17.30 +4.2% +143.7%

ITD 7.80 +3.3% +101.0%

UV 9.85 +2.6% +42.8%

GUNKUL 30.00 +2.6% +240.9%

EGCO 167.00 +2.1% +36.3%

Top Losers Last %Chg %YTD

PSL 15.40 -7.8% -27.7%

PTT 345.00 -6.0% +20.6%

BH 142.50 -5.0% +62.4%

ROBINS 44.00 -4.9% -8.3%

SPCG 26.25 -4.5% +38.2%

Most Active Last %Chg %YTD

PTT 345.00 -6.0% +20.6%TRUE 12.70 +1.6% +91.6%

PTTGC 55.75 -3.9% -29.4%

ADVANC 245.00 -2.0% +22.8%

KBANK 242.00 +1.3% +55.1%

Sectoral performance Last %Chg %YTD

SET Index 1,559.6 -1.0% 20.1%

SET Energy & Utilities 19,795.7 -3.8% 3.4%

SET Banks 618.5 0.1% 35.4%

SET ICT 234.6 -0.5% 23.0%

SET Commerce 29,170.0 -0.7% 10.7%

SET Food & Bev 12,380.4 -0.7% 13.3%

SET Property 308.1 -0.5% 31.7%

SET Constr Mat 12,222.1 -0.8% 21.1%

SET Petrochem 801.8 -2.6% -18.5%

SET Health Care 4,242.9 -1.5% 54.7%

SET Transportation 229.3 -0.4% 41.6%

SET Property Fund 156.7 -0.5% -0.2%


5/13


11 December 2014

5


Todays news

Economy: Wage committee maintains Bt300

rate (Nation)

The tripartite Wage Committee has resolved to maintain thedaily minimum wage nationwide at Bt300, Permanent

Secretary for Labour Ministry Nakhon Silapa-archa, the

chairman of the panel, said Wednesday. He said the Bt300

rate will remain enforced throughout next year because the

Wage Committee has analyzed the information and found that

the living cost has not increased.

Politics: Academics push for intellectual

freedom (Nation)

201 academics from universities across the country called on

the Council of University Presidents of Thailand (CUPT) to

ensure and protect intellectual freedom that they said wasbeing threatened under current military rule. They submitted

an open letter stating that students and university lecturers

had witnessed unprecedented threats to their academic

freedom even as the country is undertaking reforms which

needed freedom of expression in order to succeed.

Economy: Officials to meet on Dawei's initial

phase (Bangkok Post)

Officials from Myanmar and Thailand will meet next month to

approve the framework of the initial phase of the delayed

Dawei development project. Arkhom Termpitayapaisith,

secretary-general of the National Economic and SocialDevelopment Board, said the two countries had already set up

policy committees to oversee the scheme. Deputy Prime

Minister MR Pridiyathorn Devakula will chair the Thai

committee, which is scheduled to meet its Myanmar

counterparts in Bangkok from Jan 7-9. The development

project in Dawei, a Myanmar city situated 350 kilometres

west of Bangkok, features a number of megaproject

investments including deep-sea ports and a special economic

zone (SEZ). In October, the Thai and Myanmar governments

agreed to revitalise the project by letting Thai firms play a

bigger role in the much-delayed SEZ when Prime Minister

Prayut Chan-o-cha paid an official visit to the country.

Economy: Narongchai defends small price cuts

at the petrol pumps (Bangkok Post)

Energy Minister Narongchai Akrasanee has defended the

decision not to cut retail oil prices in Thailand at the same

pace as the decrease in global crude prices. "We have

essentially maintained the levy collection for the state Oil

Fund from some types of fuels because the fund remains in

need of funding to be used for price interventions when oil

prices fluctuate," he said. The Oil Fund has a duty to subsidise

biofuels such as gasohol and biodiesel to promote the use of

alternative fuels in serving the government's policy to cut

reliance on imported crude oil. Global oil prices had fallen by

40% to US$66 a barrel yesterday from about $105 five

months ago, but retail oil prices in Thailand decreased by only

18% over the period. Mr Narongchai said the problem

stemmed from long-time subsidies of liquefied petroleum gas

(LPG), compressed natural gas (CNG) and diesel that caused

distortions to supply and demand. "Some motorists enjoyed

prices cheaper than the actual fuel cost for a very long time at

the expense of others. Now they still pay gas bills cheaper

than before but they cannot be as low as the actual cost

because we won't let anyone pay energy costs for you

through cross-subsidies," he said.

Petrochem: IVL upbeat about 2015 margins

(Bangkok Post)

Aloke Lohia, chief executive of SET-listed Indorama Ventures

Plc (IVL), one of the world's largest integrated polyester

product makers, says the company is sustainable thanks to its

strong principles, as polymers is a cyclical business. The

company decided to go global early on since it needed to

ramp up output. In 2003 IVL expanded to North America and

in 2006 to Europe. "In terms of finance we try to plan for

three years in advance with conservative projections to

ensure sufficient liquidity," Mr Lohia said at the Forbes Asia

forum. He said advance planning ensured a strong balance

sheet even when IVL wanted to acquire new assets. "As adownstream chemical company, we have the advantage of a

lower oil price. Our margins are getting better, so we're

optimistic about 2015," Mr Lohia said.

Aviation: Airports predict surge in traffic

(Bangkok Post)

Airports of Thailand Plc (AoT) sees a strong rebound in

passenger traffic through its airports in the year to September

2015, due mainly to the improved tourism outlook. The state-

controlled company, which operates six airports including

Bangkok's Suvarnabhumi, projects a 12% jump in combined

passenger throughput during October 2014 to September

2015 to reach 98.1 million, up from 87.6 million. That will be

a sharp rise from the marginal 1.67% growth seen in the last

fiscal year, caused by the country's political turmoil in the

first half of 2014. Poolsiri Virojanapa, senior executive vice-

president for accounting and finance at AoT, singled out post-

coup political stability for restoring passenger traffic growth

to the previous annual double-digit level.


6/13


11 December 2014

6


Stock Comments

Airlines NOK is most levered, but most lagged

airline stock to oil dive

NOK TB is now our top pick among Thai airlines

An over 30% drop in oil price over the last three months,

different hedging profiles and FX exposures have created

investment opportunities in Thai airline stocks and we have

lifted the sectors 2015 earnings by 34% and raised our price

objectives by 39% on average. We upgrade Nok Airlines (NOK)

and Asia Aviation (AAV) to Buy from Underperform. NOK (Bt20

PO) is the most leveraged Thai airline and our top pick given its

negligible hedging, tailwinds from weakening JPYTHB to support

NokScoot launch and an undemanding valuation of 7x 2015E

PER.

Oil price should remain depressed for some time

The decision by OPEC to withdraw from its role as the swing

producer of oil and let the market set the price is likely to result

in an extended period of low fuel prices. Our jet fuel price

assumptions are lowered from $120 per barrel for 2015/16 to

$85/90 in line with the Brent forward curve, plus a $10 crack

spread.

Selective bright spots on short-haul as hedgings are unequal

Airlines with the lightest hedging profile will benefit most. NOK

is the least-hedged at only 5% for 2015 followed by 7.5% for

AAV, versus 60% for Bangkok Airways and 70% for THAI.

Despite our concerns over a short-haul capacity glut, NOK and

AAVs limited hedging will give them significant cost advantages

to further explore down the demand curve, attract volume and

drive their earnings turnaround in 2015.

Weakening JPYTHB swings in favor of NOK, bad for THAI

NokScoot is in a very strong position to launch flights to North

Asia, in our view. In addition to its cost advantage derived from

a zero hedging profile, the falling JPYTHB (-12% in three

months) is a major tailwind as it expects Thailands outbound

sales to account for 70-80% of passengers. Conversely, THAIs

most profitable market (Japanese routes) generates 70% of

revenue in JPY. Together with a weakening EURTHB, we expect

THAIs yield to come under pressure even before taking the

endless growth of LCCs and Middle Eastern airlines into account.

Rating, POs and earnings upgraded for NOK and AAV

We upgrade NOK to Buy from Underperform and increase our

PO to Bt20 from Bt12.7 having increased core EPS by 60-90%

over 2015-16. We upgrade AAV to Buy from Underperform and

increase PO to Bt5.6 from Bt3.8 having lifted 2015-16 core EPSby 25-44%. We believe NOK has greater upside than AAV given

its discounted valuation, direct benefit from weakening JPYTHB

and beaten-up price performance since IPO. We reiterate our

Underperform rating on THAI with Bt11 PO (up from Bt9.8,

largely on higher book value from larger-than-expected FX

gains). Its high hedging profile is widening cost disadvantage

while the weakening JPYTHB and EURTHB will further pressure

its pricing and keep restructuring hopes at bay.

IVL - Back on the HVA expansion road (Buy/12-

month PO Bt27.40)

Fourth acquisition for IVL this year as it acquires PF Asia

As part of IVLs continued strategy to enhance its presence in

high-value-added (HVA) segments, IVL has announced it will

acquire Performance Fibers Asia (PF Asia) from an affiliate of

Sun Capital Partners, Inc. The transaction is to include all its

Asian manufacturing operations and the right to continue using

the name Performance Fibers. This is IVLs fourth acquisition

following its purchase of PHP Fibers (Filament yarns), SASA

(Polyester & PET) and Artenius (PET) earlier this year. IVL

expects to complete the deal within 1Q15.

Growing HVA auto applications

PF Asia produces premium polyester tire cord fabric (TCF) which

is used as reinforcing materials for automotive tires. Located in

China, PF Asia possesses an annual capacity of 41,000 tons of

polyester TCF and 48,000 tons of polyester tire cord yarn with

a 17% market share in China and 8% share of Asia capacity. The

company is the second-largest producer in China and the third-

largest in Asia.

Debt financing with reasonable pricing

The investment is estimated at US$200mn, translating into an

EV/EBITDA of 6x. The valuation is in line with IVLs investment

guideline of 5-7x of EV/EBITDA. IVL issued perpetual

debentures worth Bt15bn in October 2014 to finance all

potential acquisitions, lowering its net D/E to 0.8x (after the

debenture issuance). With an attractive EBITDA margin of 16%,

we expect PF Asia to add around US$23mn of EBITDA in 2015

(assuming the deal will be consummated by end-1Q15). We also

estimate that its NPAT will be boosted by US$9mn or 4% of our

2015E NPAT forecast following the acquisition. We see the

acquisition in a positive light.


7/13


11 December 2014

7


Market Summary

Global IndicesLast 1D 1W

% Change

1M 3M YTD 1Y

Dow Jones 17,533.2 -1.5% -2.1% -0.5% 2.8% 5.8% 9.8%

S&P 500 2,026.1 -1.6% -2.3% -0.6% 1.4% 9.6% 12.4%

Nasdaq 4,684.0 -1.7% -1.9% 0.7% 2.0% 12.1% 15.4%

FTSE 100 6,500.0 -0.5% -3.2% -1.7% -4.4% -3.7% -0.4%

STOXX600 115.6 -0.4% -3.0% 0.3% -1.8% 3.1% 7.5%

Nikkei 17,412.6 -2.2% -1.7% 3.8% 9.4% 6.9% 11.5%

Hang Seng 23,524.5 0.2% 0.4% -0.9% -4.6% 0.9% -0.9%

MSCI ACWI 414.8 -1.3% -2.4% -1.3% -3.1% 1.5% 4.0%

MSCI World 1,698.4 -1.4% -2.4% -0.9% -2.2% 2.2% 5.2%

MSCI Europe 115.6 -0.4% -3.0% 0.3% -1.8% 3.1% 7.5%

MSCI EM 958.7 -0.7% -2.8% -3.9% -10.4% -4.4% -5.3%

MSCI AsiaPac ex Japan 466.2 -0.3% -1.0% -3.0% -7.2% -0.4% -0.7%

SET Last 1D 1W 1M 3M YTD 1Y

SET Index 1,559.6 -1.0% -2.2% -0.5% -1.3% 20.1% 14.1%

SET100 Index 2,304.9 -1.3% -2.6% -0.1% -1.5% 19.2% 12.5%

SET50 Index 1,041.0 -1.4% -2.6% -0.2% -1.4% 17.8% 11.4%

SET Energy & Utilities 19,795.7 -3.8% -5.1% -8.7% -8.7% 3.4% -0.7%

SET Banks 618.5 0.1% -1.1% 1.2% -0.5% 35.4% 24.3%

SET ICT 234.6 -0.5% 0.5% 5.7% 6.8% 23.0% 12.1%

SET Commerce 29,170.0 -0.7% -3.1% -0.3% -6.3% 10.7% 6.6%

SET Food & Beverages 12,380.4 -0.7% -1.2% 2.4% -0.6% 13.3% 17.4%

SET Property 308.1 -0.5% -3.2% -3.1% -1.0% 31.7% 21.4%

SET Constr Mat 12,222.1 -0.8% -1.3% 3.6% 2.8% 21.1% 17.4%

SET Petrochem 801.8 -2.6% -7.9% -8.4% -13.2% -18.5% -21.0%

SET Health Care 4,242.9 -1.5% -2.4% -0.6% -1.1% 54.7% 45.6%

SET Transportation 229.3 -0.4% -1.1% 8.6% 6.3% 41.6% 29.4%

SET Property Fund 156.7 -0.5% -1.1% -2.0% -3.1% -0.2% 0.0%

Currency Last 1D 1W 1M 3M YTD 1Y

EURUSD 1.2448 0.6% 1.1% 0.2% -3.7% -9.4% -9.5%

USDJPY 117.82 -1.6% -1.6% 2.6% 10.0% 11.9% 14.6%

USDCNY 6.1755 -0.2% 0.4% 0.9% 0.7% 2.0% 1.7%USDTHB 32.77 -0.2% -0.3% -0.2% 1.8% 0.2% 2.2%

Commodities

Last 1D 1W 1M 3M YTD 1Y

WTI (USD/bl) 60.94 -4.5% -9.6% -21.3% -34.4% -38.1% -38.1%

Brent (USD/bl) 64.24 -3.9% -8.1% -22.6% -35.9% -39.3% -39.2%

Gold (USD/tr oz) 1,226.31 -0.4% 1.4% 6.5% -1.2% 2.1% -2.8%

Treasury Yield

Change in bps

Last 1D 1W 1M 3M YTD 1Y

US 2Y Yield 0.57 -4 +1 +3 +1 +19 +27

US 5Y Yield 1.56 -6 -4 -8 -23 -18 +11

US 10Y Yield 2.16 -5 -12 -20 -39 -86 -64

TH 2Y Yield 2.05 +0 +1 -14 -36 -57 -61

TH 5Y Yield 2.45 -1 +3 -13 -61 -96 -107

TH 10Y Yield 2.89 -2 -2 -20 -68 -109 -117

Cumulative Net Buy (THBmn)

1D 1W 1M 3M YTD 1Y

Foreigners (3,544) (2,995) 5,675 5,808 (9,954) (31,664)Local institutions 1,190 2,885 2,035 17,560 50,397 59,327

Retail investors 3,593 2,692 (10,064) (25,941) (53,981) (37,658)

Proprietary (1,239) (2,583) 2,354 2,573 13,538 9,996

Cumulative Foreign Flows (US$mn)

1D 1W 1M 3M YTD 1Y

Thailand (108) (91) 173 178 (282) (957)

Indonesia (4) (133) 311 (620) 4,262 3,915

Korea (99) 484 2,466 (764) 8,311 7,397

Taiwan (352) (359) 1,669 107 13,663 14,714

Philippines 6 (139) 481 (64) 1,246 1,130


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Dec 2014

Monday Tuesday Wednesday Thursday Friday

1 2 3 4 5

WHAPF XD Bt0.181

8 9 10 11 12

CITY

XD Bt0.16 M-AAA XD Bt0.193

IRC XD Bt0.6269 NPP XR 3:1

TPOLY

XB 10:1 @Bt1.0

15 16 17 18 19

AOT XD Bt3.40

22 23 24 25 26

29 30 31

Source: SET


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Daily bond reports

Thai govt bond yields

Tenor(Years) Thai Govt Bond Change (bps) Swap (MID) Change (bps) Bond Swap (bps)

1Y 1.99 0.00 1.835 -1.80 -15.502Y 2.05 0.00 1.915 -3.80 -13.50

3Y 2.21 -1.00 2.045 -4.30 -16.50

4Y 2.38 0.00 2.165 -5.50 -21.50

5Y 2.45 -1.00 2.280 -5.30 -17.00

6Y 2.61 -1.00 2.390 1.20 -22.00

7Y 2.65 -2.00 2.505 -3.50 -14.50

8Y 2.73 -2.00 2.590 2.50 -14.00

9Y 2.84 -2.00 2.680 4.00 -16.00

10Y 2.89 -2.00 2.760 -3.50 -13.00

Active Govt. Bond Tenor Yield Change (bps) Index %

LB15DA 1.01 1.951 0.00 6MTHBFIX 1.7804

LB176A 2.52 2.094 0.00 6MFDR 2.00

LB196A 4.51 2.371 0.00 MLR 6.75

LB21DA 7.03 2.653 0.00 BIBOR 2.28

LB236A 8.52 2.773 0.00Source: Bloomberg

Comments

-US Treasury yields collapsed on the uncertainty in Greece, Chinas credit tightening & oil price fall. 10Y US Treasuries lowered 15bps

to be at 2.15% now.

-The total trading value increased by 8%. THB bonds went down a few bps as we still expect buying flows with interest from onshore

& offshore.

-USDTHB is heading south having USDJPY led the FX market. USDTHB is now at 32.77 after being traded in the region of 33.00

during the past few days.

Calendar of Government Debt Securities Action in December 2014

Mon 8 Tue 9 Wed 10 Thu 11 Fri 12 Total

CB15312B - 25,000

CB15611A - 25,000

TB15107A - 15,000

TB15610A - 10,000

LB296A - 9,000 BOT168A - 30,000 114,000

Source : www.ibond.thaibma.or.th

Total Trading Value 831,769.76mn

Buy Sell Net

Asset Mgnt. Companies* 11,673.80 11,802.21 -128.41

Non-Dealer License* 2,472.66 0.00 2,472.66

Foreign Companies 2,685.28 3,571.58 -886.30

Remarks: Data excludes FX Bond / * Top 2 most active investors, Outright Trading TTM > 1YSource: Bloomberg, ThaiBMA

Thai Government Bond Curve US Treasury Curve
http://www.ibond.thaibma.or.th/


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Special Disclosures

Phatra Securities Public Company Limited (Phatra) does and seeks to do business with companies covered or mentioned in its

research reports. As a result, investors should be aware that Phatra may have a conflict of interest that could affect the objectivity

of this research report.

Phatra Securities Public Company Limited ("Phatra") under its proprietary trading desk, may, from time to time, issue derivative

warrants that have underlying securities contained or mentioned in this research report. Should Phatra be the issuer of the derivative

warrants, Phatra may act as the market maker for such derivative warrants. As a result, investors should be aware that Phatra may

have a conflict of interest that could affect the objectivity of this research report.

Copyright 2014 Phatra Securities Public Company Limited. All rights reserved. Any unauthorized use or disclosure is prohibited.

This report has been prepared based on, among other things, fundamental research reports of Phatra Securities Public Company

Limited (Phatra). It is issued by Private Wealth Management Research team and is not a publication of Phatra Research Group

(Phatra Research). The information herein was obtained from various sources: we do not guarantee its accuracy or completeness.

Certain parts of this report are taken from previous research reports issued by Phatra and/or Merrill Lynch, Pierce, Fenner & Smith

Incorporated (MLPF&S). Please see full research reports for more details.

Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any

securities or any options, futures or other derivatives related to such securities ("related investments"). Officers of Phatra or one of

its affiliates may have a financial interest in securities or the issuer(s) or in related investments.

This report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific

investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors

should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or

recommended in this report and should understand that statements regarding future prospects may not be realized. Investors

should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall.

Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future

performance.

Foreign currency rates of exchange may adversely affect the value, price or income of any security or financial instrument

mentioned in this report. Investors in such securities and instruments, including ADRs, effectively assume currency risk.

Investment principal on bonds can be eroded depending on sale price or market price. In addition, there are bonds on which

investment principal can be eroded due to changes in redemption amounts. Care is required when investing in such instruments.


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Corporate Governance Report of Thai Listed Companies 2013Disclaimer

The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is

made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the

information of a company listed on the Stock Exchange of Thailand and the Market of Alternative Investment disclosed to the public

and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an

evaluation of operation and is not based on inside information.

The survey result is as of the data appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the

survey result may be changed after that date. Phatra Securities Public Company Limited ("Phatra") does not confirm nor certify the

accuracy of such survey result. In addition, the list only includes companies under Phatras coverage except those specified.

Companies with Excellent CG Scoring by alphabetical order under Phatras Coverage

Advanced Info Service Airports of Thailand Banpu Bangkok Bank Bangchak Petroleum

BTS Group Holdings LPN Property

Development

Charoen Pokphand Foods Hemaraj Land and

Development

Total Access

Communication

Electricity Generating The Erawan Group Central Pattana INTUCH IRPC

Indorama Ventures Kasikornbank Krung Thai Bank Ch. Karnchang MCOT

Minor International Preuksa Real Estate PTT PTT Exploration PTT Global Chemical

Quality Houses Ratchaburi Electricity

Generating

Robinson Department

Store

Thai Airways

International

Siam Cement

Supalai Thanachart Capital Siam Commercial Bank Thaicom Tisco Bank

Thai Military Bank Thai Oil True Corporation Thai Vegetable Oil

Companies with Very Good CG Scoring by alphabetical order under Phatras Coverage

Amata Corporation BEC World Bumrungrad Hospital Big C Supercenter Berli Jucker

Central Plaza Hotel CP All ESSO (Thailand) GFPT Glow Energy

Home Product Center Land & Houses Major Cineplex Group Siam City Cement Sansiri

Asian Property

Development

Sino Thai Engineering

and Construction

Ticon Industrial

Connection

Thai Union Frozen

Product

Companies with Good CG Scoring by alphabetical order under Phatras Coverage

Asia Aviation Bangkok Chain Hospital Siam Global House

N/A

Companies without survey result available by alphabetical order under Phatras Coverage

MK Restaurant Thai Beverage Bangkok Dusit Medical

Services

Tesco Lotus Retail

Growth Property Fund

BTS Growth Infrastructure

Fund

Nok Airlines

Phatra Wealth Daily 20141211 Rc

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