Presentation Transcript
Thai Capital Market within The Globalization (Designed for The New Investors Program/NIP#13 of Thai Investors Association & Stock Exchange of Thailand) Version-10 (Total 40 Slides) By ดร. ธรรมนูญ อานันโทไทย Thai Investors Association At The Stock Exchange of Thailand Building Monday, March 17, 2008 1:00pm – 4:00pm : Thai Capital Market within The Globalization (Designed for The New Investors Program/NIP#13 of Thai Investors Association & Stock Exchange of Thailand) Version-10 (Total 40 Slides) By ดร. ธรรมนูญ อานันโทไทย Thai Investors Association At The Stock Exchange of Thailand Building Monday, March 17, 2008 1:00pm – 4:00pm
Question #1: Is the Sun Rise on the East or West? : Question #1: Is the Sun Rise on the East or West?
Question#2: Sun Rise - Sun Set …: Question#2: Sun Rise - Sun Set … (1) Is its color Red? (2) Is its color Orange?
Content: Content Topic #1: Globalization of Macro
Public Economic Finance
Topic #2: Globalization of Macro
Private Economic Finance
15 Minute of Intermission
Topic #3: US. Subprime Situation &
Thai Economic Finance
Topic #4: Globalization Marco Economic
Finance & Thai Capital Market
Topic #1: Topic #1 Globalization of Macro Public
Economic Finance
Slide6: Before Tome Youm Kung Crisis Mid-Year-1997
SI = +3% of GDP
Present Time (Dec’07)
S>I = +5.80%
Estimated by Ending of Year 2008
S>I = +3.50%% of GDP
Slide7:
Central Bank (BOT)
Monetary Policy Public Financial Sector
Fiscal Policy
Ministry of Finance
Taxation Tools
Monetary Tools
Slide8: National Balance of Payment BALANCE OF PAYMENT = Current A/C + Capital A/C
National Balance of Payment Account Estimated As of December 31, 2007 : National Balance of Payment Account Estimated As of December 31, 2007 (1) Exports - Imports (X-M)=Surplus Trade Balance
US$23.5B. (+18.5%) – US$17.0B. (+9.7%) = +US.$6.50B.
(2) + Services Acct (Oversea Investment + Tourist)
(3) + Current Acct (Surplus/Deficit) =
+US$4.5B. (+5.9% of GDP & Estimated +3.2% by 2008)
(The difference of “S” versus “I”)
(4) + Capital Acct (Surplus)
(FDI + Indirect Investment + Portfolio)
(5) + Balance of Payment Acct (Surplus)
(6) = Forex Reserve (Official Reserve) = US.$87.6B.
& Add US$19.1 of Forwards with total US$106.70B.
Top-10 of Official FOREX Reserves in US. Billions Source: Wall Street Journal, World Bank & IMF : Top-10 of Official FOREX Reserves in US. Billions Source: Wall Street Journal, World Bank & IMF
Managed Float by our BoT: Managed Float by our BoT Left Hand Side !
(Exposures with US.$)
BoT purchased US$
& Sold THB. (Last 23 Mos.)
FOREX Increased from below US.$40B. to US.$87.6B.
Estimated US$ is weakling from THB.2.00 to THB.6.75
Approximately book loss upto THB.230,000M. on the total Forex Reserve of US.$87.6B. Right Hand Side!
(Created More Costs of THB.)
BoT sold THB. on spot as well as on the futures market
BoT Issued the BOT-Notes to swap cash out from the market
Approximately Total THB. 980,000M. of Notes issuing
The notes cost started from RP Rates of 5.25% down to 3.25%
Average interest cost just about THB.187M./day & upward more and more for each day
Bottom Line of Topic #3: The Rule of Thumb on FOREX: Bottom Line of Topic #3: The Rule of Thumb on FOREX (1) Stronger currency for the richer, but Weaker for the poor nation
(2) Stronger currency for better oversea purchase, but badly to sale out the goods & services
(3) Stronger causes recession econ, but recovery session does well under the Weaker currency
(4) Stronger hurt Exports, but support Imports &
foreign debts as well
(5) Buy FIF on Stronger currency & Sell it on Weaker
(6) Mostly trading surplus nation intentionally carry their weaker currency policy
Tipic #2: Tipic #2 Globalization of Macro Private Economic Finance
Slide14:
Primary Market
Money Market
Private Financial Sector
Capital Market
Primary Market
Secondary Market
Secondary Market
Slide16: SECURITIES & EXCHANGE COMMISION (SEC) Central Bank
MONEY MARKET FINANCIAL MARKET CAPITAL MARKET
Slide17: BANK OF THAILAND
(BOT) MONEY MARKET LINKING BUSINESSES
(Primary & Secondary MKT.) Beginning Point Here !!!
FINANCIAL MARKET CAPITAL MARKET DEBT LINKING EQUITY
INSTRUMENTS SECURITIES&EXCHANGE
COMMISION (SEC) EQUITY RAISING AND
DEBT FINANCING DERIVATIVE, SPV &
SECURITIZATION Hedged Funds:
Future & Option Products ? Subprime?
7-Types of Financial Products of Worldwide Hedged Funds: 7-Types of Financial Products of Worldwide Hedged Funds (1) Stock Indexes
(2) Energies
(3) Metals
(4) Currencies
(5) Agricultural
(6) Short-Term Interest Rates &
(7) Long-Term Interest Rates
Slide19: LOCAL FINANCIAL INSTRUMENTS (5) DERIVATIVE SECURITIES (4) FUTURE&OPTION (3) CONVERTIBLE (2) DEBT (1) DEPOSIT# Notes
Certificate
of Deposit(CD)
NCD Commercial Paper (CP)
Bill of Exchange(B/E)
Banker Acceptance(BA)
Note Insurance Facilities(NIF)
Floating Rate Notes(FRN)
Corporate Bond Convert
Security
Warrant Detachable
Warrant
Non-Detachable
Warrant Future
Forward
Option
Swap Convertible Debentures
Warrant
Options
Securitization SECURED TYPE
Mortgage Bond
Collateral Trust Bond
Equipment Trust Bond
UNSECURED TYPE
Debenture
Subordinate Bond
Income Bond
Bottom Line of Topic #2: Working Capital Management by Listed Private Public Company : Bottom Line of Topic #2: Working Capital Management by Listed Private Public Company Minimizing
Forex Risk
Fully Hedged
Reduce & Cap Oversea Loan
Forward Contract
Cross Currency Swap
FOREX Currency Options
Rolling Over of
Forward Contract
Liquidity Management
Centralize Short-Term
Debts Management
Debt Link to Equity
Minimizing Interest Rate Risk & Swap Asset
Combine Managed of all 3 Cash Flows: (Operating + Investing + Financing)
15-Minute of Intermission: 15-Minute of Intermission
Topic #3: Topic #3 US. Subprime Situation
&
Thai Economic Finance
Value of US. Subprime Mortgage CDO’s (Source: www.ABalert.com as of year end of 2006): Value of US. Subprime Mortgage CDO’s (Source: www.ABalert.com as of year end of 2006) Total of Worldwide for 2006 = US.$445.3Billions & 965 Funds
Subprime Loan: Subprime Loan (1) Expending of US. Housing Loans
(2) Collateralized Debt Obligation
(3) Underlying Assets on Futures
(4) Hedge Funds
(5) Mark to Market on The Portfolio
(6) Redemption (Withdrawal)
(7) Central Banks Bailout US.$477.7B.
(8) Foreclosure Housing in USA
Interest Charge of Housing Loan Systems in the USA: Interest Charge of Housing Loan Systems in the USA (1) Interest Loan Only
(2) Adjustable Mortgage Rate
(3) Stated Income Mortgage
(4) Equity Borrowing
Impact of Sub-Prime by CDO’s (Preliminary Loss Around US.$160B. As of last August 15): Impact of Sub-Prime by CDO’s (Preliminary Loss Around US.$160B. As of last August 15) Bear Stern loss more than 23% of its assets
IKB of German cut loss at least US.$3.5 Billions
Citigroup loss at US.$ 700 Millions
Macquarie of Australia loss 25% of its assets
Global Alpha Hedge Fund of Goldman Sachs loss US.$2.1 Billions
Mortgage Guaranty Insurance Crop loss US.$1.0B.
UBS Fund by UBS Bank loss US.$123 Millions
3-Funds of BNP Paribas asked for temporary Terminations
American Home Investment Corp. declared bankruptcy
Central Banks Bail Out As of August’07: Central Banks Bail Out As of August’07
Subprime: Worst Crisis to Come !!! As Year End of 2007: Subprime: Worst Crisis to Come !!! As Year End of 2007 Source: Exim Bank & Wall Street Journal
Bottom Line of Topic #3 Thai Financial Economic Onward !: Bottom Line of Topic #3 Thai Financial Economic Onward ! (1) Local Credit Risk
(2) Local Liquidity Risk
(3) Domestic Interest versus
Inflationary Target (Cost Push)
(4) Volatility between Equity
(SET) & Futures (TFEX)
(5) Forex Volatility
Topic #4: Topic #4 Globalization of Macro
Economic Finance
&
Thai Capital Market
Slide31: Worldwide Hedged Fund Cycle Fund Mobilization
(Debt & Equity) Net profit Max.
Capital
Gain Assets
(Spot &
Futures) New Investors
+ Re-investments ROI =
Max.
Unearned
Income
Risk-Return Trade-Off of Various “Instruments”: Risk-Return Trade-Off of Various “Instruments” rf Risk Required Return %
x Derivative
x Common Stock
x Low Quality Corporate Debt
x High Quality P/S
x High Quality Corporate Debt
x L-T Government Debt
S-T Government Debt
Comparison of Listing Performance (Source: SET-Research Center): Comparison of Listing Performance (Source: SET-Research Center)
BUSINESS ACTIVITIES & FINANCIAL CASH FLOW STATEMENTS of Listing Companies at the SET as December 31, 2006: BUSINESS ACTIVITIES & FINANCIAL CASH FLOW STATEMENTS of Listing Companies at the SET as December 31, 2006 NET INVESTING ACTIVITIES
(Bt.124,000M.) NET OPERATING ACTIVITIES
= Bt.163,000M. NET FINANCING ACTIVITIES
(Dividend Paid =bt.178,000M.)
= Bt.36,000M. A C B Net Positive Cash Flow of Q4/2006 = +Bt.75,000M.
What is a firm? The Shareholder Value Network: What is a firm? The Shareholder Value Network 2)Investment Cash Flow From Operations Discount Rate Debt VALUATION
COMPONENTS Value
Growth
Duration Sales Growth
Operating Profit
Margin
Income Tax Rate Working Capital
Investment
Fixed Capital
Investment Cost of
capital VALUE
DRIVERS 1) Operating MANAGEMENT
DECISIONS Shareholder
Value Added (SVA) Shareholder Return:
(1) Dividend
(2) Capital Gains
(3) Rights Issue CORPORATE
OBJECTIVE
Key to Considerations Globalization Economic Finance & Thai Capital Market: Key to Considerations Globalization Economic Finance & Thai Capital Market Macro-Picture
(Top of the Nation)
Exports-Imports
Services A/C
Current A/C
Capital A/C
Balance of Payments
FOREX Reserve
Listed Company
(At the Micro-Picture)
Margin
EBITDA
Tax
Net Profit
EPS & DPS
3-Cash Flows Movement
Bottom Line of Topic #4: Watch Out ! The Flat World of Economic Finance “versus” Thai Capital Market Development: Bottom Line of Topic #4: Watch Out ! The Flat World of Economic Finance “versus” Thai Capital Market Development (1) Equilibrium between Stronger
“Versus” Weaker of the FOREX
(2) Cross Border Exchanges & Listings
(3) Combination of Spot on Equity & Futures & Options Products
(4) Asian Currency within next 10 Years?
(5) Turn Around from Asset Treading into Asset Management Regional Hub
Is color of the sun red or orange?: Is color of the sun red or orange? Orange Red
Open for Q & A: Open for Q & A Good Luck to Nip #10/2007
tommy@merchant.co.th
March 21, 2007
ดร.ธรรมนูญ อานันโทไทย tommy@merchant.co.th : ดร.ธรรมนูญ อานันโทไทย tommy@merchant.co.th
ใช้ชีวิตเรียนหนังสือตั้งแต่ระดับมัธยมศึกษา (High School) จนจบปริญญาเอก (Ph.D.) ในสหรัฐอเมริกา เป็นเวลาติดต่อนานกว่า 16 ปี เมื่อกลับมาประเทศไทย ได้ทำงานในแวดวงตลาดทุน (Capital Market) เป็นเวลากว่า 21 ปี โดยมีตำแหน่งครั้งสุดท้ายคือ President & CEO ของบริษัทหลักทรัพย์ DBS Thai Danu Securities Ltd. อันเป็นสถาบันการเงินในกลุ่ม Temasek & DBS Group ของสิงคโปร์ที่ใหญ่ที่สุดในเอเชียใต้ ต่อมา Early Retirement ได้รับเลือกให้ดำรงตำแหน่ง Chairman of Executive Board-Advance Securities Ltd. (Broker #21) & คณบดีคณะบริหารธุรกิจ มหาวิทยาลัยธุรกิจบัณฑิตย์ ปีการศึกษา 2544-45 and Completed 5-IOD Courses by Thai-Institute of Directors: DAP-48/2005, ACP-10/2005, DCP-70/2006, RCP-14/2006, & UFS-7/2007 **ปัจจุบัน – (Present Year - 2008)** (1) Chairman of The Audit Committee & Director, Eastern Printing Public Co. Ltd. (EPCO)
(2) Chairman of The Audit Committee & Director of IFS-Capital (Thailand) Plc. (IFS-S’pore Group)
(3) Chairman of The Audit Committee & Director of Better World Green Public Co. Ltd. (BWG)
(4) Executive Director & Chief Economist, Merchant Partners Public Co. Ltd. (SET-Broker #21)
(5) Director & Audit Committee of Property Perfect Public Co. Ltd. (PF)
(6) Director & Audit Committee of Ua WIthaya Public Company Ltd. (UWC)
(7) กรรมการการลงทุนในกองทุนประกันสังคม (Investment Committee of The National Social Security Fund)
(8) กรรมการในสายงานเศรษฐกิจของสภาอุตสาหกรรมแห่งประเทศไทย (Federation of Thai Industries)
(9) Ex-Board ในตลาดสินค้าเกษตรล่วงหน้าแห่งประเทศไทย (Agricultural Futures Exchange of Thailand-AFET)
(10) Member of The Audit Committee-Board of Trustees, Bangkok University, Thailand