Written on Dec 24, 2012
Firstly, I would like to say thank you for all your support this year as always and wish all of you a very Merry Xmas and ever so lucky next year. Currently, we are hoping for a ‘cliff-mas’ miracle as lawmakers in Washington have only one week left to strike a fiscal cliff deal. Investors are on heightened alert over the gridlock, since politicians down their Plan B late last week, and debate is halted until after the Christmas holiday. Apart from that, foreign investors remained net buyers amounting THB15 bn of the Thai market for the past two weeks. Tax savings LTF RMF flows are expected to buy up to THB10 bn worth of stocks for their portfolios in the final week of the year. I thus anticipate a low volume trading week with limited upside and protected downside. Chill out.
Basel 3 (on local newspaper Bangkok Post today): The BOT has officially announced the adoption of new international capital requirement standards and guidelines for banks in calculating off-balance-sheet activities as risk assets that must be sufficiently protected by capital funds. For example, first-tier capital should not be less than 6% of the total, from presently 4.5%, with at least 4.5% of that in the form of common shares. Meanwhile, the headline requirement for total capital funds remained intact at 8.5%. Local banks will have no problem adjusting as they already exceed the new minimum requirement. Note that the new standards will be taking effect from Jan 1 onwards.
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