atans1

Asean round-up

In Indonesia, Malaysia on 27/04/2013 at 7:04 am

Thai banks are warily watching for signs of a credit bubble, even as they make record profits on robust loan growth on the back of a strong economy.

Bangkok Bank, Thailand’s largest lender by assets hasraised its loan-loss reserve coverage to 203.3% of non performing loans (NPLs) in the first quarter, more than double the central bank’s minimum requirement.

The Bank of Thailand has cautioned banks on rising household debt in South-east Asia’s second biggest economy, and expressed concern that cheap home loans could cause a steep rise in prices similar to that seen in Singapore and Hong Kong.Thai banks say there are not worried about a property bubble, but concede there is a possible excess supply of condominiums along Bangkok’s mass transit routes.

Fresh from leveraging up to buy a stake in insurer Ping An (he borrowed US$5.5bn), Dhanin Chearavanont is borrowing US$6 billion to finance a takeover of Siam Makro. Combining the Thai cash-and-carry group with his 7-Eleven convenience store chain makes sense. He co-founded Siam Makro with Dutch group SHV in the late 1980s, but was forced to sell out in 1998 when the Asian crisis left his empire overextended (soon to be repeated?). Sentimentality aside, the combined business should also be in a stronger position to expand into neighbouring Southeast Asian countries such as Laos and Myanmar.

The reunion is expensive. The offer price of 787 baht per share is 75% above where Siam Makro was trading at the beginning of January, and values the business at 53 times last year’s earnings. The advantage is that both Siam Makro and CP All, Mr Dhanin’s partially listed Thai retail company, currently have no debt.

“No business as usual if opposition wins Johor: Anwar”. So too said Lim Kit Siang. This means Iskandar will be affected.

“Leaders of Indonesia & Singapore discuss ways to boost close ties” Err what about the forest fires that come round this time every yr for decades? I’m bullish on Indonesia but taz despite its dysfunctional govt.

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