Sunday, January 15, 2017

Myanmar to see rapid growth

Consultancy.UK:

Myanmar, following decades of economic isolation, has – since the handover of military power in 2011 and the 2016 democratic elections – opened its economy to other economies. The opening of the country has seen economic growth accelerate, up from 5.9% in 2011, to hit a forecasted growth of 8.4% in 2017.

(snip)

According to the firm’s analysis, the country is set to enjoy some of the world’s fastest economic growth, hitting 8.4% - well above Lao PDR and Cambodia, on 7% and 6.9% respective. Growth remains on a relatively low base however, the country is one of Asia’s least developed nations with a nominal GDP of around $1,500.


Technology trends, as well as the large amount of relatively free moving capital now means that, even from a low base, the pace of development of Myanmar is expected to well outpace historic trends seen in the UK and US – which took 200 years and 90 years respectively to grow $1,500 to $5,000. Much like the Asian Tigers, which saw growth rates that allowed them to make the leap in 20 years, the current conditions are likely to allow the country to leapfrog to around $5,000 nominal GDP.

The article goes on talk about various surveys of both international and local businesses and their investment plans. A large majority of those surveyed are expecting to aggressively expand their investment in Myanmar.

Buy Yoma Strategic Holdings

Asia's smallest economies also the fastest growing

Strait Times:

Asia's smallest economies are growing faster than giants like China, according to the World Bank.


Cambodia, Laos and Myanmar will post the most rapid expansions in Asia after India from 2017 to 2019, sustaining growth rates of close to 7 per cent, according to forecasts released this week. Among the least developed countries, the combined size of the three economies is less than US$100 billion (S$142.58 billion), about a third of neighbors like Singapore, Malaysia and Philippines.

(snip)

After decades of military rule, Myanmar is liberalizing its economy and adopting market reforms after a transition to democracy. China is its largest trading partner and is building a special economic zone, power plant and deep-water seaport on the west coast.

My readers have been on this for several years and I have invested in Myanmar (Yoma Strategic Holdings) and Cambodia (NagaCorp). These countries should continue to grow at a rapid pace. having a long term perspective is best in my view if one chooses to invest in these places. It is really not too hard as 7% compounded growth means the economy is doubling every ten years. 

Thursday, January 12, 2017

After many false starts we may be seeing a bottom in uranium

World Nuclear News:

Kazakhstan plans to produce 10% less uranium in 2017 than previously planned in response to ongoing oversupply in the uranium market, KazAtomProm chairman Askar Zhumagaliyev announced today.


In total, Kazakh uranium production for 2017 will be 2000 tU less than previously planned. The reduction is roughly equivalent to 3% of total global uranium production based on 2015 figures.

In commodity markets oversupply leads to a collapse in prices. The cure for low prices is low prices. What I mean by this is that as prices decrease fewer and fewer companies can produce at a profit. Eventually the high cost producers are run out of business and a shortage develops thereby allowing prices to rise again.

The cutting of production by the largest uranium producer  is an indication that we may near a bottom in prices. Uranium stocks have been performing well recently. We do know from previous experience that stock prices of resource will move in advance of a move in the resource they produce. This is because the "smart money" is positioning itself in advance of a move. 


Friday, January 6, 2017

Cub Energy completes definitive breakout, going much higher in 2017


The Cub Energy share price, the Ukrainian natural gas producer, has broken out to the upside. The company has published a new investor presentation. In the presentation the company indicated that it could be drilling several new wells in 2017.

The company is also benefiting from the 35% ownership in the Kub-Gas partnership it is in with Burisma Group. 

Burisma Group has been rapidly increasing production of natural gas in Ukraine. The company has increased production by a 63% annual compounded rate between 2010-2015.

The partnership with Burisma along with Cubs own efforts in 2017 lead me to expect a significant re-raating of the stock in 2017.

Bank of Cyprus to resume dividends after repayment of ELA

FT:

Bank of Cyprus, one of the biggest casualties of the eurozone financial crisis, can once again offer investors a dividend after repaying its “monstrous” emergency funding almost a year ahead of schedule.

(snip)

ELA [Emergency Liquidity Assistance] meant there was no chance a dividend could be paid,” said John Hourican, who became chief executive of Bank of Cyprus in late 2013. “This allows us to begin discussions of normal capital distributions over the coming years.”

(snip)


In the three years since its near collapse, Bank of Cyprus raised €1bn by selling shares, and has disposed of international assets as it rebuilt confidence among deposit holders. “A whole pile of little things have added up to what is a really important and big milestone for the bank,” Mr Hourican said.

A whole lot of little things have been going right at the bank. Yes non performing loans are still very high but the problem is being whittled away. If the economy continues to expand as projected than this will definitely help that process. 

You can still buy this bank for almost half of what billionaires like Wilbur Ross paid several years ago when the bank sold shares to recapitalize.  

Thursday, January 5, 2017

Mark Mobius visit to Vietnam

Templeton Funds:

In just a few decades, Vietnam has undergone a dramatic transformation, from an agrarian society to one that has embraced the modern era. Its youthful population and growing middle class have helped drive solid growth—and opportunities for many global investors. This up-and-coming market hasn’t fully embraced capitalism—it remains a Communist state—but it has managed to achieve an interesting balance. 

(snip)


Vietnam has seen strong economic growth, with gross domestic product (GDP) growth averaging just shy of 7% from 2000–2015.1This economic boom has also boosted consumer buying power. In 1990, gross national income (GNI) per capita was US$910, but by 2015, it had risen to $5,690.2 During my recent trip to Vietnam, I found tremendous opportunities in the consumer sector as a result of this rise in income levels.

Mark Mobius is a famous investor in emerging and foreign markets. I always enjoy and learn alot from his articles as nothing substitutes for actual boots on the ground reports.

I remain a long term bull on Vietnam and am playing the country via the Vietnam Opportunity Fund which is selling at a discount to net asset value.

Cyprus on the upswing

Market Mogul:

(snip)

In 2016, Cyprus saw a 3% rise in GDP where the same figure in 2015 was 1.6% and a disastrous -5.9% in 2013. Progress can be proven through various other figures:
  • Job opportunities compared to the previous year have risen by 12.8%
  • Yearly private consumption rose by 2.4%
  • Exports rose by 5.4%
  • Imports rose by 4.2%.
(snip)

Cypriot politicians are not yet satisfied. In 2017, huge projects are expected: for example, the management of the biggest port in Cyprus in the Southern city of Limassol will be transferred into the hands of investors from Dubai and Germany, adding another port on the Eastern side of the island in “Ayia Napa” (best known as the Cypriot Ibiza). Surprisingly, after all the years that casinos have been considered illegal in the country, the creation of the biggest casino in Europe will kicked off at the beginning of this year.

Lastly, on 20 December 2016, the cabinet agreed on negotiating with ExxonMobil, Qatar Petroleum, Eni and Total for the hydrocarbon exploration and exploitation of three blocks in the southern side of Cyprus. The latter two energy giants, along with South Korea’s KoGas, already have permits for four other blocks, while the first oil and gas licensing round was kicked off by Noble Energy in 2007.

Lots of good things happening in Cyprus. This is why I am a big advocate of Bank of Cyprus. We continue to see improvement s in all of the bank's metrics as the year goes on. We should also see a listing for the Bank's stock in London in the first part of this year.

Tuesday, January 3, 2017

Galaxy Resources ships first lithium from mine in Australia

ABC Rural:

Western Australia continues to stake its claim as the world's lithium mining capital, with Galaxy Resources waving off the first shipment from its recommissioned Mt Cattlin mine near Ravensthorpe.
About 10,000 tonnes of lithium concentrate left Esperance Port on January 2 aboard NY Trader 1 bound for Lianyungang Port in China.


The first shipment was valued at $US6 million, with Galaxy planning production of 160,000 tonnes this year.

Galaxy Resources was the lithium stock I bought after I sold my shares in lithium producer Orocobre. Shipping concentrate and ramping up operations in a tight lithium market should bode well for cashflow and the share price. I continue to like Galaxy Resources as my top lithium stock. 

Monday, January 2, 2017

Bitcoin surges over $1000 on Chinese capital flight

Zerohedge

(snip)

Various catalysts for the recent surge have been cited, chief among which is the ongoing crackdown against cash in India providing a new source of demand for bitcoin. However, the most immediate driver of the recent burst in Chinese demand originates, not unexpectedly, from China where Beijing over the weekend implemented even more of what we have said since September 2015 will keep pushing bitcoin relentlessly higher: capital controls.

Recall that as we noted over the weekend, in order to further curb capital outflows, Chinese banks will be required to report all yuan-denominated cash transactions exceeding 50,000 yuan (around 7,100 US dollars) to the People's Bank of China (PBOC), down from the current level of 200,000 yuan, according to a PBOC document released on Friday. Cross-border transfers more than 200,000 yuan by individuals will also be subject to the report process. In terms of foreign currencies, the report threshold remains at the equivalent of 10,000 US dollars for both cash transactions and overseas transfers.

How do we know that this latest PBOC intervention in capital markets was merely the latest form of capital controls? Because the PBOC immediately said it wasn't.

As Xinhua reported overnight, "the policy stoked worries that the government is trying to impose capital control in a disguised form."

"It is not capital control at all," central bank economist Ma Jun said.


Actually, imposing limits on capital movement, i.e. controls, is by definition just that.

I recently recommended Bitcoin as a top speculation for 2017. I still think it could move materially higher. However it is being used mainly by Chinese citizens to skirt capital control laws in China. If it continues to grow, as it currently is, at some point the Chinese government is going to slap it down and then we will see a big dip in Bitcoins price. It is interesting to note that several times in Bitcoins short history it has run up a few hundred percent only to drop well over 50%. 

I think Bitcoin long term has a bright future however right bow it's price is being driven higher by Chinese nationals trying to get capital out of China before the currency loses more value. Caveat Emptor


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