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Thai investment applications top $25 billion in 2019

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BANGKOK (Reuters) – Investment applications in Thailand reached a total 756 billion baht ($25.07 billion) worth of projects in 2019, down about 16% from the previous year but slightly beating a target, the state investment agency said on Monday.

The agency targeted 750 billion baht in investment pledges last year, down from 902 billion baht recorded in 2018.

In 2019, Thai and foreign firms submitted 1,624 projects in Southeast Asia’s second-largest economy, the Board of Investment (BOI) said in a statement.

Of those, about 445 billion baht of planned projects was for the Eastern Economic Corridor, a centerpiece of the government’s policy to spur growth and attract hi-tech industries such as robotics and aviation.

Last year, China beat Japan for the first time as Thailand’s top foreign investor, as firms relocated production due to the U.S.-China trade war, Deputy Prime Minister Somkid Jatusripitak told reporters.

“That’s because costs in China are higher,” he said, adding China’s planned projects were worth 260 billion baht, far above Japan’s 73 billion baht.

Last year, the government launched a relocation package, including tax incentives and special investment zones, to draw foreign firms seeking to escape the trade war.

Somkid said he had asked the BOI and the finance ministry to consider further measures to spur investment over the next six months because private investment had remained low.

The BOI is expected to meet again early next month and offer an investment target for 2020 as it is assessing economic conditions, agency head Duangjai Asawachintachit said.

Thailand’s growth has lagged most regional peers for years. The central bank has projected growth of 2.8% this year after a five-year low of 2.5% in 2019.

(Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing by Anil D’Silva)

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Investment will overshadow trade in Japan-US talks – The Japan Times

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The Japan-U.S. Trade Agreement (JUSTA), the pinnacle for modern trade policy between the two allies, is now in force.

While it’s not a comprehensive trade deal, the JUSTA will remove barriers for billions worth of traded agricultural and industrial goods. Leaders in Washington and Tokyo can rightly highlight the “win-win” benefits of the agreement. And so, over the coming year we should expect other economic issues besides trade to take the lead for future policy discussions and coordination.

Japan-U.S. trade policy will instead take a back seat in the next 10 months to issues like investment policy. Meanwhile, all eyes will be on Washington as the presidential debates and election take the spotlight. Washington will become a political and rhetorical minefield. Any substantive discussion on trade policy will be out of the question as trade continues to become a highly politicized issue. But Japan-U.S. policy coordination will still continue on a working level.

It’s good the JUSTA is essentially done with (though there are implementing procedures to go through) and negotiations are out of the way. But the election is only one reason why we shouldn’t expect any substantial progress on a comprehensive Japan-U.S. free trade agreement (FTA) in the near future.

It’s almost impossible for Congress to pass a trade deal in an election year. Even though the White House may get Congress to vote on the U.S.-Canada-Mexico Agreement, this leaves little political capital left to take up a Japan-U.S. FTA.

U.S. and Japanese trade negotiators understand these political limitations, despite their efforts to negotiate an FTA. Still, even if it wasn’t an election year, both governments are perfectly fine taking the JUSTA as it is to avoid removing barriers to traditionally protected industries or risking punitive tariffs.

There are still a number of areas where Japan-U.S. trade can become more free. The JUSTA falls short of addressing import taxes and other trade barriers on certain goods such as rice, butter, fresh poultry, grapefruits, mandarins, melons, tomatoes, strawberries and passenger vehicles, to name a few.

That’s not to say Japan-U.S. trade interests won’t completely fall by the wayside this year. Both the United States and Japan still have a keen interest in figuring out how to address trade distortions caused by large economies like China. Dealing with non-market economies through the framework of the World Trade Organization will be a top priority for the U.S., Japan and the European Union at this year’s ministerial conference in June — though they’re unlikely to reach any significant solution.

U.S. representatives are more likely to attract criticism from other WTO members than support after allowing a key feature of the WTO’s dispute system, its appellate body, to fall into limbo last year. So with trade essentially out of the way, this more or less moves investment policy into the front seat for Japan-U.S. bilateral discussions.

Investment is important on its own, given its intersection with trade and when talking about Japan-U.S. investments.

U.S. entities are the largest investor in Japan, having historically invested over $60 billion, according to the Japan External Trade Organization. Japanese entities are the second-largest investor in the U.S., having historically invested over $500 billion in U.S. industry and finance, according to the U.S. Bureau of Economic Analysis.

There’s a lot of new rules around foreign investment emerging in both Washington and Tokyo, and in Asia in general. U.S. regulators just finalized new rules that will affect how they review foreign investment and national security. The Diet just recently passed legislation to update its laws on foreign investment as well.

Much of these new rules focus on administrative concerns, like company ownership, and the legal authority governments have to review foreign investments. Other new rules focus on whether potential bad actors could get access to critical technology and information in industries sensitive to national security, with both countries having an eye toward investments from China. But as the U.S. has seen in the past, investments from our largest partners (the United Kingdom, Japan and Canada) tend to get caught up in this red tape for review just as frequently as investments from China. The same could happen for Japan and its occasional investors.

Meanwhile, China has a new foreign investment law that went into force this year that stipulates foreign investment will be treated as equally as domestic investment. Overbearing Chinese regulations on U.S. investments are one of the issues disputed in the U.S.-China trade war.

This isn’t to say U.S. and Japanese officials haven’t been communicating on these new rules at all. For the U.S., it’s the most comprehensive reform of this type of foreign investment law since 2008. Officials want to make sure they get the right mix of input from stakeholders because the last thing they want is to stifle foreign investment.

For Japanese officials, and more importantly Japanese companies, it’s also about making sure that when the U.S. establishes a new whitelist of “excepted foreign states,” where a few countries will see some relief from these new rules, Japan manages to get on the list. But that decision may not be made for another two years.

Other types of investments in Asia are as likely to be in focus this year as well. Just a few months ago, the U.S., Japan and Australia introduced what’s called the Blue Dot Network, an effort that piggybacks on previous investment agreements backed by Japan, the U.S. and Australia to make sure development projects in the Indo-Pacific are high-quality.

Chinese investments abroad, either as a part of its “Belt and Road” initiative or in technologies related to the Made in China 2025 plan, will continue to be the focus for U.S. and Japanese efforts in 2020, too.

Trade will re-emerge as a leading issue in the U.S. as Congress takes up the renewal of America’s leading trade law in 2021. Until then, expect investment to lead the policy discussion and coordination for U.S. and Japanese officials.

Riley Walters is a policy analyst with the Asian Studies Center at the Heritage Foundation.

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Should Air Lease Corporation’s (NYSE:AL) Weak Investment Returns Worry You? – Yahoo Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Today we are going to look at Air Lease Corporation (NYSE:AL) to see whether it might be an attractive investment prospect. Specifically, we’re going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.” data-reactid=”27″>Today we are going to look at Air Lease Corporation (NYSE:AL) to see whether it might be an attractive investment prospect. Specifically, we’re going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.

First up, we’ll look at what ROCE is and how we calculate it. Second, we’ll look at its ROCE compared to similar companies. Then we’ll determine how its current liabilities are affecting its ROCE.

Understanding Return On Capital Employed (ROCE)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Generally speaking a higher ROCE is better. Overall, it is a valuable metric that has its flaws. Author Edwin Whiting says to be careful when comparing the ROCE of different businesses, since ‘No two businesses are exactly alike.” data-reactid=”30″>ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Generally speaking a higher ROCE is better. Overall, it is a valuable metric that has its flaws. Author Edwin Whiting says to be careful when comparing the ROCE of different businesses, since ‘No two businesses are exactly alike.

So, How Do We Calculate ROCE?

Analysts use this formula to calculate return on capital employed:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)” data-reactid=”33″>Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)

Or for Air Lease:

0.052 = US$1.1b ÷ (US$22b – US$356m) (Based on the trailing twelve months to September 2019.)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="So, Air Lease has an ROCE of 5.2%. ” data-reactid=”36″>So, Air Lease has an ROCE of 5.2%.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content=" View our latest analysis for Air Lease ” data-reactid=”37″> View our latest analysis for Air Lease

Does Air Lease Have A Good ROCE?

ROCE is commonly used for comparing the performance of similar businesses. Using our data, Air Lease’s ROCE appears to be significantly below the 9.4% average in the Trade Distributors industry. This performance could be negative if sustained, as it suggests the business may underperform its industry. Setting aside the industry comparison for now, Air Lease’s ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. Investors may wish to consider higher-performing investments.

You can see in the image below how Air Lease’s ROCE compares to its industry. Click to see more on past growth.

NYSE:AL Past Revenue and Net Income, January 19th 2020NYSE:AL Past Revenue and Net Income, January 19th 2020

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="When considering ROCE, bear in mind that it reflects the past and does not necessarily predict the future. Companies in cyclical industries can be difficult to understand using ROCE, as returns typically look high during boom times, and low during busts. ROCE is only a point-in-time measure. What happens in the future is pretty important for investors, so we have prepared a free report on analyst forecasts for Air Lease.” data-reactid=”53″>When considering ROCE, bear in mind that it reflects the past and does not necessarily predict the future. Companies in cyclical industries can be difficult to understand using ROCE, as returns typically look high during boom times, and low during busts. ROCE is only a point-in-time measure. What happens in the future is pretty important for investors, so we have prepared a free report on analyst forecasts for Air Lease.

How Air Lease’s Current Liabilities Impact Its ROCE

Short term (or current) liabilities, are things like supplier invoices, overdrafts, or tax bills that need to be paid within 12 months. Due to the way ROCE is calculated, a high level of current liabilities makes a company look as though it has less capital employed, and thus can (sometimes unfairly) boost the ROCE. To counteract this, we check if a company has high current liabilities, relative to its total assets.

Air Lease has total liabilities of US$356m and total assets of US$22b. As a result, its current liabilities are equal to approximately 1.6% of its total assets. Air Lease reports few current liabilities, which have a negligible impact on its unremarkable ROCE.

Our Take On Air Lease’s ROCE

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Based on this information, Air Lease appears to be a mediocre business. But note: make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a P/E ratio below 20). ” data-reactid=”58″>Based on this information, Air Lease appears to be a mediocre business. But note: make sure you look for a great company, not just the first idea you come across. So take a peek at this free list of interesting companies with strong recent earnings growth (and a P/E ratio below 20).

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).” data-reactid=”63″>If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.” data-reactid=”64″>If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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Should Sunrex Technology Corporation’s Weak Investment Returns Worry You

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Today we’ll evaluate Sunrex Technology Corporation (TPE:2387) to determine whether it could have potential as an investment idea. Specifically, we’re going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.

Firstly, we’ll go over how we calculate ROCE. Second, we’ll look at its ROCE compared to similar companies. And finally, we’ll look at how its current liabilities are impacting its ROCE.

Understanding Return On Capital Employed (ROCE)

ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. All else being equal, a better business will have a higher ROCE. Overall, it is a valuable metric that has its flaws. Renowned investment researcher Michael Mauboussin has suggested that a high ROCE can indicate that ‘one dollar invested in the company generates value of more than one dollar’.

So, How Do We Calculate ROCE?

The formula for calculating the return on capital employed is:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)

Or for Sunrex Technology:

0.035 = NT$265m ÷ (NT$14b – NT$6.6b) (Based on the trailing twelve months to September 2019.)

Therefore, Sunrex Technology has an ROCE of 3.5%.

Check out our latest analysis for Sunrex Technology

Is Sunrex Technology’s ROCE Good?

ROCE can be useful when making comparisons, such as between similar companies. In this analysis, Sunrex Technology’s ROCE appears meaningfully below the 8.1% average reported by the Tech industry. This performance could be negative if sustained, as it suggests the business may underperform its industry. Independently of how Sunrex Technology compares to its industry, its ROCE in absolute terms is low; especially compared to the ~0.7% available in government bonds. Readers may wish to look for more rewarding investments.

We can see that, Sunrex Technology currently has an ROCE of 3.5%, less than the 12% it reported 3 years ago. So investors might consider if it has had issues recently. You can click on the image below to see (in greater detail) how Sunrex Technology’s past growth compares to other companies.

TSEC:2387 Past Revenue and Net Income, January 19th 2020

When considering ROCE, bear in mind that it reflects the past and does not necessarily predict the future. Companies in cyclical industries can be difficult to understand using ROCE, as returns typically look high during boom times, and low during busts. ROCE is, after all, simply a snap shot of a single year. If Sunrex Technology is cyclical, it could make sense to check out this free graph of past earnings, revenue and cash flow.

What Are Current Liabilities, And How Do They Affect Sunrex Technology’s ROCE?

Short term (or current) liabilities, are things like supplier invoices, overdrafts, or tax bills that need to be paid within 12 months. The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets.

Sunrex Technology has total assets of NT$14b and current liabilities of NT$6.6b. Therefore its current liabilities are equivalent to approximately 47% of its total assets. Sunrex Technology has a medium level of current liabilities (boosting the ROCE somewhat), and a low ROCE.

What We Can Learn From Sunrex Technology’s ROCE

This company may not be the most attractive investment prospect. Of course, you might also be able to find a better stock than Sunrex Technology. So you may wish to see this free collection of other companies that have grown earnings strongly.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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