SET acknowledges foreign selloff but sees no cause for concern

 

 

BANGKOK, 5th June 2018 (NNT) – Investors are being told to monitor external risks at this time but have been assured the overall picture is still strong as foreign selloffs are occurring across the region. 

Stock Exchange of Thailand (SET) President Pakorn Pitatawachchai has acknowledged a selloff of stocks by foreign investors is taking place across all of Thailand’s neighbors but assured investors that overall, the Thai stock market is still doing well on the back of institutional and small time investors as well as from the accounts of stock firms. He pointed out the SET also has a diverse range of investors and is not solely dependent on foreign investment, reiterating its strong fundamentals. 

Nevertheless, the president said investors should track external risks affecting capital movements such as changes to the United States’ policy interest rate, international politics and their impact on fuel prices and cases stemming from the developing trade war. On the last matter, Pakorn predicts little effect on Thailand due to its wide range of trading partners and strong economic fundamentals.

 

-- nnt 2018-06-05

This risk has been building,warnings provided,for a few months now.  One more US interest rise will knock Thailand into a cocks hat

1 hour ago, webfact said:

ave been assured the overall picture is still strong

Definite sell signal !

Money returning back to US? I remember there being a flight to safety after 2008, probably lasted through the entire Obama era.

It hasn't gained momentum yet....But this is the year.

Here's the 10 year SET history, I recall being in BKK around 2000 when it was something ridiculous like 350!

 

 https://tradingeconomics.com/thailand/stock-market

 

Here's a better one: http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=TH%3ASET&insttype=Index&freq=2&show=&time=20

 

The world and indeed Thailand is a very different place from what it was back then, it's worth pointing out the SET was at 1,600 circa 1994 and the state of the fundamentlas of the Thai economy at that time was far from great.

Edited June 5, 20188 yr by simoh1490

Thailand's economy is built on quicksand,the juntas figures are beyond belief,can see this lot crashing down. Everybody,but everybody flat broke You see a red plated car outside a tin shack more than often,seems the more broke they become,the more they want to spend

  Let Trumps plans come to fruition, no reason why they will not, US is a self sustain g country and China placing monetary controls on its citizens,sure will be Goodnight Vienna for Thailand

23 minutes ago, altcar bob said:

Thailand's economy is built on quicksand,the juntas figures are beyond belief,can see this lot crashing down. Everybody,but everybody flat broke You see a red plated car outside a tin shack more than often,seems the more broke they become,the more they want to spend

  Let Trumps plans come to fruition, no reason why they will not, US is a self sustain g country and China placing monetary controls on its citizens,sure will be Goodnight Vienna for Thailand

Hmmm! So Thailands export figures for the past fifteen years are bogus; their trade surplus is falsified; their foreign currency reserves don't really exist; the volume of arriving tourist is way overstated; their overseas debt is not real and FDI investors from around the world have all been wrong......okaydokay!

 

I put it to you that what you are witnessing currently in respect of the fall in the SET is part of the normal investment cycle, back in February when there was a global market correction in equity markets (10% or greater), the SET fell 1.46%, one of the lowest falls of any country globally. 

 

And anecdotally: today we were in the Mae Rim Amphur offices, a large government complex that serves a huge Amphur. We were in the passport office getting my wife a new passport and the place was chocka with people doing similar, all making travel plans for holidays etc....... everybody's flat broke you say, hmmm!

 

The real problem with news such as in the OP is that it gives everyone an opportunity to avoid the facts and to air their anti-Thai bias, I really wonder sometimes why such people even bother to live here in the first place.

Edited June 5, 20188 yr by simoh1490

3 minutes ago, simoh1490 said:

Hmmm! So Thailands export figures for the past fifteen years are bogus; their trade surplus is falsified; their foreign currency reserves don't really exist; the volume of arriving tourist is way overstated; their overseas debt is not real and FDI investors from around the world have all been wrong......okaydokay!

 

I put it to you that what you are witnessing currently in respect of the fall in the SET is part of the normal investment cycle, back in February when there was a global market correction in equity markets (10% or greater), the SET fell 1.46%, one of the lowest falls of any country globally. 

 

And anecdotally: today we were in the Mae Rim Amphur offices, a large government complex that serves a huge Amphur. We were in the passport office getting my wife a new passport and the place was chocka with people doing similar, all making travel plans for holidays etc....... everybody's flat broke you say, hmmm!

 

Agreed... but ordinary Thais are mostly flat broke, as evidenced by the rise of private debt, amongst other things.

Just now, mommysboy said:

 

Agreed... but ordinary Thais are mostly flat broke, as evidenced by the rise of private debt, amongst other things.

Sure they are, a part of that is the shift away from agriculture (susceptible climate and market forces)and manufacturing (susceptible to automation) and into service industries that support tourism, an area that is way overpopulated already.

1 hour ago, simoh1490 said:

And anecdotally: today we were in the Mae Rim Amphur offices, a large government complex that serves a huge Amphur. We were in the passport office getting my wife a new passport and the place was chocka with people doing similar, all making travel plans for holidays etc....... everybody's flat broke you say, hmmm!

Rats fleeing the sinking ship? ?

President Pakorn Pitatawachchai , this guy is right,what is he president of SET?   

 Where people congregate,the wealthy ones, getting passports or whatever,that does not spread to the general population, that is flat broke. Things are happening in Thailand,Trump probably will be the prime mover to events,and not forgetting the forthcoming elections lol    Farmers, be it pork,(pigs) ,rice rubber etc are in for a horrendous time,only the army there to keep order,civil disobedience beckons,if you believe figures that a junta pours forth,you believe in Alice in Wonderland

 

 Might as well include US has long accused Thailand of being a currency manipulator,can cover for it for so long then events bite them in the ass

Edited June 5, 20188 yr by altcar bob

10 hours ago, webfact said:

He pointed out the SET also has a diverse range of investors and is not solely dependent on foreign investment

So not another 1997, then? 

3 hours ago, simoh1490 said:

Hmmm! So Thailands export figures for the past fifteen years are bogus; their trade surplus is falsified; their foreign currency reserves don't really exist; the volume of arriving tourist is way overstated; their overseas debt is not real and FDI investors from around the world have all been wrong......okaydokay!

 

I put it to you that what you are witnessing currently in respect of the fall in the SET is part of the normal investment cycle, back in February when there was a global market correction in equity markets (10% or greater), the SET fell 1.46%, one of the lowest falls of any country globally. 

 

And anecdotally: today we were in the Mae Rim Amphur offices, a large government complex that serves a huge Amphur. We were in the passport office getting my wife a new passport and the place was chocka with people doing similar, all making travel plans for holidays etc....... everybody's flat broke you say, hmmm!

 

The real problem with news such as in the OP is that it gives everyone an opportunity to avoid the facts and to air their anti-Thai bias, I really wonder sometimes why such people even bother to live here in the first place.

 

"I really wonder sometimes why such people even bother to live here in the first place."

 

Yes, well, that comment has been made before, frequently. It isn't really any of your business though, and people will choose for themselves where they live without having to justify it to you.

 

Still, I acknowledge this is something you don't know about and probably can't understand, which kind of begs the question: "What else is there that you don't know and can't understand, and how does that enhance your credibility when commenting on the economy?"

 

Just asking...

 

11 hours ago, webfact said:

Nevertheless, the president said investors should track external risks affecting capital movements such as changes to the United States’ policy interest rate, international politics and their impact on fuel prices and cases stemming from the developing trade war.

...because no investor, ever, did any of these things. ? Thanks for the heads up, Pakorn. ?

1 hour ago, KiwiKiwi said:

 

"I really wonder sometimes why such people even bother to live here in the first place."

 

Yes, well, that comment has been made before, frequently. It isn't really any of your business though, and people will choose for themselves where they live without having to justify it to you.

 

Still, I acknowledge this is something you don't know about and probably can't understand, which kind of begs the question: "What else is there that you don't know and can't understand, and how does that enhance your credibility when commenting on the economy?"

 

Just asking...

 

Go bait and flame somebody else, I'm not interested!

1 hour ago, Jonmarleesco said:

So not another 1997, then? 

'97 was a different thing entirely, '97 was all about Thai developers borrowing large sums offshore in USD at an exchange rate that wasn't sustainable, that and the central bank's deposits being tied up in long dated instruments hence they couldn't defend the financial crash, today, the entire economic picture is 180 degrees from '97.

2 hours ago, altcar bob said:

President Pakorn Pitatawachchai , this guy is right,what is he president of SET?   

 Where people congregate,the wealthy ones, getting passports or whatever,that does not spread to the general population, that is flat broke. Things are happening in Thailand,Trump probably will be the prime mover to events,and not forgetting the forthcoming elections lol    Farmers, be it pork,(pigs) ,rice rubber etc are in for a horrendous time,only the army there to keep order,civil disobedience beckons,if you believe figures that a junta pours forth,you believe in Alice in Wonderland

 

 Might as well include US has long accused Thailand of being a currency manipulator,can cover for it for so long then events bite them in the ass

14

My, you do have a thing about poor people and about Trump!

 

Twenty years ago in Thailand, some 80% of the population was classified as rural poor. One of the great economic miracles of the past twenty years is the migration of a large part of that population into the middle-class, people with money....it was those people that I saw mostly in the passport office yesterday, everyday normal Thai people, not rich, not hi-so just normal folk. Here's what the World Bank has to say on that subject: http://www.worldbank.org/en/news/press-release/2011/08/02/thailand-now-upper-middle-income-economy

 

Here's another good read on that migration, part of which says: "In 1986, 67 percent of Thais lived in poverty. By 2014, the national poverty rate had dropped to 11 per cent. This telling fact speaks to Thailand’s impressive growth and poverty-reduction measures in the past 30 years. Education and healthcare expansion to the majority of the population greatly contributed to national poverty reduction. This fact alone makes Thailand one of Southeast Asia’s greatest success stories."http://www.borgenmagazine.com/rural-poverty-in-thailand/

 

Exactly what Trump has to do with any of this, nor or in the future, only you will know - FWIW Thailand exports to the US represent only 11% of its total exports, if Trump were to slap tariffs on all of that 11% I doubt that anyone would really care, in fact, it may even help Thailand with its runaway currency which is becoming very difficult to control, because of high exports levels.

Edited June 5, 20188 yr by simoh1490

Exports?  you would not be holding high hopes of that continuing, those ships,car carriers etc stacked outside Leam Chabang port for one hell of a time,all swinging at anchor paints a different picture

 

8 minutes ago, altcar bob said:

Exports?  you would not be holding high hopes of that continuing, those ships,car carriers etc stacked outside Leam Chabang port for one hell of a time,all swinging at anchor paints a different picture

 

I don't have your ability to look at some ships off shore and equate that to decreased Thai exports, it's a leap too far for me with nothing else to support the theory. What I can do though is look at a larger picture and conclude that even if your theory is correct, it may not even matter that much:

 

The Top Ten Exports from Thailand in 2017

 

1. Machinery including computers: US$40.2 billion (17% of total exports)
2. Electrical machinery, equipment: $34.1 billion (14.4%)
3. Vehicles: $28.5 billion (12.1%)
4. Rubber, rubber articles: $16.3 billion (6.9%)
5. Gems, precious metals: $12.8 billion (5.4%)
6. Plastics, plastic articles: $12.7 billion (5.4%)
7. Mineral fuels including oil: $8.2 billion (3.5%)
8. Meat/seafood preparations: $6.3 billion (2.7%)
9. Optical, technical, medical apparatus: $5.7 billion (2.4%)
10. Cereals: $5.4 billion (2.3%)

Top 15 trading partners in 2017.

 

1. China: US$29.4 billion (12.4% of total Thai exports)
2. United States: $26.5 billion (11.2%)
3. Japan: $22.3 billion (9.4%)
4. Hong Kong: $12.3 billion (5.2%)
5. Vietnam: $11.6 billion (4.9%)
6. Australia: $10.5 billion (4.4%)
7. Malaysia: $10.3 billion (4.4%)
8. Indonesia: $8.8 billion (3.7%)
9. Singapore: $8.2 billion (3.5%)
10. Philippines: $6.9 billion (2.9%)
11. India: $6.5 billion (2.7%)
12. Cambodia: $5.3 billion (2.2%)
13. Germany: $4.9 billion (2.1%)
14. Netherlands: $4.8 billion (2%)
15. South Korea: $4.6 billion (2%

http://www.worldstopexports.com/thailands-top-import-partners/

http://www.worldstopexports.com/thailands-top-10-exports/

 

The subject BTW is the SET and the sell off, not exports etc.

7 hours ago, simoh1490 said:

'97 was a different thing entirely, '97 was all about Thai developers borrowing large sums offshore in USD at an exchange rate that wasn't sustainable, that and the central bank's deposits being tied up in long dated instruments hence they couldn't defend the financial crash, today, the entire economic picture is 180 degrees from '97.

Borrowing at an exchange rate that was not sustainable suggests it was overvalued. I suggest it is overvalued now also not sustainable. 

28 minutes ago, Farrows3399 said:

Borrowing at an exchange rate that was not sustainable suggests it was overvalued. I suggest it is overvalued now also not sustainable. 

Prior to '97 the Baht was hard pegged against USD, BOT couldn't have changed the exchange rate if they wanted to, not without going to the IMF and getting agreement. Today BOT operates a managed float which is a different beast entirely and they have the freedom to manage the rate as they need to.

 

And whilst you may not like the current Baht exchange rate and you may think it's overvalued and not sustainable, it's where it is today because business is good and the Baht is in high demand. Exporters keep changing their USD into Baht, tourists keep coming and exchanging their money into Baht and eventually FDI will improve and that will mean another demand for THB. In terms of the economic fundamentals, THB is pretty much where it deserves to be, I fully expect it to strengthen to under 40 against GBP inside a few years and to 35 inside 10 years.

 

 

Edited June 6, 20188 yr by simoh1490

15 minutes ago, simoh1490 said:

. In terms of the economic fundamentals, THB is pretty much where it deserves to be, I fully expect it to strengthen to under 40 against GBP inside a few years and to 35 inside 10 years.

An interesting prediction. Have you taken into account the very likely political upheavals over the next 10 years.

I'm no financial expert (goodness knows) but if your prediction predicates the current political status quo continuing for the next decade, then I think you may be overoptimistic. The likely widespread discontent amongst much of the population if that is the case will make the country extremely unattractive to investment and business, I would suggest.

13 hours ago, mommysboy said:

 

Agreed... but ordinary Thais are mostly flat broke, as evidenced by the rise of private debt, amongst other things.

Nothing specific to LOS about that. Doesn't every western country have an unsustainable level of personal debt, driven by banks and government policies?

IMO the world is in for another depression, probably worse than the 1930s, except this time many people are too soft to survive, having been victims of the nanny state all their lives. If their credit card doesn't work, they are toast, as have no practical skills at all.

4 minutes ago, JAG said:

An interesting prediction. Have you taken into account the very likely political upheavals over the next 10 years.

I'm no financial expert (goodness knows) but if your prediction predicates the current political status quo continuing for the next decade, then I think you may be overoptimistic. The likely widespread discontent amongst much of the population if that is the case will make the country extremely unattractive to investment and business, I would suggest.

Historically, politics has had almost no impact on the value of THB, even when there were tanks on the streets and snipers on the BTS, THB dipped but very quickly returned to its upwards trajectory. Once again, the strength of a currency is determined by the demand for it, as long as exports and tourists keep exchanging currency for THB it will continue to strengthen. The degree to which FDI plays a role will probably be determined by interest rates in the West, as things stand Thai government bonds are still attractive but that may soon fade if a western equivalent appears on the market. I think however that a combination of tourism and exports will be sufficient to maintain THB value, FDI would just be the icing on the cake as it were.

8 hours ago, simoh1490 said:

'97 was a different thing entirely, '97 was all about Thai developers borrowing large sums offshore in USD at an exchange rate that wasn't sustainable, that and the central bank's deposits being tied up in long dated instruments hence they couldn't defend the financial crash, today, the entire economic picture is 180 degrees from '97.

Good points plus the fact that the less than 50B USD foreign reserves in 1997 couldn't deter speculators and were used up in less than a year to defend the Baht. Thailand is in a better position currently with foreign reserves at over 200 B and is a formidable war chest to deter speculators.  

49 minutes ago, Farrows3399 said:

Borrowing at an exchange rate that was not sustainable suggests it was overvalued. I suggest it is overvalued now also not sustainable. 

Nothing about the current economic situation world wide is sustainable. Personal debt being driven by mickey mouse bank and government policies and too much money in the hands of too few people, IMO, guarantees another great depression. 

It's like they learned nothing from 2007, for which no guilty person has been punished.

IMO, disaster is only being kept at bay because governments borrow to give welfare to people unable to find real work.

Once every country becomes like Greece, the whole house of cards collapses.

1 hour ago, altcar bob said:

Exports?  you would not be holding high hopes of that continuing, those ships,car carriers etc stacked outside Leam Chabang port for one hell of a time,all swinging at anchor paints a different picture

 

If I were a betting man, I'd be betting in a collapse of the car industry. Australia no longer makes cars, with loss of 50,000 jobs, New Zealand stopped making them years ago, Britain sold all it's car companies. 

People have unsustainable levels of debt, so a new car is not going to be a priority. 

 

I could go on, but I'll leave it at that.

9 hours ago, simoh1490 said:

Go bait and flame somebody else, I'm not interested!

 

How odd. One of the options I had was to say the same thing to you. But I chose not to on the basis that it would have been ignorant, no matter how black the pot.

 

Ah well. Have a great day, and do try to learn how to mind your own business, it's a life lesson worth learning, you'll thank me one day.

 

By the way, do consider using the ignore list, it can be quite useful.

Edited June 6, 20188 yr by KiwiKiwi

14 minutes ago, thaibeachlovers said:

Nothing about the current economic situation world wide is sustainable.

That one sentence sums things up nicely - thank you.

Yet we have people on here praising Thailand for jumping on-board a sinking ship!