Dividend Paying Thai Stock Options?

[utalkin2me]

I was actually about to head to Bangkok Bank main branch and ask about this, but thought I would throw it up here as well.

 

I am not an experienced investor, but have been looking into putting money in stocks that will pay out dividends on a regular basis.

 

I am only interested in Thai stocks by the way. Any info or options on this would be appreciated. 

[Pattaya46]

You will have to make some serious reading and comparisons before buying.

Most information is on the official SET website : https://www.set.or.th/

 

By example, here is the list of High Dividend Stocks that may interest you :

https://www.set.or.th/th/market/files/constituents/SETHD_H1_2019.pdf

 

[AtoZ]

Omg do not, I repeat, DO NOT ask for advice at a bank.

 

You will walk out with a shitty mutual fond that will eat you alive and provide nice bonuses for the "bankers"

 

As Pattaya46 said - the SETHD is good start. Then you need to educate yourself.

[toolpush]

Be aware that any dividends paid out by a Thai company will probably be subject to a 10% withholding tax.

https://sherrings.com/dividend-income-personal-tax-thailand.html

[1FinickyOne]

The other thing to be aware of is that dividend policy can be changed by the company, which can result in a rise/fall of share prices too... 

[Lacessit]

Why would the OP not invest in dividend-paying shares in his own country of origin?

Rule 1 of investing is never invest in something you don't understand.

[MadMuhammad]

Employ a broker with quality references and/or research then as much as possible. I did (not Thailand) and it’s worth it’s weight in gold 

[nahkit]

Be aware that there is a Thai market and a foreigner market (with different prices for the same shares, and no, this is not a wind-up). As a foreigner, in order to receive dividends, you must have purchased the shares in the foreigner market, at least that is what I was told by the securities company that I deal through.

 

If you purchase your shares in the Thai market (which I did at first as no-one told me otherwise despite my asking a direct question) they can, in some cases, for a fee, transfer them to the foreign market at dividend time.

 

There have been occasions when I have been called by the securities company to say that a dividend is due for payment but I can't transfer the stock as the foreign quota is full and so have to forego the payment.

 

The whole idea of having two markets but letting me purchase shares in either and transferring them between the two seems totally ridiculous but talking to the people at the securities company about it just gives me a headache.

[nahkit]

3 hours ago, toolpush said:

Be aware that any dividends paid out by a Thai company will probably be subject to a 10% withholding tax.

https://sherrings.com/dividend-income-personal-tax-thailand.html

A foreigner can get a Thai tax number and claim the tax back each year.

[Pedrogaz]

Stock options never pay dividends...they are merely a contract made with another party giving you right to buy or sell stocks of a given company in a given time frame.

 

Ownership of stocks may or may not pay dividends. 

 

I would recommend you avoid the stock market as your question indicates that you don't understand it. Never ever invest in anything you don't understand, If you do you will get fleeced. 

[PerkinsCuthbert]

28 minutes ago, nahkit said:

Be aware that there is a Thai market and a foreigner market (with different prices for the same shares, and no, this is not a wind-up). As a foreigner, in order to receive dividends, you must have purchased the shares in the foreigner market, at least that is what I was told by the securities company that I deal through.

It's at least fifteen years since I last traded Thai stocks, but this was emphatically not true for the fifteen years before that. Perhaps things have changed, but as far as I know it is perfectly possible to open a local brokerage account, transfer funds into Thailand and buy, sell and receive dividends on the local market, just as any Thai national can. As mentioned above, for most investors there is a ten percent withholding tax. 

[PerkinsCuthbert]

2 minutes ago, Pedrogaz said:

Stock options never pay dividends...they are merely a contract made with another party giving you right to buy or sell stocks of a given company in a given time frame.

 

Ownership of stocks may or may not pay dividends. 

 

I would recommend you avoid the stock market as your question indicates that you don't understand it. Never ever invest in anything you don't understand, If you do you will get fleeced. 

I think perhaps you misunderstand due to the OP's poor wording; he seems to be talking about his options regarding ways to invest in the Thai market - not about stock options per se. That's how I read it, after some initial confusion. 

[nahkit]

3 hours ago, PerkinsCuthbert said:

It's at least fifteen years since I last traded Thai stocks, but this was emphatically not true for the fifteen years before that. Perhaps things have changed, but as far as I know it is perfectly possible to open a local brokerage account, transfer funds into Thailand and buy, sell and receive dividends on the local market, just as any Thai national can. As mentioned above, for most investors there is a ten percent withholding tax. 

I don't think you understood my post.

 

I am not saying that you can't open a local brokerage account, I am talking about how my local brokerage account works. When I use their online software to purchase stocks, there is a thai market and a foreign market and the price for the same stock can differ greatly (although not always).

 

Stocks on the foreign market have a suffix of '-F' on their SET symbol.

 

Stocks purchased by a foreigner in the Thai market are not eligible to receive dividends, a foreigner can only receive dividends on stocks he purchased via the foreign market.

Edited December 29, 2018 by nahkit
spelling

[PerkinsCuthbert]

6 minutes ago, nahkit said:

I don't think you understood my post.

 

I am not saying that you can't open a local brokerage account, I am talking about how my local brokerage account works. When I use their online software to purchase stocks, there is a thai market and a foreign market and the price for the same stock can differ greatly (although not always).

 

Stocks on the foreign market have a suffix of '-F' on their SET symbol.

 

Stocks purchased by a foreigner in the Thai market are not eligible to receive dividends, a foreigner can only receive dividends on stocks he purchased via the foreign market.

I reiterate, as far as I'm aware, there has been no change since I last traded on the SET; even that long ago, there were stocks suffixed with F, but neither I nor any of my fellow foreign traders bought or sold those shares, but rather bought and sold the 'regular' shares - nor were we barred from receiving dividends in the normal way. In other words, the 'F' shares can be safely ignored if you are a retail investor, Thai or foreign, and trading locally. 

Edited December 29, 2018 by PerkinsCuthbert

[khunPer]

On 12/28/2018 at 8:29 AM, utalkin2me said:

...have been looking into putting money in stocks that will pay out dividends on a regular basis.

 

I am only interested in Thai stocks by the way. Any info or options on this would be appreciated. 

Depending of what you select in your portfolio of Thai SET-stocks, you could expect from 1 percent and up to around 6-7 percent in dividend after 10 percent withholding tax.

 

Dividend is based on performane – i.e. bottom line profit – so there can be good, and not so good years. Over time dividend percentage will normally rise compared to initial buying value of the stocks.

 

In a mixed portfolio – like the one I have selected – you should be able to get around 3 percent in annual average dividend after withholding tax. On top of that the trade value of your portfolio should in long term average increase about same level.

 

Looked over long term, stocks are performing with an average outcome of 6-7 percent annually; but bear mind that there are steps on the way, both up and down, it's "long term". Selecting bonds give a smaller outcome, but also lower risk.

 

If you're not into selecting stocks, you can use so-called Fund Books – mutual funds – Bangkok Bank, and most other banks, has a nice selection. When investing in Fund Books you will have "experts" to take care of the market for you. but typically pay a provision around 1.5 percent of the portfolio value for that job. You can choose both accumulating and dividend paying funds, and also funds with tax-benefits, the latter is called LTF (Long Term Fund), and they shall be kept for 7 years. Link to Bangkok Bank's mutual funds here.

????

[nahkit]

10 minutes ago, PerkinsCuthbert said:

I reiterate, as far as I'm aware, there has been no change since I last traded on the SET; even that long ago, there were stocks suffixed with F, but neither I nor any of my fellow foreign traders bought or sold those shares, but rather bought and sold the 'regular' shares - nor were we barred from receiving dividends in the normal way. In other words, the 'F' shares can be safely ignored if you are a retail investor, Thai or foreign, and trading locally. 

"SET offers different types of shares for both local and foreign investors which are summarized as following:

 

1. Local Shares:  Both local and foreign investors can trade local shares, but foreign investors are not entitled to dividends and voting rights.
    
2. Foreign shares (stock symbols with suffix “–F”):  SET has established a foreign trading board where foreign investors can register their investment holdings and be eligible for the same benefits as local investors.  Most SET-listed Thai companies have foreign ownership restrictions.  The information on the foreign ownership restrictions in respect to each individual stock is available on SET’s website:  https://www.set.or.th/set/companysummary.do?language=en&country=US "

Taken from the SET website  https://www.set.or.th/en/trading/trade_in_set.html

[khunPer]

24 minutes ago, nahkit said:

Stocks on the foreign market have a suffix of '-F' on their SET symbol.

 

Stocks purchased by a foreigner in the Thai market are not eligible to receive dividends, a foreigner can only receive dividends on stocks he purchased via the foreign market.

I buy NVDR stocks on SET, when bought they are marked with "F"-symbol, meaning foreign owned with no voting rights, being legally above the 49% limit for foreign ownership. Buying stocks without the NVDR-option can be little problematic.

 

Foreigner's "F"-stocks pays same dividend as local owned stocks – the one-and-only difference is the voting rights – and any dividend is withheld 10% tax.

 

I'm talking from happy experience...????

Edited December 29, 2018 by khunPer
typo

[PerkinsCuthbert]

nahkit - if you buy through a broker, you will be buying through a nominee, and unless you insist upon registering the shares in your name, which in fifteen years trading I never did, there is no distinction as far as the SET is concerned between Thai or foreigner, and hence you will receive the dividend in the normal way. 

[nahkit]

3 minutes ago, khunPer said:

I but NVDR stocks on SET, when bought they are marked with "F"-symbol, meaning foreign owned with no voting rights, being legally above the 49% limit for foreign ownership. Buying stocks without the "F"-option can be little problematic.

 

Foreigner's "F"-stocks pays same dividend as local owned stocks – the one-and-only difference is the voting rights – and any dividend is withheld 10% tax.

 

I'm talking from happy experience...????

When I first set up my portfolio I purchased 'local' stocks and then after a few months I was asked to go into the brokers office and told I needed to transfer them to the foreigner market in order to get the dividends. I filled out some paperwork and was charged a nominal fee of around 200 baht. That was on a Friday afternoon and I then went off to enjoy the weekend, on the Monday morning I checked my portfolio and found it had lost around 20%! That was when I discovered the different pricing between local and foreign market. I called them and was told no problem, just come back to the office and we'll transfer them back to the local market when you want to sell.

[nahkit]

3 minutes ago, PerkinsCuthbert said:

nahkit - if you buy through a broker, you will be buying through a nominee, and unless you insist upon registering the shares in your name, which in fifteen years trading I never did, there is no distinction as far as the SET is concerned between Thai or foreigner, and hence you will receive the dividend in the normal way. 

I have never asked for the shares to be registered in my name.

[PerkinsCuthbert]

12 minutes ago, nahkit said:

I have never asked for the shares to be registered in my name.

I suggest you change your broker, it seems to me from what you say that they're giving you the run-around. I've never heard of what you describe in more than thirty years here.

[khunPer]

You don't need a broker to trade SET-stocks, you can do it online. I use for example SCB-online, easy to set up, just click on "New Client" and follow the instruction of the screen, and take the print to your local SCB-branch that will help you with everything else. Other banks presumably have similar options.

 

With an (SCB) online account you have the benefits of low trading fees when buying and selling, and no other fees, and fast transfer of money between your normal bank account and your trading account, and higher interest of any money left in your trading account than the interest in a normal bank account.

 

And any dividends are paid straight into your normal bank account.

Edited December 29, 2018 by khunPer
dividend line

[tpkhk]

Bualuang Securities is the Broker affiliated with Bangkok Bank.  The bank branches generally deal with funds (as mentioned by an earlier posted).  Bualaung HQ is in Silom Center.  They have English speaking brokers to help you get started.

 

Kasikorn has their own affiliated broker, and many other competing brokers around.

 

With regards to stocks, from what I understand, there are 3 categories.

 

PTTGC (this is for Thai citizens).  If you as a foreigner buy this, you need to send in paperwork to the broker to get it converted to -F (foreigner category) to be entitled to dividends.

PTTGC-F  (this is the category that foreigners can hold - but when you want to sell - liquidity is very limited).  The advantage is that for as long as you hold it, you may be entitled to a Thai Dividend tax credit.  This credit would be applicable for those that file Thai taxes and are in a bracket below say 30%. 

 

The broker also says it is possible to convert back...but said not recommended, and I am not sure why.  I would think one could convert to normal just in time for selling.

 

PTTGC-R (NVDR) - Non Voting Depository Rights - when you buy PTTGC via the broker/online platform, you can check a box that says NVDR.  The advantage of this category is liquidity.  You can sell freely and at prices better than the -F category - almost as liquid as the category for Thai citizens.  Receive dividends net of witholding tax.  The only disadvantage is corporate dividend tax credit is not available under NVDR.  

 

For some shares, the F category / NVDR dont exist.  There's just a single category for Thais and foreigners alike.  TLGF (Tesco Lotus Freehold Growth ~4.4% dividend is one example).  

 

Similarly, companies like PTT pay about 5-6% dividends.

 

DBS Bank from Singapore, and some others cover some Thai stocks.  If you google it, you can find their analyst reports for specific Thai stocks.  I also found some excellent threads right here on TVF.  

 

Good luck.

[tpkhk]

40 minutes ago, nahkit said:

I called them and was told no problem, just come back to the office and we'll transfer them back to the local market when you want to sell.

Thank you, good to know that it can be done.  

[Neeranam]

I use the TMB SET 50 Dividend account.

 

I worked out that I got about 18 % pa for 2016- 17, and 2017-18.

[ukrules]

6 hours ago, PerkinsCuthbert said:

I think perhaps you misunderstand due to the OP's poor wording; he seems to be talking about his options regarding ways to invest in the Thai market - not about stock options per se. That's how I read it, after some initial confusion. 

Yes, he wants to be informed of his available 'options', not trade them.

[wordchild]

Two quick points having scanned this thread:

   1) it would be very unusual for foreign registered shares to trade at a discount to local for any period of time. And I believe reports of this , on here, are due to misunderstanding. If foreign shares were trading at a discount (in any liquidity) then locals would simply buy (as they would be entitled to do) and then trade them as local ,should they wish. In fact , before the introduction of the NVDR, foreign registered shares often traded at a significant premium to local shares. As in those days foreign institutions could only buy those shares but locals could always buy either. Think of it as the same same as a condo building in which all the foreign units have been sold. A prospective foreign buyer would have to pay a premium price to attract a seller from the foreign allocation, for a local this has no relevance, they can buy either.

    2) for most Thai shares, most of the time, there should be no difference in liquidity between buying (or selling) in   NVDR form or local. In fact all your broker does is buy your shares on market in the normal way ( exactly as a local buyer) then has their back office register the shares as NVDR after the purchase. They don’t ,in fact , go into market to buy a different kind of share.

 Very very rarely the Thai custodian of a particular NVDR has determined that the NVDR holding (taken together with the foreign allocation) is too close to limit. In which case they prohibit conversion to NVDR until the % falls again. This happens from time to time in those shares popular with foreign buyers eg Bangkok Bank. In that situation foreign buyers ( who wish to have their shares correctly registered for dividend purposes) are effectively cut out ( from buying) for a period. But this is a rare occurrence for most shares, and obviously it would not affect sellers of NVDR shares. 

Edited December 29, 2018 by wordchild
Grammar

[wordchild]

i personally am not particularly attracted to Thai shares right now, just because I think there are better opportunities elsewhere. However I would say that , these days, since the introduction of the NVDR, trading and liquidity in Thai shares is not normally an issue for a foreign buyer.

Also historically Thai shares have been pretty reasonable dividend payers so it’s may well be worth the OP doing a bit of work to see if he can hunt out some gems.

[wordchild]

4 hours ago, nahkit said:

When I first set up my portfolio I purchased 'local' stocks and then after a few months I was asked to go into the brokers office and told I needed to transfer them to the foreigner market in order to get the dividends. I filled out some paperwork and was charged a nominal fee of around 200 baht. That was on a Friday afternoon and I then went off to enjoy the weekend, on the Monday morning I checked my portfolio and found it had lost around 20%! That was when I discovered the different pricing between local and foreign market. I called them and was told no problem, just come back to the office and we'll transfer them back to the local market when you want to sell.

In this case the advice from the broker was spot on: the poster was reacting to price data that was either not accurate or from a rarely traded foreign registered share. The broker correctly informed this poster that he/she should not be concerned as , if they wished to sell, they could sell to EITHER local or foreign buyers. So they would always get, at the least, the price available in the local market.

Edited December 29, 2018 by wordchild
Grammar

[wordchild]

To the OP, its probably best not to worry too much about the different registers for Thai stock ownership ie local or foreign register or NVDR. in practice you end up buying the same thing , pretty much.

If you cant buy on the foreign register (probably first choice) then you can likely buy in NVDR form (everything the same in terms of dividend but you forego any voting rights). And , as i suggested in a post above, there is no issue with selling either types in the local market (at the local price) when you wish to do so.  if you get a decent  broker as suggested by a poster above (either within Thailand or outside)   then they will guide you, once you decide what shares you wish to own.

 One important consideration is; do you wish to own the shares locally (ie with funds already in Thailand) or offshore from Thailand? There are advantages and disadvantages to both, depending on your situation. if you own the shares locally (but on the foreign register) then the dividend received forms part of your local tax calculation and, depending on your circumstances, there maybe advantages to this, eg you maybe able to claim back/offset some of the withholding tax (10%) which will have already been deducted by the company prior to paying your dividend. Note there is no (Thai) capital gains tax liability on Thai shares.  

 Personally i prefer to own Thai shares (when i own them) offshore. The tax advantage, for me ,would be pretty much zero if i held the shares within Thailand and, i prefer the security of being able to get the funds in and out of T Baht without hassle or exchange control risk. so i just assume the 10% withholding  tax when looking at any dividend yield on Thai shares.

Edited December 30, 2018 by wordchild
grammar