SET

[spornb]

Looking for advice on Thailand SET Especially the stocks that will do best next year

 

Which are best brokers, and easiest to use

 

Looking for reading matter or websites covering SET

 

Considering bringing investments into Thailand, so easier for wife when I die

[wordchild]

Really quite a fair bit on this subject on  here already, much of it I am sure is still relevant. Worth doing a search.

 One thing you might need to consider is “ bringing in” the funds to Thailand to invest. Eg you can invest in Thai stocks from offshore without bringing in funds to country. You could, say , set up an account for you and your wife in Singapore and invest from there. Personally I would also consider investing more widely in the region rather than just focus on Thailand.  Maybe better for her also in the long term. 

Depending on you and your wife’s personal circumstances there are pluses and minuses whatever you do and you should consider these carefully.  

Also something to consider is that , As an expat , some Thai brokers are able to set up special accounts which are hybrid ie the funds remain offshore and invested in Thai stocks , the benefit is you can get your/her money out when you want. However there are also some tax issues to consider both ways here, eg as an offshore owner you cannot reclaim or offset Thai dividend withholding tax (10%)

[wordchild]

personally, i dont much like the Thai stock market right now; for me  Singapore/HK  stocks offer a better combination of quality and value.

Having said that, i think the Thai mobile sector might be worth a look. While future spectrum costs are an issue, the door is now pretty much shut for any future (serious)  competitors. So we will have a significant market of only 3 major players. DTAC, Advanc and True. Having had a difficult 2/3 years Total Access (DTAC) is showing signs of recovery and the shares are cheap. AIS (ADVANC) is still probably the best long term bet, reasonable dividend yield and a medium/long term prospect that Sing Tel will buy out the remainder of the shares it does not own, once the Thai Govt allows. An interesting way to play AIS is to buy shares in Intouch (INTUCH) which is the holding company that owns just over 40% of AIS. It effectively gets you into AIS at a very significant discount (plus ownership of some other assets). They pass the AIS dividend straight through to their own shareholders so you end up with a better dividend yield (5.5% plus) than in owning AIS directly.      

[spornb]

Thank you wordchild I appreciate you comments and will look at what you suggest in detail, Israel is similar on telecoms only small number of players, although I am out of touch on that one

 

Have been the Singapore route, in the end the bureaucracy and other problems after two years went back to my longterm broker International brokers

 

At present all in an account with them IB in joint names and goes to survivor on death of the first

 

Problem arises on death, with wife who speaks reasonable English, but can not write or read and is not computer literate, IB is the true online no paper, no office broker

 

I have come to the conclusion, sadly, that control needs to be in Thailand, capital gains for Thais on the SET is not taxable

 

Money in the bank gives too low return, also mutual funds do not like charging structure

 

My plan at the moment is in the next 18 months bring the funds here and invest in a small number of stocks maybe no more than eight, at present I own 6

 

I like ETFs but not available here

 

My wife now has a SCB trading account, which holds SCB Bank and Bangkok Bank

 

I am NOT an American citizen so do not get caught by some of their regulations, I have been married ten yrs, and trust my wife who is 30 yrs my junior

 

Further problems I would trust no financial adviser, lawyer or accountant in Thailand

 

So I am going to have to try and set something up that will run on autopilot or until spent, with reasonable returns there should be enough for her lifetime but not a lot to spare

 

I am pretty well structured so as to be free of probate issues globally

 

I am not a well man and when I die there will be no one to help my wife, the assets involved whilst can give a comfortable life do not warrant trust worthy people from overseas, the fees would kill that option

[wordchild]

In my experience, unlike much else in Thailand, the Thai stock market and also the major Thai brokers operate to pretty reasonable ethical standards.  I just feel that ,right now , the Thai stock market ( and the baht) is a bit overvalued, certainly compared to our neighbors in, say Singapore. 

I understand something of your situation and your desire to provide long term for your wife. I guess you want to give her a level of income and some potential for growth. I would just suggest that it may not be right to limit your thinking just to Thailand. For example you could use a Thai broker to invest in international as well as Thai stocks on your behalf.

i think, from what you said , you have 2 basic choices, 1) You switch your portfolio to managed funds, of some sort, say bought via a Thai broker and in your joint names so they will revert to your wife on your death. 2)  Or you invest in a portfolio of 8/10 “ never sell “ stocks which you believe will retain value and, maybe grow a bit, over the next 30 or so years.

As I mentioned above a couple of the main Thai brokers offer hybrid accounts to International investors where the funds/ investments originated from outside Thailand. Through them you can invest globally (availability of markets varies) and also invest locally  in Thailand. The investments are held via Global Custodians ( eg Citi or J P Morgan).  This type of account may fit your situation. Asia Plus I know offer this sort of account and also have a pretty good reputation.

 Good Luck 

 

Edited January 13, 2019 by wordchild

[AtoZ]

What about 1DIV ETF? Tracking high dividend payers SETHD. While the expenses ratio is high - 1%, the yield is 9% = 8% net.

 

https://www.bloomberg.com/quote/1DIV:TB

 

That's actually more than if you follow SETHD by yourself - 5.7% is average now http://siamchart.com/stock/SETHD

 

Actually I don't know how they can provide so much higher yield...

[wordchild]

I dont know either, especially when i look at the largest holdings in the fund PTT,Advanc etc none of which , individually,  have anything like that kind of yield.  They are either using leverage in some way (though the fact sheet i read said the fund does not use leverage) or, they are paying out capital from the fund in addition to the income. Worth checking it out with whichever broker you are going to use. 

[wordchild]

24 minutes ago, wordchild said:

I dont know either, especially when i look at the largest holdings in the fund PTT,Advanc etc none of which , individually,  have anything like that kind of yield.  They are either using leverage in some way (though the fact sheet i read said the fund does not use leverage) or, they are paying out capital from the fund in addition to the income. Worth checking it out with whichever broker you are going to use. 

Having looked again at the fact sheet, the fund quotes the underlying yield of the portfolio as 4.1% which looks about right. However dividend payments to unit holders are paid out of retained earnings (which includes capital gain). This will mean dividend payments will vary over time and the asset value of the fund will be impacted in the long term.

 The history of dividend payments , as far as i can see, is

2012=41; 2013=zero;2014=43;2015=23.3;2016=45;2017=93;2018=100.

since launch the net asset value of the fund has  grown very slightly  (around 8 %) but over the same period the SET 50 index is up around 37%. so basically it looks like the fees and the extra dividend are being paid out of assets.  so you may get periodic generous dividend payments but dont expect much growth.   

Edited January 14, 2019 by wordchild

[AtoZ]

1 hour ago, wordchild said:

Worth checking it out with whichever broker you are going to use. 

I haven't invested in SET yet. Just slowly researching as I consider it in the near future. Having some income generating assets to limit potential future (10+ years) THB appreciation.

 

But as yourself, I don't believe the current THB strength makes sense.

 

OK... UK, EU, AU all have own issues. But even countries like Denmark, Vietnam (and you could find ton of other) have way stronger economy than Thailand the past 5 years, have stable business environment, are not under criminally corrupt army leadership and yet, their currencies lost quite a bit vs THB. 

Edited January 14, 2019 by AtoZ

[spornb]

But as yourself, I don't believe the current THB strength makes sense

 

A very big element of element of decision on where to invest, is related to where you plan to live and in what currency you want to finally draw down eventually, from my point of view I will die here in Thailand; and my wife would never leave I doubt even if she remarried, I am trying to leave her secure income of around $30,000 pa; I do not want to get involved on the discussion on what she can survive on, together we need the equivalent of about $40,000, some of which comes from my UK govt pension the rest from global investments, we live modestly by my lifetime standards

 

In some ways there can be less risk matching requirements and investments in the currency of where you live

 

I still like residential property, at the moment we may be sat on a sizeable gain of around 700% over nine years on residential property if that can be realised ( and we are trying at the moment) the problem becomes easier or more difficult depending on which way you look at it !

 

The economy of Thailand is remarkable, the amount of building and construction that has been going on for the last ten years is very significant and continues to be so, unemployment is very low, social security and benefits are also negligible, compared to western countries, I wonder about the amount of debt to China and other world countries, I am a little concerned the Chinese do not take over the economy, but believe Thailand is safer than maybe Cambodia from this risk.

 

If, I were not going to be here for the rest of my days with limited life expectancy, and wanting to provide for a Thai wife I would not consider Thailand for investment, what I may put in here will never be wanted outside Thailand, the risks could be too great

 

 

Earlier in this thread investments out side Thailand were mentioned, and Yes a Thai can through brokers like SCB invest in US securities, but the capital gains are subject to CGT here, (unlike the SET, that is tax free) I do still like Warren Buffets recommendation, one or two USA ETFs, nothing else, and if my wife were capable of reading and writing English, and fully computer literate, that is without any doubt what I would do, but unfortunately not an option

[wordchild]

2 hours ago, spornb said:

But as yourself, I don't believe the current THB strength makes sense

 

A very big element of element of decision on where to invest, is related to where you plan to live and in what currency you want to finally draw down eventually, from my point of view I will die here in Thailand; and my wife would never leave I doubt even if she remarried, I am trying to leave her secure income of around $30,000 pa; I do not want to get involved on the discussion on what she can survive on, together we need the equivalent of about $40,000, some of which comes from my UK govt pension the rest from global investments, we live modestly by my lifetime standards

 

In some ways there can be less risk matching requirements and investments in the currency of where you live

 

I still like residential property, at the moment we may be sat on a sizeable gain of around 700% over nine years on residential property if that can be realised ( and we are trying at the moment) the problem becomes easier or more difficult depending on which way you look at it !

 

The economy of Thailand is remarkable, the amount of building and construction that has been going on for the last ten years is very significant and continues to be so, unemployment is very low, social security and benefits are also negligible, compared to western countries, I wonder about the amount of debt to China and other world countries, I am a little concerned the Chinese do not take over the economy, but believe Thailand is safer than maybe Cambodia from this risk.

 

If, I were not going to be here for the rest of my days with limited life expectancy, and wanting to provide for a Thai wife I would not consider Thailand for investment, what I may put in here will never be wanted outside Thailand, the risks could be too great

 

 

Earlier in this thread investments out side Thailand were mentioned, and Yes a Thai can through brokers like SCB invest in US securities, but the capital gains are subject to CGT here, (unlike the SET, that is tax free) I do still like Warren Buffets recommendation, one or two USA ETFs, nothing else, and if my wife were capable of reading and writing English, and fully computer literate, that is without any doubt what I would do, but unfortunately not an option

Actually if you open an international or hybrid account (mentioned above) with one of the major Thai brokers then dividends and gains from international investments need not be subject to Thai tax. The reason being that the investments are not held within Thailand,  but are held outside the country via Global Custodians , for international stocks, and held inside Thailand for Thai stocks.

Funds can be transferred into Thailand, when required ,(from dividends or share sales) with the usual proviso regarding tax ie you should bring in earnings only from prior tax years (many people transfer in during the first few days of January to avoid issues).

Thai or foreigner nationals  can open this type of account and it has become an increasingly popular way for Thai nationals to invest overseas. However if you are a Thai national, and the funds originated in Thailand, then you can only transfer cash out of the portfolio to an onshore Thai bank account (under Bank of Thailand rules). As a foreigner, you are free to instruct transfers to a bank outside Thailand.  

Not all Thai brokers offer this kind of account so you need to check.

  

Edited January 15, 2019 by wordchild

[spornb]

55 minutes ago, wordchild said:

Actually if you open an international or hybrid account (mentioned above) with one of the major Thai brokers then dividends and gains from international investments need not be subject to Thai tax. The reason being that the investments are not held within Thailand,  but are held outside the country via Global Custodians , for international stocks, and held inside Thailand for Thai stocks.

Interesting not what I was told by SCB brokers when I asked, if my wife held US stocks outside Thailand, would she pay CGT, and told definitely

 

I trust little information I get from Thais in Thailand

 

I also asked if I could do an inspecie transfer to an account outside thailand to a sole account in her name VIA SCB and told have to sell US stocks send them US dollars, that they convert to Thai currency then buy US dollars and buy us stocks, I said too expensive to many currency losses

 

I have been working on this in various ways for maybe five years

 

I appreciate the input

[wordchild]

I  think that SCB would not be considered a top Thai broker, though obviously its a large bank, worth talking to some others on this, i would say. Also if you did want to ever invest internationally then you need a broker with the network (or 3d party links) capable of doing this. Personally I have never heard SCB mentioned in any discussion , including with Thais, about brokers that they use for international investing.

I am not Thai but I live, work and pay tax in Thailand. For a number of years (but not now)  i had an account with Asia Plus for Thai and international investing. I am very careful about such things and i went into the tax situation in some detail both with them and my own Thai tax adviser. All i can say is that, for me then, the tax treatment for my international investments was as i described above. I also know a couple of Thai nationals who invest internationally. From them i learned that the tax treatment was the same for them as for me. However for Thai nationals there are some Bank of Thailand imposed restrictions, in using such an account, the main one being  that cash realized from the fund (if not held for re-investment) must be brought back into Thailand and not transferred overseas.  

I dont really know anything about SCB stockbroking , but from my experience competence and knowledge varies greatly across the spectrum of Thai brokers.   

On your point about making an in specie transfer to an account outside Thailand (for a Thai ) my guess is that SCB are probably correct about this. I have heard, in the past , about issues Thai nationals have transferring assets out of Thailand.    

Edited January 16, 2019 by wordchild

[wordchild]

https://inv4.asiaplus.co.th/asps/upload_editor/images/Global/Offshore Investment Eng (rv 23Aug18).pdf this is the link to Asia Plus with a description of this type of account. Paragraph 4.3 confirms what i said above about the Thai tax situation. 

Edited January 16, 2019 by wordchild

[scoutman360]

It is a complicated question, and the answer is just as complicated. For example, I am an American living in Thailand more than 15 years. I have stock investments in both countries. In general, my American investments have out-performed my Thailand stock investments (mostly mutual funds). I really don't understand why, but that is another subject. Sometimes Thailand stocks do extremely well, better than U.S. stocks. But you must also factor in other equations such as your living condition, the need for the money, the exchange rate at the time you take the money, especially.

[mshs]

On 1/14/2019 at 10:14 PM, spornb said:

A very big element of element of decision on where to invest, is related to where you plan to live and in what currency you want to finally draw down eventually, from my point of view I will die here in Thailand; and my wife would never leave I doubt even if she remarried, I am trying to leave her secure income of around $30,000 pa; 

 

The economy of Thailand is remarkable, the amount of building and construction that has been going on for the last ten years is very significant and continues to be so, unemployment is very low, social security and benefits are also negligible, compared to western countries, 

 

If, I were not going to be here for the rest of my days with limited life expectancy, and wanting to provide for a Thai wife I would not consider Thailand for investment, what I may put in here will never be wanted outside Thailand, the risks could be too great

 

 

Earlier in this thread investments out side Thailand were mentioned, and Yes a Thai can through brokers like SCB invest in US securities, but the capital gains are subject to CGT here, (unlike the SET, that is tax free) I do still like Warren Buffets recommendation, one or two USA ETFs, nothing else, and if my wife were capable of reading and writing English, and fully computer literate, that is without any doubt what I would do, but unfortunately not an option

I would suggest a trust (revocable/irrevocable) which avoids probate and also would protect you in the event you survive your wife.

It is a good practice to add a spendthrift clause to the trust.

 

For ETFs you could consider Jack Vogle's (RIP) S&P 500 listed in Hong Kong as 3140.HK 

No CGT in Hong Kong and a rock-solid peg (as Soros painfully learnt 2 years after the Asian Financial Crisis) to the USD.

The other ETFs are https://www.vanguard.com.hk/portal/mvc/investments/all-products

Unfortunately, the fees are high (compared to the 0.04% in the USA) and the liquidity is extremely low. 

 

Whatever the current status of the Thai economy and the THB, it could change in a flash, it is a 3rd world country after all.  Even the GBP lost ~30% in a matter of months in 2007/8 during the GFC.

 

The othe

https://www.vanguard.com.hk/portal/mvc/investments/all-products