The Sun Sets On A Golden Era For Foreign Workers In Thailand

[wintermute]

And wintermute, talking about "respected" international press, CNN's been running ads that they are the most respected news network in America. I think that kind of gives you a dose of reality about what the standards of the so called "respected" press these days.

Like I said before the Financial Times, Economist, Bloomberg, and WSJ all said similar things about Thailand's economic situation. Are you trying to say all 4 of those sources are not credible? If this is the way you feel then who is a credible source to you?

No they are credible publishers, but they are also news consumers. There are many things wrong here, from a long term development perspective, no one would deny that but the present criticism, not critiques, from these sources does presage in my mind the question why?, and why now? As is only too clear historically it is not difficult to seed articles and spin in the most prestigious of media.

Those sources have a much better chance at divulging and disseminating the information in an unbiased fashion than a country hellbent on portraying itself as impeccable and absolute in its viewpoint. Noone is saying that any news source is infallible but at least it has sources backing up its material and not government spin behind the controls.

Why for example do none of these publications make clear that the foreign business rules would be, in the main, brought into line with accepted international practice?

Is there any precedent for that actually happening? It's not just blind pessimism they are making note of the current economic and political situation and calling a spade a spade. It's about as unbiased as you get.

[LaoPo]

The Financial Times is a serious newspaper and I find the article and its content extremely worrying -for Thailand-.

Wall street Journal, Bloomberg, and the Economist have all written similar articles talking about the government's latest protectionist policies too. That's 4 highly credible sources that have all said pretty much similar things.

Like I said in a comment earlier, it's all about Greed, Power and Money amongst the Hi-So Thai elite.

I don't think the everyday Hi-so rich have a lot to do with this latest bout of protectionist sentiment. It's the much older and more entrenched elite who have been around a lot longer and have had generations of wealth passed on to them who are pulling all the strings now. The "newer" rich who gained their wealth from Thailand in the last few decades came to power through the developing economy. They know full well what the power of foreign investment can do and most of them are probably just as disturbed by the turn of events.

Maybe a few 'newer' selfmade rich know full well what's wrong with Thailand.....

But most of them are children from the same old and wealthy elite, now -still- in power or pulling the strings.

The wealthy have power (btw, that's allover the world the same) and power is addictive.

LaoPo

[Jet Gorgon]

Of course....the brilliant -financial- experts are hired by Singapore, Hong Kong and even Tokyo and Shanghai..... they just party and holiday in LOS but dont want to work there.

LaoPo[/color]

As long as I worked in the biz, nobody wanted to be based in Thailand because it looks bad on a CV, especially if you want to go back to NY or London one day. Just an unexplainable stigma.

And, sure Wintermute, you can make money in a bear market, if you are a savvy investor. Options, warrants, margin trades all make people money IF they know the market.

I will not invest in SET stocks, because of the lack of transparency. If JP Morgan (my guess is a call from a regional fund manager who will soon be sacked) is overweighting Thailand, then surely the mgr is dumping Phils, China and/or Indonesia (my guess, again; don't have access to JPM research) and needs to balance the portfolio.

IMHO, SE Asian stocks are not the place for conservative folks to park their money, because these stocks often get clamped and towed.

[ThaiGoon]

Also I remember reading a comment from a Taiwanese(or Hong Kong or Chinese I'm not sure) investor, a couple of days ago, that he's not worried about the socalled political instability in Thailand right now...because he looked at Thailand's history with this sort of thing, and there's nothing to worry about. He's still firm with his plans to invest in Thailand. I guess the Japanese are probably thinking the same thing. And I only see all these doom and gloom predictions coming from the Western journalism too. Hmmm. I wonder why.

:-P PS. I can't type...and my English is pretty bad.

Edited March 23, 2007 by ThaiGoon

[A_Traveller]

Why for example do none of these publications make clear that the foreign business rules would be, in the main, brought into line with accepted international practice?

Is there any precedent for that actually happening? It's not just blind pessimism they are making note of the current economic and political situation and calling a spade a spade. It's about as unbiased as you get.

Not sure I understand you here, but the fact is that the majority of changes within the FBA were in accordance with accepted international practice but were presented poorly. In private, many had anticipated that such changes would occur, since from '98 onwards amendments were made in a number of underpinning acts to provide such a structure in the medium term. What happened was that some elements were emphasised owing to the Shin issue. Indeed an argument could be made that some changes would be at least beneficial, if not possibly required, to meet WTO Doha requirements.

The reality here is that the present authorities, for whatever reason, seem incapable or unwilling to express themselves coherently and consistently. It is for that failure that they are paying rather than the substance of the changes. It also does not help to see some clearly playing to a single foreign based audience presumably in hope of benefit to come.

Regards

[LaoPo]

Also I remember reading a comment from a Taiwanese(or Hong Kong or Chinese I'm not sure) investor, a couple of days ago, that he's not worried about the socalled political instability in Thailand right now...because he looked at Thailand's history with this sort of thing, and there's nothing to worry about. He's still firm with his plans to invest in Thailand. I guess the Japanese are probably thinking the same thing. And I only see all these doom and gloom predictions coming from the Western journalism too. Hmmm. I wonder why.

:-P PS. I can't type...and my English is pretty bad.

I'm curious in what kind of business this Taiwanese/HK or Chinese investor is putting his money in. VERY interested!

Do you know?

LaoPo

[ThaiGoon]

Also I remember reading a comment from a Taiwanese(or Hong Kong or Chinese I'm not sure) investor, a couple of days ago, that he's not worried about the socalled political instability in Thailand right now...because he looked at Thailand's history with this sort of thing, and there's nothing to worry about. He's still firm with his plans to invest in Thailand. I guess the Japanese are probably thinking the same thing. And I only see all these doom and gloom predictions coming from the Western journalism too. Hmmm. I wonder why.

:-P PS. I can't type...and my English is pretty bad.

I'm curious in what kind of business this Taiwanese/HK or Chinese investor is putting his money in. VERY interested!

Do you know?

LaoPo

If my memory serves me right, he's in real estate. He's gonna build some highend villas(or hotels or something of that sort) in Phuket or something like that. His comment was in the artcile about the real estate development in Phuket.

[A_Traveller]

Also I remember reading a comment from a Taiwanese(or Hong Kong or Chinese I'm not sure) investor, a couple of days ago, that he's not worried about the socalled political instability in Thailand right now...because he looked at Thailand's history with this sort of thing, and there's nothing to worry about. He's still firm with his plans to invest in Thailand. I guess the Japanese are probably thinking the same thing. And I only see all these doom and gloom predictions coming from the Western journalism too. Hmmm. I wonder why.

:-P PS. I can't type...and my English is pretty bad.

I'm curious in what kind of business this Taiwanese/HK or Chinese investor is putting his money in. VERY interested!

Do you know?

LaoPo

If my memory serves me right, he's in real estate. not in Thailand he isn't, no foreigner can own real estate {land} here He's gonna build some highend villas(or hotels or something of that sort) in Phuket or something like that. His comment was in the artcile aka sales puff to talk the market up about the real estate development in Phuket.

Regards

PS he would of course be able to make a profit, assuming there was one, from the business process itself, but that's not 'real estate'

/edit add PS //

Edited March 23, 2007 by A_Traveller

[ThaiGoon]

A_Traveller, you are right. I forgot to mention that all these foreign investors in real estate in Thailand all have to look for their "local partners" before they can go ahead with their plans. This was also actually mentioned in the article. As for your ciritism about the piece, there seemed to be legit numbers presented. I don't remember everything exactly, but the thing that stood out was of all the highend properties that have been sold in Phuket, two thirds have been taken up by foreigners and the other one third by Thais. If you wanna take a look at it, you probably can google it. It's either from the Nation or Bangkok Post I'm not sure.

[samran]

I actually don't think I disagree with any of the points bought up here. I think it simply represents peoples approaches to these things on how they view Thailand. The only thing I really disagree with is saying that the PH will somehow have some sort of an edge over Thailand. Any country who's greatest export commodity is its labour force (some of whom are even coming to Thailand) needs to be worried.

From personal expereince business wise, Thailand leaves PH and Indo in the dust, and while not totally comparable to somwhere like Malaysia or Singapore, is closer economically to those places that to PH or Indonesia.

Doing business in Asia is always going to be messy. Transperency is an issue, but I think in the case of Thailand it is a matter of time before regulatory capacity catches up on the reporting and corporate governance fronts, rather than some evil attempt to keep things in the dark. The SET as come leaps and bounds in the past few years, and will continue to do so. While there is old money here, it isn't as concentrated as, say in the hands of a few oligarchic families in say Indonesia and the PH.

If you are worried about transperency, one thing another poster here once mentioned was that for many of the companies on the SET, it is a simple enough issue of just going to speaking to senior management if you wanted to understand they do for a living. I've got a very good friend working in the EU for a successful boutique funds management company who will never invest any funds unless he has spoken to the senior management and understands them. It is a simple as that as far as he is concenred. The technical analysis helps, but it is only part of the picture. Sure, the SET may not always be the best place to invest, but if you are here and interested in it, there are good companies to reasearch who do good things who wouldn't usually get the attention of the big boys.

As for the debate about the newspapers and periodicals mentioned. Yes, they are respected papers, but you know what, the fact that they have a global focus works against them on stories like this. One of my complaints about the Economist (for instance) was that its coverage of (say) Australia or any small country was usually extremely limited and never examined issues closely. I've got to say that I've totally disagreed with the Economists coverage of Thailand during the Thaksin era and following the coup. It was extremely one sided, and in my book, not well researched and alot of their analysis was based on ideology rather than a pragmatic analyis of the situation.

[ThaiGoon]

A_traveler, I just found the article. (And it's HK not Taiwanese.)

http://www.bangkokpost.com/210307_Business...r2007_biz46.php

PROPERTY / RESIDENTIAL DEVELOPMENT, CONSTRUCTION AND SALES

Hong Kong group eyes Thailand

QI wish list includes tourist resorts, villas

KANANA KATHARANGSIPORN

Having invested more than 400 million baht in Thailand's property sector since 2003, the diversified Hong Kong-based multinational QI Ltd plans to invest another billion baht this year and next in resorts and villas in tourist destinations.

..................

''We are concerned about politics. But according to history, the situation is not much of a concern, as the government comes and goes while the monarch remains,'' says Mr Eswaran.

.................

PS. I mixed it up with another piece of news about investments in Phuket. But I got the essense about the socalled political instability in Thailand is not much of a concern right.

[ThaiGoon]

I actually don't think I disagree with any of the points bought up here. I think it simply represents peoples approaches to these things on how they view Thailand. The only thing I really disagree with is saying that the PH will somehow have some sort of an edge over Thailand. Any country who's greatest export commodity is its labour force (some of whom are even coming to Thailand) needs to be worried.

From personal expereince business wise, Thailand leaves PH and Indo in the dust, and while not totally comparable to somwhere like Malaysia or Singapore, is closer economically to those places that to PH or Indonesia.

Doing business in Asia is always going to be messy. Transperency is an issue, but I think in the case of Thailand it is a matter of time before regulatory capacity catches up on the reporting and corporate governance fronts, rather than some evil attempt to keep things in the dark. The SET as come leaps and bounds in the past few years, and will continue to do so. While there is old money here, it isn't as concentrated as, say in the hands of a few oligarchic families in say Indonesia and the PH.

If you are worried about transperency, one thing another poster here once mentioned was that for many of the companies on the SET, it is a simple enough issue of just going to speaking to senior management if you wanted to understand they do for a living. I've got a very good friend working in the EU for a successful boutique funds management company who will never invest any funds unless he has spoken to the senior management and understands them. It is a simple as that as far as he is concenred. The technical analysis helps, but it is only part of the picture. Sure, the SET may not always be the best place to invest, but if you are here and interested in it, there are good companies to reasearch who do good things who wouldn't usually get the attention of the big boys.

As for the debate about the newspapers and periodicals mentioned. Yes, they are respected papers, but you know what, the fact that they have a global focus works against them on stories like this. One of my complaints about the Economist (for instance) was that its coverage of (say) Australia or any small country was usually extremely limited and never examined issues closely. I've got to say that I've totally disagreed with the Economists coverage of Thailand during the Thaksin era and following the coup. It was extremely one sided, and in my book, not well researched and alot of their analysis was based on ideology rather than a pragmatic analyis of the situation.

[A_Traveller]

A_traveler, I just found the article. (And it's HK not Taiwanese.)

http://www.bangkokpost.com/210307_Business...r2007_biz46.php

PROPERTY / RESIDENTIAL DEVELOPMENT, CONSTRUCTION AND SALES

Hong Kong group eyes Thailand

QI wish list includes tourist resorts, villas

KANANA KATHARANGSIPORN

Having invested more than 400 million baht in Thailand's property sector since 2003, the diversified Hong Kong-based multinational QI Ltd plans to invest another billion baht this year and next in resorts and villas in tourist destinations.

..................

''We are concerned about politics. But according to history, the situation is not much of a concern, as the government comes and goes while the monarch remains,'' says Mr Eswaran.

.................

PS. I mixed it up with another piece of news about investments in Phuket. But I got the essense about the socalled political instability in Thailand is not much of a concern right.

Thanks for that, it's an interesting read and is also a puff piece, not unreasonably, for QI. By the by the guy is Malaysian and takes the view that "Laws by themselves are not as important as their implementation." Hm... wonder what he means by that...

Regards

[ThaiGoon]

Thanks for that, it's an interesting read and is also a puff piece, not unreasonably, for QI. By the by the guy is Malaysian and takes the view that "Laws by themselves are not as important as their implementation." Hm... wonder what he means by that...

Regards

If all the foreign investors had seen things the same way he does, perhaps there wouldn't have been that much of an outcry about the amendment of the FBA.

[GuestHouse]

I have yet to see evidence that major international companies are having any difficulty doing business in Thailand.

The posturing of corporations issuing statements and threatening withdrawal or even withdrawing is all part of the political commercial game.

A change of government, a shaky economy a shaky political leadership, all examples of a opportunity for big business to re-negotiate the terms under which they are doing business.

As for 'Investing Tens of Billions and then withdrawing'.

It matters not if it is tens of billions or a few tens of thousands, sound investment is based on balancing risk. - That is if tens of billions have actually been invested. It's all part of the political commercial speak, no different than corporations do back in the west when they want a better deal.

How many times have you seen the news back home announcing investment in your region of tens of millions, only for the news to die down and nobody notice that only a fraction of the investment ever arrived.

The big mistake is to invest money in Thailand that you can't afford to loose.

That has always been true and always will be true.

Oh and that thing about foreign land ownership.

That's always been illegal, if anyone ever told you different address you wrath to them. Certainly in the discussions on land ownership here on TV there have been constant reminders of the illegal status of foreign land ownership.

Thing is people believe what they want to believe.

Just like they believe Thailand needs them and their money.

As for the bleeting of a foreign stock broker.

Does anybody believe that if the big international stockbrokerages want to do business in Thailand they have any difficulty getting permission and visas to do so.

Just because we might want Thailand to need us, does not make it so.

[A_Traveller]

Thanks for that, it's an interesting read and is also a puff piece, not unreasonably, for QI. By the by the guy is Malaysian and takes the view that "Laws by themselves are not as important as their implementation." Hm... wonder what he means by that...

Regards

If all the foreign investors had seen things the same way he does, perhaps there wouldn't have been that much of an outcry about the amendment of the FBA.

On that I'll not disagree and as Guesthouse says there a great deal of posturing going on here.

Regards

[duke69]

my 2 penny:

- Toyota, Samsung and other giants have nothing to worry.....a corrupted junta will always help them and use them as example

- the risk is on medium small foreign owned business

- the economy of Thailand is growing thanks to the small foreign investments, Toyota looks for cheap factory workers and the management is fully jap, english or australian

- Banks and foreign investments are retiring from Thailand, destination China

- Bank sys in Thai is crap

- laws are uncertain and left to the bribeapplication way

HERE WE ARE TALKING ABOUT BUSINESS, LAWS, .....I understand that some of you enjoyed 9 or more years of hide from European or US mediocrity with a small western pension which in Thai makes you a king...... but the point is about business, investments, economy, macroeconomy ......if your whole view is the cost of a beer and a chick ...... then the junta will only lower both of them in the long run.....just wait everyone moving the economy of this country to leave.

what about the Thai entrepreneurs? Eaten alive by their incompetence, protectionism and other countries laws to compensate what the junta is doing domestically

Everybody wants and bla bla bla about quality tourism.....no backpackers, no sex tourists, no budget tourists ...... yes another bunch of blabla, let's feed this nation of 60mill with quality tourism$$ and the generousity of Thai monopolists billionaires...

Edited March 23, 2007 by duke69

[bendix]

Guesthouse. Please stop talking sense. It's much better reading to listen to wintermute's miserable bleating.

From the business my work is doing at the moment, there is absolutely no levelling off of interest in Thailand as an investment destination. We are involved in god-knows-how-many large international M&A transactions and we're working with a heap of multinationals seeking to either establish or enhance their operations in Thailand. The whining's of one disaffected farang stockbroker widely publicised in the FT is about as reliable as - well - the private anti-weird farang musings of a Bangkok Bank senior official.

Political instability notwithstanding, Thailand is still an attractive place to do business, to make a half-decent living if you have an IQ around the size of an english teacher's average bar bill, and a wonderful place to visit.

What people perceive as anti-farang sentiment is no more than simply tightening up some much exploited loopholes which - frankly - brings Thailand pretty much in line with most of the rest of South East Asia. Big deal. Get over it people. Your free-ride is over, and about bloody time in my opinion.

Will the thai economy suffer as a result of this ill-informed and lazy reporting (did anyone see BBC news this morning, highlighting that farang's now can't jump through legal loopholes to buy land?)? Yes. Probably. What a shame, never mind. Isnt that what you all want, anyway? It will mean a weaker baht and more buying power for your holiday money and pensions.

As for JP Morgan's recommendation to 'overweight' in Thai stocks. Well, frankly, that makes a lot of sense. The SET has virtually missed out on the Asian stock boom of the last couple of years and its PE ratio is very low compared to most similar markets (check last week's Economist article on Vietnam stocks). As such, it is due for a rally and dividend yields are very high. JP Morgan's advice makes perfect sense.

[cclub75]

Seems to me the author just wanted to throw everything in the article to make Thailand look worse than it really is. I wonder what this author thinks about the recent upgrade on Thai stocks by JP Morgan from "neutral" to "overweight." JP Morgan is clueless unlike the author of this FT article I suppose.

I believe you answered the question.

Yes JP Morgan is clueless.

Remember Thaksin era ? How was the "perception" of his policies ? Pretty good within western medias.

Those financial analysts are the same that were saying in march 2000 : "no problem. Buy Internet stocks. It will continue to go up"...

They are stupid : looking at some "fundamentals", compiling some massaged statistics provided by local governments and institutions... Cooking up some brillant conclusions ! And voila ! Serve it hot at the table of CNBC. Bon appetit...

For them Thailand is located in Asia, Asia is booming with Big Brother China, therefore Thailand will follow.

Other journalists try to go a little bit deeper.

Forecasts about the thai economy have to be related to politics, culture, the social structure of the country, its history, its people etc.

I think things are little bit more complicated than Price Earnings Ratio at the Thai Stock Exchange...

[ThaiGoon]

http://www.bangkokpost.com/Business/24Mar2007_biz40.php

JP Morgan: SET could rise 100 points

PARISTA YUTHAMANOP

The Stock Exchange of Thailand index could reach 776 points by the end of the year, up 100 points from current levels, thanks to cheap valuations and increased public spending and consumption, according to the US investment bank JPMorgan. Adrian Mowat, JPMorgan's chief Asian and emerging markets equity strategist, said that the strengthening baht, coupled with lower interest rates, would be a boon to consumption-related stocks.

.....

Mr Mowat said current economic conditions in Thailand resembled those in Korea in 2004. A strong won and low interest rates led the Seoul bourse to outperform Asian stock markets.

JPMorgan bank expects the SET's median earnings per share to grow 4.3% in 2007 and 11.5% in 2008, compared to a 16.5% average for other emerging markets in this year. The SETs valuation is expected to be attractive at an estimated 9.6 times earnings in 2007.

''While we can buy export stocks in any emerging market, we think consumption and infrastructure-related stocks here would give high value. The strong currency will accelerate consumers' pent-up demand,'' Mr Mowat said in a briefing yesterday in Bangkok.

He expects earnings prospects to remain bleak in the first quarter of this year, but earnings of medium-capitalisation stocks are expected to turn around during the fourth quarter of 2007 and the first quarter of next year.

....

''The Thai economy has one of the strongest fundamentals in the region, with one of the lowest P/E ratios in the market. But investors have not woken up to it,'' said Mr Mowat.

He said agricultural commodity prices were expected to remain strong this year and shore up consumer power in provincial areas.

The strengthening baht will force exporters to upgrade their production, but it could affect new employment in the sector in the medium term.

.....

He believes the strong baht will not affect the country's overall export performance. About 45% of exporters use high-technology production dependent on imported raw materials.

[BAF]

My intuition tells me that Mr. Greenwood is far more resentful over changes in the dancer's dress code of his favorite watering holes at Soi Cowboy than in changes in the business environment. The golden age is over. I'm sure he's investigating Venezuela and Brazil!

WOW, what a powerful intuition you have got there. I'm impressed.

Do you also dream about lottery numbers?

[qualtrough]

The big mistake is to invest money in Thailand that you can't afford to loose.

Guesthouse, you write this quite frequently. What does it mean? Are there countries where someone should invest money they can't afford to lose?

[Gary A]

Guesthouse, you write this quite frequently. What does it mean? Are there countries where someone should invest money they can't afford to lose?

-------------------------------------------------------------------------------------------

Guesthouse is simply reminding people of the golden rule. If you want to buy a house or property in Thailand you shouldn't spend more than you can afford to walk away from. Unfortunately that has been proved time after time and people STILL ignore that fact.

The country you should invest money that you CAN'T afford to lose should be your own home country. If I were to lose the money I have in my home country, I would certainly be ruined. If I were to have to leave Thailand tomorrow, I wouldn't miss any meals. I wouldn't be happy to walk away from what I have accumulated here but I could leave without being suicidal.

[xbusman]

Well, wait a second. As a US citizen I would be very comfortable investing more than I could walk away from in any EU country. Add to that huge possibility Canada, Iceland, Australia, New Zealand, Japan, Aruba, and anything under UK jurisdiction makes for a mighty big place to park money you cant walk away from. In any one of those countries, if you play by the rules, you have a fair shot at prevailing in any dispute.

The rule is more succinctly, dont ever put more money in a third world country than you can walk away from. Third world here is loosely defined by an absence in the rule of law, usually run by a junta of some sort. In my opinion, that would include countries like Russia that while not considered third world have a ruling party and lack of codified and enforcible laws.

[dgoz]

Good article!

“This is the worst time for foreigners in recent memory. Thais have every right to turn away ruffians, but the people in charge now don’t seem to understand that without foreign knowhow this country is going to have a very hard time."

No <deleted> Sherlock.

Not exactly stating something we don't already know.

Edited March 26, 2007 by dgoz

[Prakanong]

"Of course....the brilliant -financial- experts are hired by Singapore, Hong Kong and even Tokyo and Shanghai..... they just party and holiday in LOS but dont want to work there."

I am not in finance but in IT and pals are Dr's here etc and the sentiments above reflect our views - my pal owns 2 condo's in Bangkok but only goes there for weekends now.

I could probably have had this role based out of Thailand and would have crawled across broken glass to have done so say 8/9 years ago.

I still love the place and visit very often but prefer to work elsewhere and holiday in Thailand. Retirement is a good few years away and Thailand is still on my list bit not the 100% certainty it once was.

Edited March 26, 2007 by Prakanong