One of Thailand's oldest funds is pulling out of the market

[SCOTT FITZGERSLD]

Franklin Templeton has announced its intention to merge its Templeton Thailand Fund into the Templeton Asian Growth Fund with effect from 13 December 2019.

Reason for the merger

Following a review of its Templeton Thailand Fund ("the merging fund"), Templeton has decided to merge the fund with its Templeton Asian Growth Fund ("the receiving fund"). It has explained the reason for the merger is that Thailand’s economy faces several structural challenges, including a high household debt and rapidly aging population, which its Board believes could dampen long term growth and reduce the opportunity set for investors in Thai equities. Comparatively, it believes the Asia ex-Japan region provides a larger opportunity set, with several economies benefiting from stronger structural tailwinds than Thailand and thus more attractive growth potential in the medium to long term.

[bkk6060]

Not really pulling out of the market but merging it with a larger fund.

I agree with it many other parts of Asia will see faster growth then Thailand in the future.

[Logosone]

Does everyone remember the 1980s? When they said Japan will take over as the world's leading economic power?

 

I don't know for how many decades I've now heard that Indonesia's economy will be a world beater. 

 

None of this has happened. The Asian economies have always flattered to deceive and never truly realised their full potential.

 

One has to wonder if investing in Asia makes as much sense as it appears to.

[SCOTT FITZGERSLD]

1 minute ago, bkk6060 said:

merging it with a larger fund.

it's a polie way to say pulling out of the market, or reducing

substantially their investments.

they have been here for 21 years and didn't get ahead much.

the whole thai economy is like a medium american company, only moving

one third of the speed.

[SCOTT FITZGERSLD]

Just now, Logosone said:

never truly realised their full potential.

that's because they don't have any potential.

[Logosone]

They have been here for 21 years and didn't get ahead much.

 

It's been the same with many top law firms that have opened in Asia and closed their Asian offices. With the exception of Hong Kong that fed off China, not much money to be made in Asian offices like Hanoi, Jakarta, Bangkok et al.

 

that's because they don't have any potential.

 

Just by virtue of their market size places like Thailand and Indonesia have massive potential. Philippines are held back by catastrophic weather events. Thailand and Indonesia are not.

 

The spectacular development of places like Thailand and Indonesia has certainly raised hopes that such potential fulfillment can be fulfilled. 

 

But it hasn't happened for decades. Why?

[tjo o tjim]

15 minutes ago, Logosone said:

But it hasn't happened for decades. Why?

Pick a label for it- corruption, self-dealing, maintaining the status quo of social order.  It is all essentially the same effects.  
 

Outside companies really need a huge edge to succeed here, beyond catering to a major client “back home.”  Market forces commoditize most service and manufacturing, and the inherent inefficiencies (see also above...) mean that there is never enough margin to grow to a healthy point to fend off competitors. 
 

What works is smaller, more nimble companies that can work under the radar.  These companies create local success, but do not dominate GDP growth.

 

I would guess that Thailand and Indonesia need to invest tremendously in education and critical thinking skills, over a 50-year horizon, to properly position themselves going forward.  That isn’t really something that powerful people are clamoring for.

[Logosone]

1 hour ago, tjo o tjim said:

I would guess that Thailand and Indonesia need to invest tremendously in education and critical thinking skills, over a 50-year horizon, to properly position themselves going forward.  That isn’t really something that powerful people are clamoring for.

 

I think education is major factor as well. In Thailand it looks like the elite send their kids to good schools where they learn English and all the rest. However the VAST mass of people do not have the opportunity to go to expensive private schools and by all accounts the local state schools are abysmal.

 

Another factor seems to be the apathy, the inclination to do nothing. Despite a huge police force Thailand's police does literally nothing to enforce traffic laws. Despite record deaths on roads each year. It is this inclination to do nothing that seems to stifle any laudable attempt to create projects to allow these countries to fulfill their wonderful potential.

[drguid]

Old news but Franklin Templeton had a disastrous 2019 so I sold out of all their funds.

 

Correct me if I'm wrong but they said at the time that they were bearish on Thailand due to an aging population.

 

I'd be more worried about the morbidly obese population. I went for an interview at a Bangkok school and a good portion of the kids were fatter than I am.

[CGW]

On 3/5/2020 at 8:45 AM, Logosone said:

One has to wonder if investing in Asia makes as much sense as it appears to.

Indeed, look at India - has the potential to be the biggest market in the world, never come any where near fulfilling its potential nor is it likely to in the near future.

[BigStar]

On 3/5/2020 at 8:45 AM, Logosone said:

One has to wonder if investing in Asia makes as much sense as it appears to.

Your post is written from a simple buy-and-hold the market. That's a bit like playing the casino when it comes to the NICs. Investing in individual companies, however, can make excellent sense if you're astute.

 

However, the NICs have always been good, and still are, for buying low and selling high because they're so volatile. Buying on the way down and selling on the way up works well with them.