Vietnam seen as investment magnet as virus saps ageing Thailand

[webfact]

Vietnam seen as investment magnet as virus saps ageing Thailand 

By The Nation

 

Thiti Tantikulanan, executive chairman of Kasikorn Securities

 

Vietnamese stocks are outshining their Thai counterparts due to Vietnam’s high potential for economic growth, prominent investor Niwes Hemvachiravarakorn said on Thursday.

 

Among emerging markets, Vietnam’s equities are the most attractive for investors seeking high returns in the next 10 to 20 years, he said during a seminar hosted by Kasikornbank yesterday.

 

The Thai stock market is mature so would not move up much, while Thailand’s economy had long passed its peak, he warned. An ageing society and no technological advantages have put the Thai economy on a slowing growth path, he added.

 

In contrast, Vietnam is on the path of high economic growth once experienced by South Korea, Taiwan, Malaysia and Thailand. The Vietnamese economy has continued to expand during the virus outbreak while Thailand has suffered a sharp economic contraction.

 

However, Vietnam’s stock market is currently underdeveloped since wealthy Vietnamese prefer to make money from doing business, including manufacturing products for export. And since a high proportion of Vietnamese are young, they do not have incentives to save money for retirement. As a result, share prices and the stock index do not increase much.

 

Investors, however, can enjoy annual dividend yields from Vietnam’s listed companies of as much as 10 per cent, he said.

 

He also forecast that Vietnamese stocks will perform very well over the next 10 to 20 years.

 

Among advanced markets, he pinpointed the US as the most attractive investment destination.

 

While Thailand would see little change among big and small businesses post-Covid-19, the US has seen market caps of tech companies overtake traditional large corporates such as energy firms, he said.

 

The Stock Exchange of Thailand (SET) Index’s 15-per-cent drop this year was reasonable while shares that had recently risen would retreat in the coming years, he predicted.

 

Niwes is optimistic, however, about the global economy and expects a V-shaped recovery in the post-virus era. This was because the downturn was caused by people not working during lockdown, rather than by underlying financial woes, he said. So, when people return to work, growth will resume.

 

Thiti Tantikulanan, executive chairman of Kasikorn Securities, was also pessimistic about Thai equities. There was a high chance the SET Index would slide from its current level of around 1350, he said. He also cited uncertainty over whether a virus vaccine would be available by the end of this this year, and cautioned that any vaccine may not be effective in protecting people from the disease.

 

A second wave of infections could send the SET Index to a new low, while a delayed or ineffective vaccine may hurt global Thai equities, he warned.

 

Thai banks will not pay interim dividends this year as the central bank wants them to retain capital levels. Meanwhile property developers have cut their residential unit prices as they struggle to get rid of mounting surplus stock. It will take time before share prices in the property sector rebound, he added.

 

Kasikorn Securities advises investors to hold cash and wait for share prices to fall, suggesting that investors buy gold as a hedge against stock market volatility. Kasikorn analysts, however, still prefer equities over bonds, arguing that equities yield higher returns.

 

Source: https://www.nationthailand.com/business/30391450

 

-- © Copyright The Nation Thailand 2020-07-17

 

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[yellowboat]

5 hours ago, webfact said:

An ageing society and no technological advantages have put the Thai economy on a slowing growth path, he added.

Savings accounts pay between 6-7.8%.  Pham Ngu Lao was busy last night with local people.  It is as difficult to cross the street as ever.  No silly Thai labor laws.  Vietnam is looking like the next big thing.

 

Music to the 1%'s ears.  They hate anything that upsets their grip on Thailand.   

[hotchilli]

21 hours ago, webfact said:

In contrast, Vietnam is on the path of high economic growth once experienced by South Korea, Taiwan, Malaysia and Thailand. The Vietnamese economy has continued to expand during the virus outbreak while Thailand has suffered a sharp economic contraction.

While Thailand has gone from being the [supposedly] strongest economy to the lowest in Asia in less than a year...

who said Prayut couldn't achieve anything?

[phkauf]

8 hours ago, webfact said:

In contrast, Vietnam is on the path of high economic growth once experienced by South Korea, Taiwan, Malaysia and Thailand. The Vietnamese economy has continued to expand during the virus outbreak while Thailand has suffered a sharp economic contraction.

Exactly! Finally someone speaking the truth. He might also add that Thailand's oligopoly markets retard growth, as the established companies are less likely to innovate and compete since they effectively own the market. Vietnam while still under government control in many industries, has a very healthy competitive market not ruled by very few extremely wealthy families.

The Vietnamese are some of the hardest workers with a strong desire to create wealth. Young Vietnamese have hope for the future and see a path to success, while many young Thais have given up due to the current government and the perception the game is fixed against them. Corruption, while present, is far less endemic than Thailand, and the VN government actually does punish those it catches. 

If they were to move away from a socialist repressive government, Vietnam could easily become the next South Korea or Taiwan. While Thailand will continue to spin its wheels going from ineffective government to military coup to ineffective government. 

[Trillian]

You'll need to earn 10%, inflation in Vietnam is very unpredictable and is prone to spikes. It's similar to Laos where deposit accounts earn 7% but after one year you're out of pocket because the currency is not stable.

 

Other aspects to consider are that Vietnam has poor infrastructure and doesn't have rule of law, both essential to business.

 

https://tradingeconomics.com/vietnam/inflation-cpi

 

https://tradingeconomics.com/laos/inflation-cpi#:~:text=Inflation Rate in Laos is,3.80 in 12 months time.

Edited July 17, 2020 by Trillian

[Isaan sailor]

Another interesting comparison:

Vietnam stands up to China, while Thailand seems content to placate China, and sell them rice, rubber and fruit.

[Trillian]

8 minutes ago, Isaan sailor said:

Another interesting comparison:

Vietnam stands up to China, while Thailand seems content to placate China, and sell them rice, rubber and fruit.

Perhaps the fact that there is immense dislike between Vietnam and China has something to do with it, maybe because China invaded Vietnam and there have been order wars between them until 1990 might be a reason. 

[Destiny1990]

With all due respect but these Vietnam 50 year condo ownership rules are totally laughable !!
If you buy such VN condo then try to resell it 12 years later now who gonna buy ur resale condo with just 38 years ownership left on the title?

[1FinickyOne]

2 minutes ago, Destiny1990 said:

who gonna buy ur resale condo with just 38 years ownership left

someone who likes a bargain?

[Destiny1990]

4 minutes ago, kenk24 said:

someone who likes a bargain?

Dont buy any condo or house in Vietnam if it isn’t foreigner freehold with title deed in ur own name. They need fix their property laws firstly.

Edited July 17, 2020 by Destiny1990

[1FinickyOne]

45 minutes ago, Destiny1990 said:

Dont buy any condo or house in Vietnam if it isn’t foreigner freehold with title deed in ur own name. They need fix their property laws firstly.

I own enough property house, condo in Thai... or, rather, my wife does... I prefer our 3 rai property w/lovely gardens and no nearby neighbors... just the birds... couple of dogs, fish in the pond and a pool for some exercise... nice view too... 

 

I have no interest in buying in Vietnam... actually never been

[Pottinger]

11 minutes ago, kenk24 said:

I own enough property house, condo in Thai... or, rather, my wife does... I prefer our 3 rai property w/lovely gardens and no nearby neighbors... just the birds... couple of dogs, fish in the pond and a pool for some exercise... nice view too... 

 

I have no interest in buying in Vietnam... actually never been

How interesting, and do you prefer scrambled or poached eggs for breakfast?

[Destiny1990]

22 minutes ago, kenk24 said:

I own enough property house, condo in Thai... or, rather, my wife does... I prefer our 3 rai property w/lovely gardens and no nearby neighbors... just the birds... couple of dogs, fish in the pond and a pool for some exercise... nice view too... 

 

I have no interest in buying in Vietnam... actually never been

Seems to me that the only thing that you really own are the clothes you are wearing now ! 

[1FinickyOne]

7 hours ago, Destiny1990 said:

Seems to me that the only thing that you really own are the clothes you are wearing now ! 

sure.. maybe my computer too... homeless w/bank account - thats the goal... 

[Leaver]

It will not just be stocks in Vietnam outshining Thailand, it will be tourism also.  

[JohnBZ]

Vietnam is more unpredictable judging from its recent history: war and revolution.  Thailand is a safer bet.

 

No doubt you might get a higher return in Vietnam.  But return of your initial investment might be at risk:)

[mokwit]

On 7/17/2020 at 9:33 PM, kenk24 said:

I own enough property house, condo in Thai... or, rather, my wife does... I prefer our 3 rai property w/lovely gardens and no nearby neighbors... just the birds... couple of dogs, fish in the pond and a pool for some exercise... nice view too... 

 

I have no interest in buying in Vietnam... actually never been

Might be an idea to bookmark this thread just in case.

 

[Logosone]

So average age in Thailand is 38 and in Vietnam 30. 

 

Is that because health care is terrible in Vietnam and all the old die off prematurely thus exiting the statistics?

[KhunHeineken]

31 minutes ago, JohnBZ said:

Vietnam is more unpredictable judging from its recent history: war and revolution.  Thailand is a safer bet.

How many military coups has Thailand had since the Vietnam war?  

 

The current Thai government is akin the the government in Myanmar.   

 

Currently, I think you will find Vietnam is more stable than Thailand, and markets like stability.  

 

It's all history now, but if there was no Vietnam war, I would imagine Vietnam would be the biggest economy in South East Asia, except for maybe Singapore, and Thailand would be like Laos or Cambodia.    

 

As things stand, I think you will see Vietnam overtake Thailand in many aspects over the next 5 to 10 years and it has nothing to do with coronavirus.  

[KhunHeineken]

10 minutes ago, Logosone said:

So average age in Thailand is 38 and in Vietnam 30. 

 

Is that because health care is terrible in Vietnam and all the old die off prematurely thus exiting the statistics?

Baby Boomers after the war.  

[Logosone]

29 minutes ago, KhunHeineken said:

Baby Boomers after the war.  

Thanks, checked life expectancy in Thailand 76, and in Vietnam 75, so virtually no difference.

[KhunHeineken]

On 8/6/2020 at 12:03 PM, Logosone said:

Thanks, checked life expectancy in Thailand 76, and in Vietnam 75, so virtually no difference.

I go there often.  Vietnam is is progressing very quickly.  Thailand is still stuck in its old ways.  In the future, Vietnam will overtake Thailand in many sectors, including manufacturing and tourism.   

[Leaver]

On 8/20/2020 at 7:46 AM, KhunHeineken said:

I go there often.  Vietnam is is progressing very quickly.  Thailand is still stuck in its old ways.  In the future, Vietnam will overtake Thailand in many sectors, including manufacturing and tourism.   

Already happening for tourism.

 

http://vietnamtourism.gov.vn/english/index.php/statistic/international?txtkey=&year=2020&period=t1

 

"International visitors to Viet Nam in 1/2020 estimated 1.994.125 arrivals, increase 16,6% over 12/2019 and up 32,8% over the same period last year. 2019. Total international arrivals in 1 months reached 1.994.125 arrivals, increasing 32,8% over the same period last year."

 

A lot of these numbers would be western tourists market share that Thailand has lost to Vietnam.

[alyx]

On 7/17/2020 at 5:19 PM, Trillian said:

You'll need to earn 10%, inflation in Vietnam is very unpredictable and is prone to spikes. It's similar to Laos where deposit accounts earn 7% but after one year you're out of pocket because the currency is not stable.

 

Other aspects to consider are that Vietnam has poor infrastructure and doesn't have rule of law, both essential to business.

 

https://tradingeconomics.com/vietnam/inflation-cpi

 

https://tradingeconomics.com/laos/inflation-cpi#:~:text=Inflation Rate in Laos is,3.80 in 12 months time.

Unless one has a dollar currency account yielding 5 to 7 % the same 

[Leaver]

1 hour ago, alyx said:

Unless one has a dollar currency account yielding 5 to 7 % the same 

And unless one isn't stupid and puts all their eggs in one basket.  ????

[oompie69]

Virus" sapping " ageing Thailand? No evidence of that in daily Covid statistics, but it could be the real picture. Then again, the word choice reminds me of the oft used "spike or spiking" when Covid mortality daily stats. are presented of additional 100 or 200 deaths out of populations in the millions. Word choice and the emotional response that it is intended to create are all important I suppose. 

[Leaver]

16 hours ago, oompie69 said:

Virus" sapping " ageing Thailand? No evidence of that in daily Covid statistics, but it could be the real picture. Then again, the word choice reminds me of the oft used "spike or spiking" when Covid mortality daily stats. are presented of additional 100 or 200 deaths out of populations in the millions. Word choice and the emotional response that it is intended to create are all important I suppose. 

Thailand was "ageing" well before the virus struck. 

 

It's the same old corruption that is holding Thailand back from progressing.

 

No doubt Vietnam has corruption, but at least an amount of money gets spent that enables a project to be completed, and to a good standard, unlike Thailand.

[KhunHeineken]

On 8/21/2020 at 10:30 PM, Leaver said:

Already happening for tourism.

 

http://vietnamtourism.gov.vn/english/index.php/statistic/international?txtkey=&year=2020&period=t1

 

"International visitors to Viet Nam in 1/2020 estimated 1.994.125 arrivals, increase 16,6% over 12/2019 and up 32,8% over the same period last year. 2019. Total international arrivals in 1 months reached 1.994.125 arrivals, increasing 32,8% over the same period last year."

 

A lot of these numbers would be western tourists market share that Thailand has lost to Vietnam.

Before corona virus I noticed the airports and tourists hot spots getting a lot busier in Vietnam.  Still a lot of Russians and Chinese, but a lot more westerners and Koreans and Japanese.   

[Leaver]

On 8/6/2020 at 7:54 AM, JohnBZ said:

No doubt you might get a higher return in Vietnam.  But return of your initial investment might be at risk:)

What do you see as Thailand's risk profile, as compared to Vietnam's risk profile?  

[Barnabe]

A cutback in mass tourism with a part of it shifting to Vietnam is not necessarily bad long term for the Thai economy.
The kind of mass tourism we have in Thailand is not really sustainable from an environmental point of view, creates an undesirable dependency on tourist money (as it is evident now) and makes many places unliveable.

They can aim for a higher class of tourist, less people who spend more money or stay longer, and shift their economy into other sectors.

 

Now whether they will do this or find another way to adapt it’s another story...

 

 

Edited September 4, 2020 by Barnabe