Investing In Thailand?

[sbk]

Do you have any faith in the Thai stock exchange? Who dabbles in it? Or other methods of investment here like gold or bank deposits? Are there any higher interest earning options in Thai banks?

[BEENTHEREDONETHAT]

Never done well in the stock market, so I stick with property (condos). You do have to be patient in choosing the best time to sell though.

[wordchild]

I am an investor in a number of Thai stocks, the market is pretty well regulated and there are a reasonable spread of businesses to invest in. one major attraction is that Thai companies tend to pay investors( in dividends) a high proportion of profits by international standards. the yield available is therefore quite high and it is not difficult even now to find stocks that will provide a dividend yield of 7%+.I would stay away from the bigger stocks as they tend to be fully priced esp now as the market is up 40% or so since the red shirts invaded Pattaya . It is well worth doing the work on some of the smaller and mid-sized stocks and it can be very rewarding.

[Misty]

Hi sbk,

I agree with wordchild on several points. The level of regulation and transparency for SET-listed companies has improved immensely over the years. There are definitely some good quality and well-managed companies, and these can frequently be purchased at a very reasonable price.

That said, SET is a small and inefficient market, and share prices are extremely susceptible to capital flows (both local and from abroad). The timing of these capital flows are not predictable. Share prices can become completely illiquid when capital flows dry up--so getting out at a fair price is sometimes impossible. So if you are going to try your hand at stock-picking, you'd want to 1) spend some time learning what fundamentals drive share prices, 2) really do your homework on what you purchase, and 3) have a long term horizon (over the long run it's fundamentals that drive individual share prices).

Being a speculator (relying on short term market psychology to give you returns) is a losing game over the long run--and yes I know there are short-term traders out there who will tell you they've made wonderful returns in the short run, but precious few will have wonderful returns over the long run (if they're honest, and know how to keep track and account for all the costs of their trading, including their losses, opportunity costs, and time). Trying to make money speculating over the short-run is like going to the casino--luck plays a huge part. While it can be fun to play with small amounts, this is not to be confused with investing.

If you don't have the time to spend to learn about stock fundamentals and follow individual companies, or if you can't afford to lose some money as you start investing and make mistakes, you might consider hiring a professional (in the form of investing in a Thai mutual fund). In developed markets, generally active fund managers don't produce the long term returns to justify their fees, but in an inefficient market like Thailand, some can and do. There's at least one asset management company out there that has a philosophy similar to Warren Buffet's--and has an impressive long term record after fees, too. (Just to clarify: I absolutely do not work for them in any way!) If you have any interest, please PM me and I can send you a link to their website. There may be others worth checking out as well. Here's a general list of the licensed fund management companies :http://www.aimc.or.th/en/14_about_member_index.php (Steer clear of any firm or person that is not licensed.)

Another bonus with using a mutual fund structure: you may also be able to use a special fund like an LTF or RMF to get a current year tax deduction on your contributions.

Cheers, Misty

Do you have any faith in the Thai stock exchange? Who dabbles in it? Or other methods of investment here like gold or bank deposits? Are there any higher interest earning options in Thai banks?

Edited September 5, 2009 by Misty

[olsen]

Best investment in Thailand:

Invest in land in the Khanom and Sichon area!!

This land keeps raising 100 to 150% per year in value!

[chiangmaibruce]

Good post, Misty. I would be interested to learn which mutual fund manager you like (by pm if you like).

Anyone interested in mutual funds (or 'managed funds' to us aussies) would be well advised to check out the aimc web site, and those of some of the better fund managers, to get a feel for the different types of funds out there.

One possible starting point re: which fund managers to look at, are the results of the annual Lipper/Bangkok Post fund awards (http://awards.lipperweb.com/thailand)

[bellagrego]

Do you have any faith in the Thai stock exchange? Who dabbles in it? Or other methods of investment here like gold or bank deposits? Are there any higher interest earning options in Thai banks?

From my perspective any investment here is way past iffy. The market is owned and controlled by a the Thai superriche. The same names turn up on all relevant corporations. There is no competition here and buying into the market with tiny satang dividends is simply "nuts". Two banks are solid for sure, Bangkok Bank and K.Thai. Government resources and assets of zillions of baht. Rate of return on cds is pitifull here as it is everywhere else. 1.5-2.0. They hold 10 percent for taxes on withdrawal. Gold should be called "Fools gold" as it is artificially pumped up and risky as wild swings in the world gold price will testify too. Bottom line. We all have the same problem No safe havens that will yield a fair and safe return. I suggest diverse portfolio of Auz and Scandanavian solid stock funds with cash held in your own country banks. Balance those assets with hedges in monetary instruments via Swiss franncs, Krona and Rimimbi.

Those are the positions held by many of the top international experts, including, Jim Rodgers. I am currently following those paths with my own portfolio. It's hard from here, but doable on the internet. Be carefull, be prudent and keep your money in your mattress or bury it in a coffee can in the dogyard.

russ

[Abrak]

I am an investor in a number of Thai stocks, the market is pretty well regulated and there are a reasonable spread of businesses to invest in. one major attraction is that Thai companies tend to pay investors( in dividends) a high proportion of profits by international standards. the yield available is therefore quite high and it is not difficult even now to find stocks that will provide a dividend yield of 7%+.I would stay away from the bigger stocks as they tend to be fully priced esp now as the market is up 40% or so since the red shirts invaded Pattaya . It is well worth doing the work on some of the smaller and mid-sized stocks and it can be very rewarding.

Worldchild is so right because the market is under researched, if you put in the hard work you can find some fantastic gems. Even today I was looking at a company that made 0.83 Bt/share EPS last year and grew its sales over 100% in the first half of 2009. It is priced at 3.0x historic earnings. Next year will make probably 1.0+ earnings putting it on 2.5x yield 10%. Could easily quadruple. And this is after the market is 85% up from its lows.

[bjohn34]

Agree. Investing in Thai stocks is not for the faint hearted or beginning trader, but there are opportunities ,both short and long term, for price appreciation while receiving dividends far above any bank deposits.

Takes diligence and some work but can be reqarding. Some of the brokers provide good company reports and information. I use this as a starting point and then do my own analysis to decide where I want to put my money.

Edited September 19, 2009 by bjohn34