Thailand Market Buy Opportunity?

[ray23]

I hope didn't duplicate anything I searched and really couldn't find a discussion that fit what I'm trying to learn.

From what I am seeing the Political situation has already brought the market down. There really doesn't seem to an end in sight. There seems to be strong fundamentals for a successful economy. Everything passes with time there was a serious drop right after the coup and it has climbed since then with a few bumps in the road

Are we looking a strong drop and will it create opportunities?

New to all of this so any input would be appreciated

[gotlost]

Sure hope so and especially the strength of the baht.

[NamKangMan]

Many are now looking "next door" where there is better value for money, just as nice beaches, culture, locals, food and lifestyle as well as easier visa laws with less scams and violence. Thailand is fast losing "the pull" that it enjoyed for years and the current political situation has just bought it to the foreground. Fact is, Thailand has milked farang for long and hard and now farang are looking at other options.

[Slaps]

Let's keep this on topic

I think tomorrow 4-5% by 12 30

But what about Monday, after the weekend

That's the question

[ray23]

It dropped significantly this morning.

I had a research project in mind when the coup hit the market dropped like a rock. I would like to see chart of how long it took to a start recovery. Don't have a clue how to that. Anyone got any ideas?

[ExpatJ]

I am still in market to some extent- in SC and SSF for example- both of these will be making their dividend payments in the coming days (6-8% div payments, very good). I also still have AIS (ADVANC) as they paid their dividend date was last week (8-9% div payment), price is down now but it will rebound in coming weeks/months. Other than these i sold everything else and am waiting - there will be some great buying opportunities coming up as some fundamentally sound companies stock prices are going down due to the crisis but have great long term prospects- KBANK for example.

[ExpatJ]

Many are now looking "next door" where there is better value for money, just as nice beaches, culture, locals, food and lifestyle as well as easier visa laws with less scams and violence. Thailand is fast losing "the pull" that it enjoyed for years and the current political situation has just bought it to the foreground. Fact is, Thailand has milked farang for long and hard and now farang are looking at other options.

I have lived 'next door' and its a fairly horrible place to live compared to Thailand/Bangkok. If you think corruption is bad in Thailand- Cambodia and vietnam are far worse, the living conditions for expats is poor too- fewer western products available, terrible buisness infrastructure, no decent movies theater, uneducated workforce, terrible medical facilities, power cuts etc etc.

[wordchild]

The SET fell 2/3 % (from just over 700 to 680) over a couple of days after the 2006 coup. It then pretty much moved sideways for a bit firming up again through the early part of 2007.For an event that, for many , came out of the blue , what is interesting is how small the reaction was when you look back on it now

Edited April 16, 2010 by wordchild

[ray23]

I have the account and funded it, but, as things are going I will stay on the sidelines and wait. Time changes everything

No experience in the market at all so I'm being very cautious. I do have Aberdeen working and I'm comfortable with that.

Thai stocks open down 14.84 pt, 1.95 pct

Thai composite stocks index (SET) opened on Friday at 746.06, down 14.84 points, or 1.95 percent.

Blue chip SET-50 index was at 525.69, down 10.93 points, or 2.04 percent.

Top five active stocks: PTT, PTTEP, KBANK, BBL, SCB.

The Nation

Edited April 16, 2010 by ray23

[wordchild]

From an historical perspective its worth remembering that the recent peak of the SET was around 920 in Oct 2007, still a long way short of the all time high of the market at 1546 reached in Sept 1994! The low for the market (in recent years) was just over 200 in Sept 1998.The market reached a low again of around 400 during the global crisis of 2008. I am not a chart specialist but FWIW somewhere around 700 (ie 5% below where we are today) looks a reasonable downside target for the market.

Edited April 16, 2010 by wordchild

[ray23]

I finally found a historic Chart on the set, looking after 97 the biggest hit was the Coup, it stayed at the bottom for what looks like about 45 days, had some ups and down but kept growing steadily till last weekend.

http://www.asiachart.com/thai.html

But. I'm very new at this can someone else check it and give us your thoughts

[wordchild]

That chart is compressed and not that clear as to dates. I believe the coup was 19 sept, the market did not do much (down a couple of %) in the weeks after the coup. I remember at the time people commenting on how muted the market reaction was especialy because the market had been hit very hard by the 1991 coup.This time the market was back above the pre-coup level within a couple of weeks.

The market did have a big shake-out, which , I think, is the one you identify on that chart around 17/18 December 2006, when the SET fell from 734 to 622. This fall had nothing (at least directly) to do with the coup and was triggered by falls elsewhere in Asia and mainly by concerns over the baht strength and Bank of Thailand measures to control this.The recovery from that was reasonably swift and the market was back above 734 by May 2007. The market went on to peak in 2007 at 920 before treading water sideways through to June 2008 at the start of the global market problems when the SET was around 800. It then plunged pretty much in a straight line down to just under 400 by September 2008.

Edited April 16, 2010 by wordchild

[ray23]

Good explanation Thanks.

Trying to set a time frame to watch the recent drops for the buy in. Since this has not resolved yet I expect to see a more downward trend

[Abrak]

From an historical perspective its worth remembering that the recent peak of the SET was around 920 in Oct 2007, still a long way short of the all time high of the market at 1546 reached in Sept 1994! The low for the market (in recent years) was just over 200 in Sept 1998.The market reached a low again of around 400 during the global crisis of 2008. I am not a chart specialist but FWIW somewhere around 700 (ie 5% below where we are today) looks a reasonable downside target for the market.

Just to correct a couple of facts. I believe the all time high was in fact on January 4th 1994 at 1786 (I suspect that was intra-day high shortly after open.)

As for the current correction it certainly scores on the 'best time to invest is when the blood is on the streets' such as as in May 1992. However political uncertainty is a part of life in Thailand and it should be remembered that that the SET has had a particularly strong run both in currency and stock terms since the beginning of the year - you aRe still in the money.

It seems to me a bit of taking the 'froth' out of the market rather than some calamitous fall. So I am in the rather long boring sideways rally with increasingly low volumes than a very sharp rebound. I think there is still plenty of upside but I just think you need to be patient.

[wordchild]

From an historical perspective its worth remembering that the recent peak of the SET was around 920 in Oct 2007, still a long way short of the all time high of the market at 1546 reached in Sept 1994! The low for the market (in recent years) was just over 200 in Sept 1998.The market reached a low again of around 400 during the global crisis of 2008. I am not a chart specialist but FWIW somewhere around 700 (ie 5% below where we are today) looks a reasonable downside target for the market.

Just to correct a couple of facts. I believe the all time high was in fact on January 4th 1994 at 1786 (I suspect that was intra-day high shortly after open.)

As for the current correction it certainly scores on the 'best time to invest is when the blood is on the streets' such as as in May 1992. However political uncertainty is a part of life in Thailand and it should be remembered that that the SET has had a particularly strong run both in currency and stock terms since the beginning of the year - you aRe still in the money.

It seems to me a bit of taking the 'froth' out of the market rather than some calamitous fall. So I am in the rather long boring sideways rally with increasingly low volumes than a very sharp rebound. I think there is still plenty of upside but I just think you need to be patient.

you are spot on with the date of the peak in 1994, i missed that , i knew it was sometime in 1994 but didnt take my date range back far enough.

[ray23]

This exchange is really helpful to someone like me and I really appreciate it

So thanks very much.

[Irene]

Ray,

From my archives, stock market was hardly affected after the coup on Sept. 19, 2006. It started to fall only in 2007. If there is a coup now, I think the feeling could be the same because people would be so relieved of the way out. But I don't think it will happen. Why? Just look around us now, whether we are in the hands of the reds even with army assaults etc. Granted that with this coup, they would emphasise as real bullets. I bet the reds are so confident of themselves that the army and the police would not dare. Why are they so strong? Well financed and true believers of unfair society.

With political baddies, we have an extremely excellent fundamentals, export rising, baht strength, high currency reserves, small unemployment. For an investor, this is more of a permanent nature than the political crisis. I therefore feel cautionary bullish unless the political scene could become so strong to destroy these good fundamentals which could be the case as the Finance Minister has implied that Gdp could be reduced by 2%. IMF estimated before the crisis as 6% +. Even 4%, it may not be that bad. Well, I could be wrong again. In the past two trading days, 12th and 16th, I should have sold but I did not in order to buy later on. I was hoping that there could a solution, like the red leaders arrested. Unfortunately, the authority has fumbled so much that I think it is getting to be like Chaplin's films. Irrespective of the current "jokes", I still like the fundamentals so much and our stocks in this darling region are still the cheapest. I also do not know why tourists like Thailand so much especially those from Scandinavia. Well, don't take me seriously, I have been wrong so many times. As they say a good investor should always self-examine oneself and allow a few lapses, so long as one remembers the reasons for the lapses.

[SantiSuk]

No point in trying to buy the bottom - everybody else is betting it is a shortlived thing and the market is not going down enough to make the risk worthwhile. Goldman Sachs: down 15% today - that's a proper (unnecessary) panic that's worth punting on, as I just have.

[wordchild]

No point in trying to buy the bottom - everybody else is betting it is a shortlived thing and the market is not going down enough to make the risk worthwhile. Goldman Sachs: down 15% today - that's a proper (unnecessary) panic that's worth punting on, as I just have.

Wow good luck with that, that is one hel_l of a ballsey shout! GS are still above where they were at the start of march even after the fall today. The potential reputational risk is huge,and a big issue for them. I am in New York right now and talking to people here some of them are already talking about a possible moratorium (from their compliance departments) on dealing with the firm. I think i would prefer to own most Thai stocks over that right now. But it takes two views as they say!

Edited April 16, 2010 by wordchild

[Time Traveller]

That chart is compressed and not that clear as to dates. I believe the coup was 19 sept, the market did not do much (down a couple of %) in the weeks after the coup. I remember at the time people commenting on how muted the market reaction was especialy because the market had been hit very hard by the 1991 coup.This time the market was back above the pre-coup level within a couple of weeks.

The market did have a big shake-out, which , I think, is the one you identify on that chart around 17/18 December 2006, when the SET fell from 734 to 622. This fall had nothing (at least directly) to do with the coup and was triggered by falls elsewhere in Asia and mainly by concerns over the baht strength and Bank of Thailand measures to control this.The recovery from that was reasonably swift and the market was back above 734 by May 2007. The market went on to peak in 2007 at 920 before treading water sideways through to June 2008 at the start of the global market problems when the SET was around 800. It then plunged pretty much in a straight line down to just under 400 by September 2008.

Just to correct you. The coup had very little immediate impact (approx 2%). The very large move on the chart was the stupid BoT announcing capital controls to prevent speculative money coming into Thailand. It's effect was immediate selling by foreign funds, many of whom have investment policies that prevent investing in countries that have capital controls. The result was an immediate sharp fall of about 15+% in one day. The policy itself was so ill thought out that the BoT immediately (the following day) decided to exempt capital investments into the stock market from this order. The market subsequently bounced back to recover about half or more of the losses.

Edited April 16, 2010 by Time Traveller

[ray23]

Thanks Guys, BOT control were relaxed just guessing is that when the real growth started?

On the other side the Army has now been out in charge of the operation, what the results of that is going to be have to wait and see.

I definetly agree the fundamentals haven't changed. I will wait just a little longer and see how things will go. It's good to know it will be short lived, dropped some where around 10% from the week before I believe. That could be it?

http://www.nationmultimedia.com/home/

Edited April 16, 2010 by ray23

[ray23]

Sorry it's early that should have read 8%. we may have a ways to go

SET continues slump with 3% fall

By THE NATION

Published on April 17, 2010

The Stock Exchange of Thailand yesterday continued its decline from before the start of the three-day Songkran break, as the confrontation between the red-shirt demonstrators and the government drags on.

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The SET Index declined 24.74 points or 3.25 per cent to 736.16 - the lowest closing level since March 15 - on turnover of Bt29.8 billion.

SCB Securities said it was possible the index could fall to 700-720 points next week, as the potential existed for unexpected incidents to happen on the political front.

Foreign investors yesterday remained net sellers, with their sales exceeding their buys by Bt1.45 billion. Local institutional investors and brokerage houses' proprietary accounts were also net sellers. Local retail investors were net buyers, at Bt2 billion.

Despite the sell-offs on Monday and yesterday, foreign investors remain net buyers to the tune of Bt42.66 billion so far this year.

Nader Naeimi, a Sydney-based investment strategist at AMP Capital Investors, which oversees about US$90 billion (Bt2.9 trillion) globally, told Bloomberg that the instability was creating a massive risk premium.

"We don't think valuation is compelling to have that kind of risk. The Thai share market will continue to struggle," Naeimi said.

Finance Minister Korn Chatikavanij said on Thursday that if the prolonged conflict were not solved within a few days, or at most in a few weeks, it could pull down 2010 gross domestic product by as much as 2 percentage points.

Korn cited the tarnished confidence among foreign travellers, let alone the negative consequences on consumer confidence.

However, he insisted the government would not yield to the demonstrators' push for House dissolution, as that would not result in long-term political stability.

"The political situation is hurting consumer and investor sentiment," Sukkawat Prasurtying, who oversees about $150 million as chief investment officer in Bangkok at Manulife Asset Management (Thailand), told Bloomberg. "Things will go back to normalcy as soon as we get through politics."

Other Asian stock markets also fell yesterday, dragging the MSCI Asia Pacific Index down from a 20-month high, after China announced measures - including higher down payments for some home purchases - to cool its property market, US jobless claims unexpectedly rose and commodity prices dropped. Possible overheating is expected in China, as it announced first-quarter economic growth of 11.9 per cent.

Due to the prolonged domestic conflict, Korn said he expected the Monetary Policy Committee, which convenes on Wednesday, to take the political factor into consideration.

Many research houses believe the policy interest rate will not be raised at the MPC meeting, but they share the view that it could be hiked in June. The rate has remained unchanged at 1.25 per cent since April last year.

"The complicated political situation, which is unlikely to end quickly, will be a major risk to Thai economic growth. Meanwhile, in the short term, inflationary pressure will remain low. Rate normalisation could take place thereafter, when the time is more appropriate," said Kasikorn Research Centre (KResearch).

The research house said the political fallout could shave 0.2-1.5 percentage points off economic growth this year, due to lower confidence among the private sector, lower domestic spending, a drop in the tourism sector and a slowdown in public spending.

In the worst-case scenario, if the government is unable to hang on to power, growth could be only 3.5 per cent. However, if a solution to the conflict is found soon, the limited impact could allow growth to rise to 6 per cent.

"The baht could weaken due to the political conflict and a delayed [interest] rate hike, but it would be supported by the appreciation of most regional currencies," KResearch said. Singapore recently widened the trading band of its dollar.

KResearch expects more volatility in baht trading, and its appreciation to be less than that for other Asian currencies.

The baht traded at 32.25 per dollar as of 4.03pm yesterday in Bangkok, from 32.26 in offshore trading and unchanged from a week ago, according to data compiled by Bloomberg. It touched 32.14 on Monday, the strongest level since May 2008.

Edited April 16, 2010 by ray23

[Irene]

No point in trying to buy the bottom - everybody else is betting it is a shortlived thing and the market is not going down enough to make the risk worthwhile. Goldman Sachs: down 15% today - that's a proper (unnecessary) panic that's worth punting on, as I just have.

In my experience, I have never bought at the real bottom. It has always been too expensive at any time of my purchases. Also, I have never sold at the peak. It has always been selling too soon. I always have this comfort because with this principle I have succeeded in not feeling sorry for myself.

[zorro1]

Im selling some oz stock and will invest in the SET some time next week. I have found the best way to take advantage without picking the bottom is to buy in parcels say 10%-20% at a time on the way down and the way up that way you end up with a nice average. Patience is the key here

[Irene]

Im selling some oz stock and will invest in the SET some time next week. I have found the best way to take advantage without picking the bottom is to buy in parcels say 10%-20% at a time on the way down and the way up that way you end up with a nice average. Patience is the key here

Spot on! Like many, I used to wait for bottom and always ended in buying none. Similarly, I used to try to sell at the highest and ended up in selling when the market was in panic.

[zorro1]

Im selling some oz stock and will invest in the SET some time next week. I have found the best way to take advantage without picking the bottom is to buy in parcels say 10%-20% at a time on the way down and the way up that way you end up with a nice average. Patience is the key here

Spot on! Like many, I used to wait for bottom and always ended in buying none. Similarly, I used to try to sell at the highest and ended up in selling when the market was in panic.

Irene

Had a chuckle at your previous post and figured that what you meant. I don't have the numbers but I believe it to be around 70% lose money trying to trade the market highs and lows.

[ray23]

I'm thinking toward the end of next week. Hope I'm right

[fletchsmile]

.... I have found the best way to take advantage without picking the bottom is to buy in parcels say 10%-20% at a time on the way down and the way up that way you end up with a nice average. Patience is the key here

Horrible tactic if you're actually trying to time the market. Somewhat akin to catching a falling knife... If you're really into timing as your strategy, wait for the knife to hit the ground first, bounce and then pick it up.... much safer...

Agree with the view on patience, and like the old-fashioned mantra of time in the market being more important than timing the market.

[wordchild]

That chart is compressed and not that clear as to dates. I believe the coup was 19 sept, the market did not do much (down a couple of %) in the weeks after the coup. I remember at the time people commenting on how muted the market reaction was especialy because the market had been hit very hard by the 1991 coup.This time the market was back above the pre-coup level within a couple of weeks.

The market did have a big shake-out, which , I think, is the one you identify on that chart around 17/18 December 2006, when the SET fell from 734 to 622. This fall had nothing (at least directly) to do with the coup and was triggered by falls elsewhere in Asia and mainly by concerns over the baht strength and Bank of Thailand measures to control this.The recovery from that was reasonably swift and the market was back above 734 by May 2007. The market went on to peak in 2007 at 920 before treading water sideways through to June 2008 at the start of the global market problems when the SET was around 800. It then plunged pretty much in a straight line down to just under 400 by September 2008.

Just to correct you. The coup had very little immediate impact (approx 2%). The very large move on the chart was the stupid BoT announcing capital controls to prevent speculative money coming into Thailand. It's effect was immediate selling by foreign funds, many of whom have investment policies that prevent investing in countries that have capital controls. The result was an immediate sharp fall of about 15+% in one day. The policy itself was so ill thought out that the BoT immediately (the following day) decided to exempt capital investments into the stock market from this order. The market subsequently bounced back to recover about half or more of the losses.

correct what? you just repeated what i said

[zorro1]

.... I have found the best way to take advantage without picking the bottom is to buy in parcels say 10%-20% at a time on the way down and the way up that way you end up with a nice average. Patience is the key here

Horrible tactic if you're actually trying to time the market. Somewhat akin to catching a falling knife... If you're really into timing as your strategy, wait for the knife to hit the ground first, bounce and then pick it up.... much safer...

Agree with the view on patience, and like the old-fashioned mantra of time in the market being more important than timing the market.

That sounds horribly easy. I only ever made big money buying fear, buying euphoria is a sell.. now who said that... warren bu...

Good luck to all whatever your strategy