Thailand Urged To Remove Limitations...

[StrongView]

I thought this would be of interest to the forum...

http://news.xinhuanet.com/english/2005-12/...ent_3878766.htm

BANGKOK, Dec. 5 (Xinhuanet) -- Mark Mobius, one of the world's most renowned fund managers, has urged Thailand to remove foreign ownership limitations or risk losing out in capital market development to other emerging giants in the region.

"If Thailand does not trust foreigners, why should foreigners risk investing their money in Thailand?" Mobius, president of Templeton Emerging Funds, was quoted as saying by the Bangkok Poston Monday.

"We can go to markets like Hong Kong or Singapore that welcome us with open arms. Even China's mainland is more welcoming than Thailand in this regard," Mobius said.

"Coupled with the slow pace of reforms, this has increased the regulatory risks for Thailand. It will keep Thailand in the Stone Age as far as capital markets are concerned," he added.

Currently there are foreign ownership limits on most industriesin Thailand and although they have been eased directly and indirectly through non-voting depository rights (NVDR), Mobius said these are not sufficient to attract more investment.

Mobius, whose fund has invested in excess of 1.1 billion US dollars in the Stock Exchange of Thailand and through private equity participation in various non-listed companies, said that although Thailand has the ability to capture a niche market in the region, it needs to look at ways of lifting the ownership limits.

"Yes, the foreign ownership limit results in different classes of shares," he said, adding that countries such as Singapore had done away with the need for foreign limits and foreign shares and the market had performed well as a result.

"This restriction is unnecessary. The government should treat foreign investors as stakeholders instead of being suspicious of their motives," he said, adding that the Bank of Thailand's limit of 5 percent per foreign investor in shares of banks is also an unnecessary obstacle.

Mobius knows Thailand well after being based in Bangkok for many years. His fund in 2002-2003 reduced its position from more than 1 billion US dollars to just 300 million US dollars in the view that the country's growth outlook was not as good as that of some other economies.

When asked by local media what Thailand should focus on to become a regional player, Mobius said the country's strengths were in industries such as tourism, automobiles, electronics, general manufacturing, agriculture and energy, oil and gas.

"Except for the last industry, there are, unfortunately, very few investment options for portfolio investors to get exposure to those industries," he said.

[OldAsiaHand]

Mark Mobius is a self-aggrandizing idiot of the first order. Most business reporters in Asia long ago learned to ignore his promotional press releases, of which there are very many indeed. What the appearance of this piece in today's Post primarily illustrates is the appalling lack of sophistication in the business reporting that appears here in Thailand.

[Tywais]

Mobius said the country's strengths were in industries such as tourism, automobiles, electronics, general manufacturing, agriculture and energy, oil and gas.

Exactly where did he get that idea?

[GuestHouse]

The oil and gas industry is well developed in Thailand and foreign owned refiners are already pouring money into the tax man's coffers... just as well, because the tax man needs to support Thai Oil and Bang Chat refinaries which are doing very poorly... being Thai owned and contolled might have something to do with that.

Edited December 5, 2005 by GuestHouse

[Incalclickable]

...well hes right, "self-serving" or not, he is right.

[suegha]

I do agree that the ideal of a 'free market economy' is the way forward, but there are very few developing contries that can pull it off like a western country. Society needs to change and develop, share ownership has to become accessable to the man on the street. He or she has to be involved in the delelopment and not see all the wealth and growth go to a small few, and worse still, all go overseas.

I'm not sure if Thailand is ready, but it's certainly moving forward. Whether this is the right way of course asks it's own questions. Can anyone fortell what might happen?

[chownah]

I think that the restrictions on foreign ownership will remain for a long time....the reason being that foreign owned stakes in Thai businesses are not subject to the pressures of internal Thai politics and thus are not subject to the control of the Thai political establishment.

[cdnvic]

This topic is already being covered in the business forum.

cv