The Baht Maintains It’s Strength.

[sleepyjohn]

Aspen will reach the maximum foreign shareholding = 47.2 % (Thaksin changed the law just before the deal.....

Could you expand on this please cclub?

[Carmine6]

As i've said before, this happens every year about this time. If you do a forum search you will find a thread from last year, the year before, and before. Last year the thread was quite extensive as everyone thought the U.S. Dollar was going to strengthen to an all time high which as we know now it never happenned. I predict in around may or june the dollar will strengthen causing the baht to weaken against the dollar. That's the time to transfer some cash to LOS.

Barry

Pretty good trend recently. March to July has been a stronger dollar. But 2002 and 2003 weren't so clear and then going back, 1997, 1998, 1999 were flat or negative. So that makes 5 of 10 up by July over 10 years. Back 5 years it's 3 of 5. This year should probably follow the last 2, but my call now for 2007 is March to July, the Baht will strengthen. No particular reason other than everyone's gonna notice a 3 year trend and do their best to profit from it.

Red lines in the table are around March of each year.

Historical_Baht_to_Dollar.pdf

Edited March 8, 2006 by Carmine6

[cclub75]

Aspen will reach the maximum foreign shareholding = 47.2 % (Thaksin changed the law just before the deal.....

Could you expand on this please cclub?

Well... it's very simple :

-in october 2001, the house voted a law proposed by Thaksin. Main point : to limit at 25 % maximum the foreign shareholding into a thai telecom company.

Result ? Thaksin managed to protect his market, protect his company (Shin, and AIS) from a hot competition (other thai telecom companies who could find a foreign ally).

-a few years later, well the law was a little bit out dated... and was now against Thaksin's interets (sell Shin, and therefore AIS).

So he proposed to increase the maximum to 49 %.

Decision was approved last september. And the amendment was passed on january 20 2006, just before the deal !

So, who can says that our dear PM is not using his position for his own private interest ?

I mean it's obvious.

New Thai law caps foreign stakes in telcos

By Harish Mehta

In Bangkok , Business Times

12 Oct 2001

THAILAND'S lower house of Parliament, controlled by Prime Minister Thaksin Shinawatra's party, has passed the Telecom Service Bill with a controversial 25 per cent cap on foreign shareholding in Thai telecoms firms.

The bill was passed by a vote of 276-76, despite vociferous demands to drop the foreign limit from opposition MPs and telecoms operators which depend on strategic foreign partners.

It is not immediately clear if the foreign cap applies only to strategic investors or to all types of shareholders. If it applies to all shareholders, then those holding foreign board shares may have to sell down.

It is also not clear if the cap would apply to only companies formed after the law comes into force, or retroactively. The law takes effect in 90 days.

Dr Thaksin's flagship, Shin Corp, has said that the law would not affect existing companies.

Vikas Kawatra, analyst at Kim Eng Securities, said the National Telecom Commission, a regulatory body yet to be formed, would have the final say on the issue.

Mr Kawatra said the foreign limit negatively affected cellular phone operator Total Access Communication, and TelecomAsia's joint venture with CP Orange (49 per cent held by Britain's Orange).

But it has no impact on Advanced Info Service, which is controlled by Dr‚Thaksin's family and 20 per cent held by Singapore Telecom.

TAC managing director Boonchai Benjarongkul said the law would allow only one operator, Advanced Info, to stay in business.

Mr Boonchai, whose firm had sold a 30 per cent stake to Norway's Telenor, said many Thai telecoms companies would be hurt because most of them had taken on foreign strategic partners that had bought stakes of more than 25 per cent.

*********************************************

Chamlong 'has right to join rally'

AMPA SANTIMATANEDOL

Maj-Gen Chamlong Srimuang speaks at the Oct 14 Memorial on Ratchadamnoen avenue yesterday, calling on Prime Minister Thaksin Shinawatra to resign. — APICHIT JINAKUL

Government spokesman Surapong Suebwonglee said Chamlong Srimuang had every right to join the anti-Thaksin rally at Sanam Luang on Sunday.

The expression of opinion was a constitutional right _ as long as it was done in a peaceful manner.

He asked groups joining the rally to be aware of a lesson learned from the May 1992 uprising to avoid a repeat.

The leaders of the rally should be able to control the protesters.

If not, the demonstrators may become confused and unexpected problems could arise, he said.

Mr Surapong promised that the government would in the meantime tell police to be patient in handling the rally.

However, he warned rally leaders not to lead their supporters out of Sanam Luang, as such a move would seriously breach security measures. There have been only two pro-democracy processions in the past 30 years because activists realised that it was difficult to control moving crowds, he said.

Mr Surapong rejected the possibility of a parliamentary dissolution, saying the present political conditions did not justify this.

He also denied Maj-Gen Chamlong's allegation that the Telecommunications Operation Act had been amended to facilitate the Shin Corp share sale.

The amendment raises the amount of foreign shareholding allowed in a telecommunications company from 25% to 49%. It took effect on Jan 20 and the Shin share sale took place on the following working day, Jan 23.

Mr Surapong said the law was promulgated in 2001 and prompted telecommunications operators including TAC, Orange and TT&T to ask the government to increase the legal level of foreign partnership from 25%, to facilitate telecommunications liberalisation.

The government studied the issue and agreed in 2003 on the 49% limit, which is implemented in countries with modern telecommunications services, including many European nations and Asian countries including South Korea.

The House took two years to study the change and endorsed it last September. The Senate examined it and approved it in November. The legal amendment underwent its normal process and had nothing to do with the Shin share sale, Mr Surapong said.

He also dismissed as untrue Maj-Gen Chamlong's comment that the government was behind the talk shows hosted by Samak Sundaravej and Dusit Siriwan.

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[Plus]

Just look at the timescale - it took only a few months for the parlament to pass the original bill in 2001, and FIVE years to respond to "other" operators concerns. Nothing to do with Shin concerns, of course, if you believe this sort of talk.

[OldAsiaHand]

....I'd suggest you wait a few days. Unless something unexpected happens, the odds on the THB drifting back toward 39.2-39.5 have to be pretty good.

Just for the record, the above post was made five days ago.

This morning the mid-rate for the baht is 39.2.

Please hold your applause.

[Carmine6]

....I'd suggest you wait a few days. Unless something unexpected happens, the odds on the THB drifting back toward 39.2-39.5 have to be pretty good.

Just for the record, the above post was made five days ago.

This morning the mid-rate for the baht is 39.2.

Please hold your applause.

Good call. Just wondering...if it hadn't made it, what 'unexpected' something would you have blamed?

[JimmyGreaves]

Still no recovery in sight. Downward trend continues:

Live mid-market rates as of 2006.03.10 08:24:29 UTC.

1.00 USD United States Dollars = 39.0266 THB Thailand Baht

source: http://www.xe.com

Edited March 10, 2006 by jflundy

[rishi]

Still no recovery in sight. Downward trend continues:

1.00 USD United States Dollars = 39.0266 THB Thailand Baht

Maybe it's OAH's karma, that hits us all?

Please hold your applause.

[britmaveric]

1.00 USD

United States Dollars = 39.1173 THB

Thailand Baht

1 USD = 39.1173 THB 1 THB = 0.0255641 USD

[OldAsiaHand]

....I'd suggest you wait a few days. Unless something unexpected happens, the odds on the THB drifting back toward 39.2-39.5 have to be pretty good.

Just for the record, the above post was made five days ago.

This morning the mid-rate for the baht is 39.2.

Please hold your applause.

Good call. Just wondering...if it hadn't made it, what 'unexpected' something would you have blamed?

What I was referring to was somebody blowing up Beirut or an earthquake taking out Los Angeles. No matter how you try to anticipate the drift of a FX market based on factors you can anticipate, nobody can take into account a political or economic event that was beyond even the possibility of anticipation.

[Carmine6]

....I'd suggest you wait a few days. Unless something unexpected happens, the odds on the THB drifting back toward 39.2-39.5 have to be pretty good.

Just for the record, the above post was made five days ago.

This morning the mid-rate for the baht is 39.2.

Please hold your applause.

Good call. Just wondering...if it hadn't made it, what 'unexpected' something would you have blamed?

What I was referring to was somebody blowing up Beirut or an earthquake taking out Los Angeles. No matter how you try to anticipate the drift of a FX market based on factors you can anticipate, nobody can take into account a political or economic event that was beyond even the possibility of anticipation.

hel_l, I think it's even more mundane than that. As much as someone tries to factor everything into forecasting exchange rates, its just impossible to factor in even a tiny fraction of what's really going on. Which is why I'll be willing to talk all day about which way rates are going, but I'm not putting any money to play future rates.

I was bored at work once and tried a free fake currency account. Took all of 20 minutes to lose $6,000 of the fake $10,000. Forgot to carry the trade the next day and it would have gone back up to something like $12,000. But 3 days later I got that $4,000 back up to $9,500. That was playing USD vs Pounds Sterling and it was just doing normal daily fluctuations.

[bdenner]

....I'd suggest you wait a few days. Unless something unexpected happens, the odds on the THB drifting back toward 39.2-39.5 have to be pretty good.

Just for the record, the above post was made five days ago.

This morning the mid-rate for the baht is 39.2.

Please hold your applause.

Interest rate announcement due out of the USA tonight. Forcast is 0.25% increase.

Most major currencys have dropped against the USD - But latest quote for the THB

38.8717

[TRIPxCORE]

IMO this seems to defy all logic given the current political unrest in Thailand.

Is it that the Thai economy is so strong as to offset other factors?

Is the bubble about to burst?

What don’t I understand?

I have been giving my input into these forex threads for a long time now. My opinion always seems to be the minority one but I have been proved right everytime. Lots of people disagree with me on here but I am still sticking to my original opinion.

If you are not a forex investor and have not spent lots of time learning about how the markets work, I would suggest not getting involved in it. You have to know what you're doing before jumping into it.

The political unrest in Thailand has little to do with the Baht exchange rate. For the past 3-4 years, I have been saying that USD is going to depreciate. It has been going up and down all this time but it did go down more then it went up and I profited accordingly from it. USD will continue to weaken because of fundamental flaws in the US economy, particularly the two huge deficits they cannot keep funding. This has been the biggest problem for the US the past 3-4 years and it keeps getting worse.

Right now the key for the direction of Asian currencies is China. Last year China finally started to let the Yuan expand it's range of movement. It was held artificially down against USD to help China with its exports to the US. So when they got rid of the long-standing peg, of course it started to appreciate. Just about every Asian currency will ride the coattails of the Chinese Yuan. It is now being predicted that the Chinese are going to let the range of the Yuan expand a lot more. This will help Asian currencies appreciate a great deal. That is why my money is all in Japanese Yen right now besides the fact that Japans economy is healing and they are going to actually raise interest rates soon.

SEA countries are once again looking good and fundementally sound. Malaysia is the strongest of the group right now. Vietnam, Singapore and Thailand are all doing very well too. Due to China and the strong fundamentals of each country, these currencies will continue to appreciate.

The Japanese Yen will likely advance this week on speculation China will take additional steps toward allowing the Renminbi to strengthen against the dollar amid pressure from politicians in the US and Europe who say the government has kept the currency weak to bolster exports. A report by Morgan Stanley's head of currency strategy, Stephen Jen agrees with this assessment. Jen writes "The yen and Yuan are mispriced and should appreciate against the dollar. If they appreciate, the other Asian central banks will be more likely to allow their currencies to move higher."

China is the key to rallying all of the Asian currencies. A stronger Renminbi will make Japanese and other Asian country's exports more competitive with Chinese goods. Expect the Chinese will let the Renminbi break the 8 'handle' very soon.

Edited March 28, 2006 by TRIPxCORE

[OldAsiaHand]

For what it's worth, I think your comments are spot on in almost every respect, particularly the part about the foolishness of speculating in FX markets unless you bring a certain level of professional expertise to the table. Amen.

[gburns57au]

It is a worry....most major currencies are down against the US dollar...the Oz is at its lowest rate in years....usually the baht also goes down so it evens out....but the baht is holding strong and with the current events it seems very strange...What is holding the baht up....???

[bdenner]

For what it's worth, I think your comments are spot on in almost every respect, particularly the part about the foolishness of speculating in FX markets unless you bring a certain level of professional expertise to the table. Amen.

And I agree also. Speculating on the forex market is the last thing I would do. ShIt, I'm such a looser I'm still holding a large parcel of Australian TLS (Telstra) shares I bought at the T2 sale. Ask any Aussie about that fiasco.

[simcity]

I am just thinking the economy is really in bad shape here (Thailand), the cost of oil and import stuff is at the max! The rise of the baht is just too off set some of the cost and show a strength of stability! But when it will feel it will feel hard!

[britmaveric]

I am just thinking the economy is really in bad shape here (Thailand), the cost of oil and import stuff is at the max! The rise of the baht is just too off set some of the cost and show a strength of stability! But when it will feel it will feel hard!

Drop like a sack of potatoes.

[TizMe]

Speculating on the forex market is the last thing I would do. ShIt, I'm such a looser I'm still holding a large parcel of Australian TLS (Telstra) shares I bought at the T2 sale. Ask any Aussie about that fiasco.

But if you follow the advice of most investment advisers, they will tell you to spread your risk over many more than 1 stock. (10-20 is ideal).

I don't pretend to know a great deal about the Oz stock market, but I've averaged over 25% returns per annum since I first invested in ASX stocks in 1988. There have been some spectacular losses for me, but there have also been more spectaculur gains.

I have never traded stocks, but have always tried to buy well run companies at a fair price.

[TRIPxCORE]

I am just thinking the economy is really in bad shape here (Thailand), the cost of oil and import stuff is at the max! The rise of the baht is just too off set some of the cost and show a strength of stability! But when it will feel it will feel hard!

Drop like a sack of potatoes.

Brit, you and I will disagree on this forever. Now you have a running partner that is willing to lose money with you. I am not trying to change your mind becuase I know thats not going to happen. I am just trying to inform you guys. From my currency newsletter:

The Japanese Yen strengthened for a third day as investors started to bring money home before the end of the financial year on March 31. An improving Japanese economy will likely make this years repatriation even larger than years past. The yen has climbed against the US$ in March of three of the past four years, with the exception of 2005. With the underlying fundamentals in Japan much more supportive this year, we expect the Japanese businesses and investors to bring home a larger percentage of their currency. While some of the BOJ members continue to manipulate the currency downward, it is becoming more apparent that interest rates will have to rise in Japan sometime this year. These higher yields will certainly trigger Japanese investors to sell overseas assets, benefiting the Yen but putting additional selling pressure on the New Zealand dollars.

The rising yen, along with a strengthening Chinese Renminbi will likely bring all of the Asian currencies along for the ride. Rising Yen and Renminbi will make exports by these two countries more expensive relative to those of their regional competitors. Exports make up over 50% of the economies of Thailand, and account for almost 70% of Singapore's non-oil domestic exports. We continue to suggest investors get exposure to the Asian markets by purchasing Thai Baht 3 month CDs where in addition to the currency appreciation, you get an interest rate of over 3% (high for Asia!). We also like investments in Singapore as the currency will continue to follow the Yen upward.

China's foreign-exchange reserves overtook Japan's as the world's largest, reaching 853.7 billion by the end of last month, the state-owned China Business News said. These reserves have doubled in the past two years and passed Japan's 850.1 billion last month. A record trade surplus has pushed the reserves higher and will continue to increase pressure on the Renminbi to strengthen.

The holdings are so large that China is shifting more of the added reserves into Euros and Yen to reduce its exposure to dollar-denominated assets. Currently the reserves are thought to be between 70 and 80 percent in dollars. China held $262.6 billion in US government treasury bonds at the end of January, making it the largest investor after Japan. It will be interesting to see what happens as China begins shifting out of these US treasuries and diversifying into other currencies. I can assure you of one thing, it won't be good for the US$ or interest rates in this country!

A strategist at JP Morgan believes the move will be even larger. In a report released yesterday, they predict the Renminbi will gain about 12% this year as sustained economic growth persuades Chinese policy makers to allow gains in the currency. "Its definitely the case that the yuan (Renminbi) is going to be allowed to appreciate as the economy grows." The Renminbi will advance to 7 against the US dollar by year end according to JP Morgan. Again, an appreciating Renminbi will take the rest of Asian currencies with it, so look for good returns in all of the Asian currencies in 2006.

Interest rate increases in the US are going to stop very soon, while increases in Japan and Europe have just begun. These offsetting interest rate cycles, along with the negative US economic fundamentals will lower the value of the US$.

A study released yesterday suggested an appreciation of as much as 20 percent in China's currency would barely cut the US current account deficit. MFS Investment Management stated that a hypothetical increase of that order in the value of the Renminbi would cut the US current account deficit by just $30 billion. Higher savings and less spending by US consumers are what are needed in order to cust this massive account deficit. We need to look at ourselves and take care of our own instead of trying to blame everyone else. People's Bank of China Governor Zhou Xiaochuan agrees. "The US needs to cut its fiscal deficit and boost the savings rate to narrow the trade imbalance", Zhou said in a speech posted on the central bank's Web site. I would agree.

[bdenner]

....... But if you follow the advice of most investment advisers, they will tell you to spread your risk over many more than 1 stock. (10-20 is ideal).....

Last count my portfolio was spread over some 27 stocks and investment opportunities. I just refuse to sell anything at a loss so I guess I will hang on to TLS forever (as well as the bullshit ".com" I bought - som nom na). Only thing in TLS's favour is the very good, bi-annual, dividend.

[TizMe]

Only thing in TLS's favour is the very good, bi-annual, dividend.

Telstra warns dividend at risk

COMMENT

Michael Sainsbury

March 16, 2006

TELSTRA has given its clearest indication yet that the 28c-a-year dividend propping up its share price is at risk.

The company's long-suffering shareholders will find out in the coming months, if not sooner, as a raft of major decisions from the Government and competition regulator affect the minds of the telco's executives.

The answer will rest on whether or not Telstra finds those decisions "horrendous".

Telstra chief financial officer John Stanhope made the company's position quite clear at a Citigroup conference in London last week.

If Telstra does not get what it wants by way of the price it can charge rivals to access its network, out go the dividend promises.

Here is exactly what Stanhope said: "If we get a horrendous regulatory outcome, the board will have to reconsider that particular dividend payment, but that is our intention at this point in time."

Then there was a question from Australian Citigroup analyst Tim Smeallie: "Can you qualify or give some quantification of that horrendous outcome? If there is a horrendous outcome, what is the actual procedure you're currently proposing? No safe harbour on fibre to the home. Is that what you class as horrendous?"

Stanhope relied: "I think that's pretty horrendous, Tim."

So, now we know. It's already horrendous after Helen Coonan, in a speech last week, knocked any idea of safe harbour on the head.

Maybe they should tell shareholders. They might think they already have, as a transcript of this exchange was sent to the Australian Stock Exchange on Friday.

Stanhope went on to say: "As I already said, I think, after the strategy day, we had a regulatory break-out session and I explained that what the ACCC wants for unbundled local loop is an impact on the enterprise value of $6 billion. Then there's the secondary impact of fly-through under-the-wireless business, (which) adds another $1.5-1.8 billion. That's a horrendous outcome and I'm sure the board would have to reconsider the intention of 28c if that sort of outcome happened."

Just to make sure, this writer checked with Warwick Ponder, one of Telstra's best public relations operatives.

He had this to say: "The CFO made it clear at our strategy day on 15 November and our half-year results that our intention to pay a fully-franked 28c per second ordinary dividend to the end of the 2007-08 was subject to the normal board considerations.

"A major regulatory decision having a significant financial impact on the company is of course something that the board would and should take into account when considering dividend payments."

Smeallie inked a quick note to his client on his return home this week saying: "We believe Telstra's dividend for FY07 and FY08 appears at risk, and to date has underpinned the share price performance.

"Telstra management has outlined that the current ACCC proposals for last-mile access (ULL) together with no protection on Fibre-to-the-Node (FTTN) investment would prove horrendous and would put current dividend expectations at risk."

Interestingly, Telstra chairman Donald McGauchie was at the same conference.

Meanwhile, across the Atlantic only hours after Stanhope had cast a long shadow over the dividend, Telstra chief executive Sol Trujillo was addressing the University of California in Los Angeles.

Trujillo was making a raft of positive comments about Australia's position in the Asia Pacific. And he basically said Telstra had its eye on China and elsewhere in Asia. The seemingly permanent consultants from Bain at Telstra are known to be very, very keen on this idea, and India too.

Of course, if Telstra is prevented from investing too much in Australia, it might just turn to Asia ... once more. Bet your house on it.

So back to those divvies.

The Telstra board has form here. It has no compunction in breaking promises to shareholders about the amount of cash they can expect to get back from the company that they have invested their hard-earned dollars in. Late last year it canned a third year of special dividends made in June 2004, the same time the board professed that offshore investments were off the agenda.

As the French say: plus ca change, plus c'est la meme-chose.

The more things change, the more they stay the same.

[bdenner]

Only thing in TLS's favour is the very good, bi-annual, dividend.

Telstra warns dividend at risk

COMMENT

Michael Sainsbury

March 16, 2006

TELSTRA has given its clearest indication yet that the 28c-a-year dividend propping up its share price is at risk.

The company's long-suffering shareholders will find out in the coming months, if not sooner, as a raft of major decisions from the Government and competition regulator affect the minds of the telco's executives.

Thanks for posting this. I had heard snippits of the report with the Govt. reportedly saying the Management of Telstra are "Scare Mongering" trying to force share prices down to thawart the T3 sale.

[sfokevin]

People's Bank of China Governor Zhou Xiaochuan agrees. "The US needs to cut its fiscal deficit and boost the savings rate to narrow the trade imbalance", Zhou said in a speech posted on the central bank's Web site. I would agree.

TRIPxCORE Is Zhou Xiaochuan an Economist?... What does Zhou Xiaochuan say about letting his countries currency float in a free market?...

Edited March 31, 2006 by sfokevin

[Korat Correct]

Might be worth waiting until after the election before changing money. Things are getting abit sticky for the stock market. Inflation will cause the Baht to fall.

Iv'e said before. Don't hold your breath that the dollar recover. Its the Petro dollar. The Arabs are moving into the Euro.

The pound is following.

What can you do if you are paid in dollars or pounds? Either accept the fluctualtion or change some of them into Euros in an off shore account.

[TRIPxCORE]

People's Bank of China Governor Zhou Xiaochuan agrees. "The US needs to cut its fiscal deficit and boost the savings rate to narrow the trade imbalance", Zhou said in a speech posted on the central bank's Web site. I would agree.

TRIPxCORE Is Zhou Xiaochuan an Economist?... What does Zhou Xiaochuan say about letting his countries currency float in a free market?...

He is not an economist per se. I would be willing to bet though that as the Governor of the People's Bank, he is well-versed in economics and is not a total idiot when it comes to trade imbalances. About letting the Yuan float, China's stance has long been opposed to a total free float. But with all the international pressure and the inconsistencies it is creating within their own economy, China is willing to let it move, little by little. This has been the recent trend and will continue, albeit with a broader range.

[Thaible]

Avoid the US dollar.

The new Fed chairman is purposefully devaluing the currency. It's the easiest way to pay off the deficit - just print money.

[opothai]

Avoid the US dollar.

The new Fed chairman is purposefully devaluing the currency. It's the easiest way to pay off the deficit - just print money.

100%

[sfokevin]

Avoid the US dollar.

The new Fed chairman is purposefully devaluing the currency. It's the easiest way to pay off the deficit - just print money.

Yikes!!! US Bashing...

It seems that the Federal Reserve is doing an economically sound move in response to the inbalance in the trade market - You attach some sinister motivations to their actions?...

Their actions are to let the market move to correct the inbalance - would you prefer they not let the market correct itself? Like say China?... To inforce an artificial value of US currency... How can such an artificial rate be maintained in a free market?.... I wonder what comes up in a Yahoo search of "Free Market" in China?... Sorry I am doing a bit of bashing too

[samran]

Avoid the US dollar.

The new Fed chairman is purposefully devaluing the currency. It's the easiest way to pay off the deficit - just print money.

How do you devalue a currency by making your interest rates relatively stronger against a basket of other currencues? Please explain?