webfact Posted May 6, 2013 Share Posted May 6, 2013 Thailand's boom is sustainable, unlike the one in 1997Carl BerrisfordBANGKOK: -- The strong rise in the Thai market reminds some of the financial crisis of 1997, but this time it is sustainableThai equities are a juggernaut. The MSCI Thai Index has been on an inexorable multi-year rise. Four of the top five performing equities funds sold in Hong Kong are invested in Thai stocks, according to the information company Lipper.The strong rally in Thai equity markets over the past year has left many battle-scarred investment veterans scratching their heads.There is a sense of déjà vu about the strong capital inflows, rising financial leverage, and red-hot property markets that Thailand is witnessing. In 1997, it was precisely these trends that precipitated the massive devaluation of the baht, which then triggered the Asian financial crisis and left Thailand virtually bankrupt.So the question investors might ask is, is Thailand's rally sustainable, or it is just undergoing another bubble that will eventually burst?I would argue the former. To get to that view, you need to appreciate the strength of investment trends under way in Thailand, and the powerfully positive effect of the recent stabilisation of the country's political situation.Full story: http://www.scmp.com/business/money/markets-investing/article/1230927/thailands-boom-sustainable-unlike-one-1997-- South China Morning Post 2013-05-06 Link to comment Share on other sites More sharing options...
Popular Post smutcakes Posted May 6, 2013 Popular Post Share Posted May 6, 2013 According to TVF the Thai economy is in dire straits, so i am not sure what this article is all about. 4 Link to comment Share on other sites More sharing options...
Popular Post Scully Posted May 6, 2013 Popular Post Share Posted May 6, 2013 According to TVF the Thai economy is in dire straits, so i am not sure what this article is all about. Carl Berrisford is an analyst for UBS CIO Wealth Management Research I have just had the pleasure of reading some of his articles and he has 100% no vested interest 3 Link to comment Share on other sites More sharing options...
Popular Post impulse Posted May 6, 2013 Popular Post Share Posted May 6, 2013 It's different this time. Really, it is....trust us. 4 Link to comment Share on other sites More sharing options...
BrianCR Posted May 6, 2013 Share Posted May 6, 2013 It's different this time. Really, it is....trust us. Do we trust anybody? This report is by a western company... your comment is usually reserved for Thai's. Perhaps this starts a new chain of postings on TV (the whole world is against us!) Link to comment Share on other sites More sharing options...
Popular Post Issangeorge Posted May 6, 2013 Popular Post Share Posted May 6, 2013 Berrisford should come to Isaan and see all the short time hotels that have just been built with no customers, and all the big box stores with more staff than customers. Not to memtion all the used car lots springing up everwhere. I really don't think these are sustainable. Something has to give. Sent from my i-mobile IQ 6 using Thaivisa Connect Thailand mobile app 7 Link to comment Share on other sites More sharing options...
Popular Post impulse Posted May 6, 2013 Popular Post Share Posted May 6, 2013 (edited) It's different this time. Really, it is....trust us. Do we trust anybody? This report is by a western company... your comment is usually reserved for Thai's. Perhaps this starts a new chain of postings on TV (the whole world is against us!) My comment was not a slam at all on Thailand. If it walks like a duck, quacks like a duck and... This looks like a bubble, returns and growth with no underlying fundamentals, and a bunch of "experts" telling us why it's for real this time. Like the dotcoms, ENRON, the housing bubble, CDO's and... (need I go on?) Edited May 6, 2013 by impulse 7 Link to comment Share on other sites More sharing options...
waza Posted May 6, 2013 Share Posted May 6, 2013 "So the question investors might ask is, is Thailand's rally sustainable, or it is just undergoing another bubble that will eventually burst? I would argue the former...............The most important driver is a government infrastructure spending programme to the tune of 1.9 trillion baht (HK$498 billion), with the peak of the spending outlays occurring in 2016-17." So this sustainable stock market boom is all dependant on the PTP government borrowing 2.2 trillion baht and spending at least 1.9 trillion on infrastructure. Slim chance of that. 2 Link to comment Share on other sites More sharing options...
Popular Post Naam Posted May 6, 2013 Popular Post Share Posted May 6, 2013 only 7 negative remarks? most TV economists must be still sleeping 6 Link to comment Share on other sites More sharing options...
Popular Post Ianatlarge Posted May 6, 2013 Popular Post Share Posted May 6, 2013 I have no idea, but, when I hear the financial experts tell me not to worry, I worry. 3 Link to comment Share on other sites More sharing options...
MichaelJohn Posted May 6, 2013 Share Posted May 6, 2013 I think of it like a PONSI scheme - as long as you can keep kidding people they'll keep investing and the scheme will continue. Once they stop investing it falls in a heap. I also believe that anyone who lives in Thailand and sees first hand the investment/return/condo market etc etc will seriously question when it will all fall in a heap (not that I have any wish for it to do so). However, as long as big investors, foreign govts and the like keep believing; then the PONSI scheme will continue. But, the only thing that is a fact (substantiated by history), all booms come to an end sometime. The way they end (quietly or spectacularly), is the thing we don't know. 1 Link to comment Share on other sites More sharing options...
Badbanker Posted May 6, 2013 Share Posted May 6, 2013 (edited) I love markets like this! After 26 years of living here I am once again looking for lots of cheap condos and houses shortly after the crash happens. I am sorry, the sort of investment I see in condos is not sustainable. In 1998 after the crash I had a friend who bought a huge 300 meter condo in soi 11 for 4 million and another bought a 250 meter one in soi 8 for 3 million. Since then they have more than quadrupled in value. Bring on the Bubbles! Edited May 6, 2013 by Badbanker Link to comment Share on other sites More sharing options...
Ricardo Posted May 6, 2013 Share Posted May 6, 2013 Thailand's growth may be sustainable, or it might not, but with things like the rice-scam & 50-year borrowing for 30%-corruption infrastructure-spending, or the apparent property-bubble, my own opinion/money tends towards its' not lasting forever ... Perhaps I'm too cautious ? 2 Link to comment Share on other sites More sharing options...
chiang mai Posted May 6, 2013 Share Posted May 6, 2013 Where's NS, I suspect he may have a view on all of this? 1 Link to comment Share on other sites More sharing options...
aTomsLife Posted May 6, 2013 Share Posted May 6, 2013 Thailand's growth may be sustainable, or it might not, but with things like the rice-scam & 50-year borrowing for 30%-corruption infrastructure-spending, or the apparent property-bubble, my own opinion/money tends towards its' not lasting forever ... Perhaps I'm too cautious ? Maybe too cautious in the short-term, but I believe you'll be proved prescient in due time. It's unfortunate, of course, as Thailand seems to be reaching critical mass with regard to a self sustaining consumer class. But all the reasons you list highlight why that class may have a hard time holding on to their new found spending power. Just my 2-bahts worth. Link to comment Share on other sites More sharing options...
Thai at Heart Posted May 6, 2013 Share Posted May 6, 2013 There are little or no planning or land use laws to control construction. Until they sort this out, it is extremely difficult to keep a lid on property bubbles. How much of GDP growth is allocated to construction? Can't find a number. Can they dodge a crash, yes, but to do so, they need to pull the air out of the property bubble gently. Link to comment Share on other sites More sharing options...
Neilly Posted May 6, 2013 Share Posted May 6, 2013 These all give strong support to the argument that a sustainable longer-term rally is plausible for Thai equities on the back of the new investment cycle, as long as domestic politics and public finances remain in check. A nice little 'get-out' clause Link to comment Share on other sites More sharing options...
KhunHehe Posted May 6, 2013 Share Posted May 6, 2013 Thanks for calling the top. Link to comment Share on other sites More sharing options...
thomash Posted May 6, 2013 Share Posted May 6, 2013 What goes up must come down it is the law of gravity and economics, also I am sure they were saying a similar thing before the crash in 97! Link to comment Share on other sites More sharing options...
chiang mai Posted May 6, 2013 Share Posted May 6, 2013 What goes up must come down it is the law of gravity and economics, also I am sure they were saying a similar thing before the crash in 97! There's no comparison between now and 1997, in 1997 there was no central bank for starters! Link to comment Share on other sites More sharing options...
drdoom6996 Posted May 6, 2013 Share Posted May 6, 2013 Carl Berrisford needs to do a little more homework. Recent political stability? Every bubble bursts. Link to comment Share on other sites More sharing options...
givenall Posted May 6, 2013 Share Posted May 6, 2013 It is very hard to listen to these idiots telling everything are always good, even if they are telling the truth, feels like a lie. Thai people must have very high tolerance for incompetent officials Link to comment Share on other sites More sharing options...
wprime Posted May 6, 2013 Share Posted May 6, 2013 It is very hard to listen to these idiots telling everything are always good, even if they are telling the truth, feels like a lie. Thai people must have very high tolerance for incompetent officials Same everywhere else in the world, media negativity encourages financial collapse. Better to bend the truth a bit. Thailand's current boom is due to heavy government spending encouraging foreign investment. Investment and trade has increased but the nation is getting poorer, when investment slows, we will get a recession. Link to comment Share on other sites More sharing options...
rubl Posted May 6, 2013 Share Posted May 6, 2013 As for the Bank of Thailand (aka Central Bank) not being in place in 1997 may be a quick look at the wiki page is required to correct some misconception. Some info seem to come directly from the BoT website.http://en.wikipedia.org/wiki/Bank_of_thailandhttp://www.bot.or.th/English/AboutBOT/Pages/index.aspx Link to comment Share on other sites More sharing options...
brd199 Posted May 6, 2013 Share Posted May 6, 2013 There's no comparison between now and 1997, in 1997 there was no central bank for starters! As for the Bank of Thailand (aka Central Bank) not being in place in 1997 may be a quick look at the wiki page is required to correct some misconception. Some info seem to come directly from the BoT website. http://en.wikipedia.org/wiki/Bank_of_thailand http://www.bot.or.th/English/AboutBOT/Pages/index.aspx aww c'mon. He's only 50+ years off. above link: The Bank of Thailand started operations on 10 December 1942. Link to comment Share on other sites More sharing options...
brd199 Posted May 6, 2013 Share Posted May 6, 2013 Carl Berrisford needs to do a little more homework. Recent political stability? That's the downside of reporting on Thailand from an office building in Hong Kong. Link to comment Share on other sites More sharing options...
Popular Post impulse Posted May 6, 2013 Popular Post Share Posted May 6, 2013 (edited) 19 negative postings, all from certified gurus. keep up the good job boys Yeah, the real gurus like this guy have done such a great job calling the last oh, dozen bubbles? I think my Ouija board and that black 8 ball I had as a kid were more reliable. Except they didn't get rich lying to me. Edited May 6, 2013 by impulse 3 Link to comment Share on other sites More sharing options...
whiteman Posted May 6, 2013 Share Posted May 6, 2013 Well I have been in the 2nd liners in the thai sharemarket and done very well thank you ( example Demco 3.80 now 17) + divs at 4+% on the way so it would have to be a mighty big correction for me to go back into the red some of you guys just missed the boat thats all. Link to comment Share on other sites More sharing options...
asiamint Posted May 6, 2013 Share Posted May 6, 2013 Thailands needs to change business and property laws for the bubble to go on longer Link to comment Share on other sites More sharing options...
davejones Posted May 6, 2013 Share Posted May 6, 2013 The higher it gets, the more risky it gets. It might continue for a while, but the risks are more on the downside after such a meteoric rise. With so many funds invested here, there can't many many left to buy, which means any small panic could lead to big losses, as many dump stocks that have already made them a fortune. During the lows of 1997 was the time to buy, nit during the highs of 2013. Of course, I could be wrong. 2 Link to comment Share on other sites More sharing options...
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