Set Index And Thai Mutual Funds

topt · June 3, 2013

13% perpetual subordinate

ouch!

Co-Op 13%.jpg

Not good if you were already holding but that is what made it more interesting for Fletch to take a punt.....will be interesting to see any movement today following that Sunday Telegraph article.

Naam · June 3, 2013

13% perpetual subordinate

ouch!

Co-Op 13%.jpg

Not good if you were already holding but that is what made it more interesting for Fletch to take a punt.....will be interesting to see any movement today following that Sunday Telegraph article.

i don't expect much movement. the bad news were availble since days.

cheeryble · June 3, 2013

sold recently subs of Lloyds and Royal Bank of Scotland because of potential calls

and inspite of reasonably high yields. "A" rated subs of sound financial institutions

without possibility of call still yield 6-7% which is infinitely more than i am getting

on cash USD, GBP or €UR where my yield is zero.

Really Herr Naam you can get 6-7% on non callable?

I'd like some of that!

I've recently halted an order for HCS (HSBC preferreds) ........yielding about the same......because recent calls by financials elsewhere make it unlikely HCS will remain uncalled and will be reissued at more advantageous rates for HSBC.

With HCS one must also take the risk of losing the premium over the $25 issue price which last time I looked was equal to over 6 months yield, I think 8.

Edited June 3, 2013 by cheeryble

Naam · June 3, 2013

sold recently subs of Lloyds and Royal Bank of Scotland because of potential calls

and inspite of reasonably high yields. "A" rated subs of sound financial institutions

without possibility of call still yield 6-7% which is infinitely more than i am getting

on cash USD, GBP or €UR where my yield is zero.

Really Herr Naam you can get 6-7% on non callable?
I'd like some of that!

I've recently halted an order for HCS (HSBC preferreds) ........yielding about the same......because recent calls by financials elsewhere make it unlikely HCS will remain uncalled and will be reissued at more advantageous rates for HSBC.

With HCS one must also take the risk of losing the premium over the $25 issue price which last time I looked was equal to over 6 months yield, I think 8.

when i say "non callable" i mean for at least 9-10 years. alternatives are bonds priced below par where calls at par won't do any harm. but the selection is less and less. i have therefore opted for higher risks and try to balance that risk with a higher cash quota. i also don't mind a call in 2020 of a T1 that trades one tick or two above par as long as the yield is double digit e.g. XS0456513711 which yields presently 10.10%

Naam · June 3, 2013

Really Herr Naam you can get 6-7% on non callable?
I'd like some of that!

open a new thread Honourable Sir Cheeryble, Esq. i don't want to hijack "SET/Thai"

yoshiwara · June 3, 2013

13% perpetual subordinate

ouch!

Co-Op 13%.jpg

Not good if you were already holding but that is what made it more interesting for Fletch to take a punt.....will be interesting to see any movement today following that Sunday Telegraph article.
i don't expect much movement. the bad news were availble since days.

Speaking as a member of the Co-Op I am now deeply worried about my next divi.

Years back I knew a very committed member who purchased all of his clothes from the Co-Op. Sexy man he did not look.

fletchsmile · June 3, 2013

13% perpetual subordinate

ouch!

Co-Op 13%.jpg

Not good if you were already holding but that is what made it more interesting for Fletch to take a punt.....will be interesting to see any movement today following that Sunday Telegraph article.

i don't expect much movement. the bad news were availble since days.

Yes, I think a lot of the bad news is built in - hence the buying in the Co-op's "half price sale"

I'm looking for 7% as a budgeted long term return rate for my overall investment portfolio, and as you highlight that sort of yield isn't easy to find outside long term equity holdings. This one has the added bonus of being non-callable. The 5.555% sub perp bond also yield double digits, but are callable - the interesting thing there is that the coupon if I remember rightly resets and would provide some hedge vs infation/ rising rates in future if not called. So I prefered the higher non-callable yield on the 13%.

I'd be interested in THB fixed income but the yields are poor - around 3.5% on 10 year sovereign, and 4% on 20 year sovereign. With local Thai corporates you're lucky to get more than a couple of hundred basis points above those for investment grade. Hardly attractive.

All this QE and low interest rates is really driving a TINA ("there is no alternative") mentality around the world and pushing people into equities or high yield bonds - as cash, gov bonds, and gold don't look attractive at the moment. When globally things pick up, and interest rates start to move up as well, gov bonds and gold will look even worse!

Fletch

cheeryble · June 3, 2013

This excellent article by Oliver Butt may be worth reading for you Fletch.

http://www.investorsintelligence.co.uk/2013/05/15/co-op-bond-13-ex-pib-perpetual-bond-of-the-week/

ps Yoshiwara

Speaking as a member of the Co-Op I am now deeply worried about my next divi.

....But they are at least cumulative?

Edited June 3, 2013 by cheeryble

Naam · June 3, 2013

This excellent article by Oliver Butt may be worth reading for you Fletch.

http://www.investorsintelligence.co.uk/2013/05/15/co-op-bond-13-ex-pib-perpetual-bond-of-the-week/

ps Yoshiwara

Speaking as a member of the Co-Op I am now deeply worried about my next divi.

....But they are at least cumulative?

cumulative T1s are as rare as hen's teeth. i know only two.

Naam · June 3, 2013

I'm looking for 7% as a budgeted long term return rate for my overall
investment portfolio, and as you highlight that sort of yield isn't easy
to find outside long term equity holdings. This one has the added bonus
of being non-callable. The 5.555% sub perp bond also yield double
digits, but are callable - the interesting thing there is that the
coupon if I remember rightly resets and would provide some hedge vs
infation/ rising rates in future if not called. So I prefered the higher
non-callable yield on the 13%.

Fletch,

may i humble remind an expert on "Basel" that Basel III makes it possible

that non-callables can be called? i'd bet my [not so] sweet butt that the

13% will be gone not later than 5 years from now and that the 5.555%

is safe from a call. that is of course if Basel III will ever come fully into effect.

i would also like to draw your attention what happened to SNS T1s and LT2s

last february. poof! gone with the wind. bondholders expropriated.

Naam · June 3, 2013

This excellent article by Oliver Butt may be worth reading for you Fletch.

http://www.investorsintelligence.co.uk/2013/05/15/co-op-bond-13-ex-pib-perpetual-bond-of-the-week/

ps Yoshiwara

Speaking as a member of the Co-Op I am now deeply worried about my next divi.

....But they are at least cumulative?

cumulative T1s are as rare as hen's teeth. i know only two.

just checked. the Co-Op 13% is a UT2 = cumulative!

cheeryble · June 3, 2013

Thanx for looking that up mein Erzherzog Naam

Cumulative makes it a really last resort for a company to miss a dividend.

Might be worth a punt!.....15%'s a spicy meatball

jji23 · June 6, 2013

This has been the performance of my BKKBANKLTF since the start of May. What're your thoughts on its performance and what forces do you think are causing this drop?

Cheers

Naam · June 6, 2013

Thanx for looking that up mein Erzherzog Naam

Cumulative makes it a really last resort for a company to miss a dividend.

Might be worth a punt!.....15%'s a spicy meatball

personally i think it's not time to buy anything but realise profits. i know cash at zero percent hurts but...

cheeryble · June 6, 2013

personally i think it's not time to buy anything but realise profits. i know cash at zero percent hurts but...

It may be true, and I cashed out on half my mReits a little while ago.

I have been getting into a handful of preferreds which should be stable and keep performing in a down or up market.

Been too scared to look at my account recently but just noticed I had put in two Limit Orders at lowering prices for TOO-A (TOO-PRA), never expecting they'd be hit. Well the price drifted down and I now am the owner of a tanker company with lovely big red ships which look awfully well-kept......at a modest premium over $25 paying 7.25% may be good for the long haul.

kblaze · June 6, 2013

ImageUploadedByThaivisa Connect Thailand1370478722.538187.jpg

This has been the performance of my BKKBANKLTF since the start of May. What're your thoughts on its performance and what forces do you think are causing this drop?

Cheers

May 22 - See how that is the real point when your chart starts sliding. Bernanke. The comments. Money is flying out of SEA and other emerging markets.

Edited June 6, 2013 by kblaze

Firefan · June 6, 2013

Phronesis; could you please protect me, as you said, by informing me the answer to your 1-2-3 questions? Cheers!

BlackJack · June 6, 2013

ImageUploadedByThaivisa Connect Thailand1370478722.538187.jpg

This has been the performance of my BKKBANKLTF since the start of May. What're your thoughts on its performance and what forces do you think are causing this drop?

Cheers

well these drops coincidentally happened the same time as the drop in interest rates - then coincidentally s/loads of money started to leave Thailand - then coincidentally a large fund investor pulled 4 billion dollars DOLLARS out of Thailand and stuck it in Vietnam - then coincidentally ratings agencies started talking about dropping Thailands ratings a notch - then coincidentally the Thai rice pledging scheme SUDDENLY became a huge hole in the ground and Yingluck said I really really really want to know how bad this is and how big is the hole - then the 2 head honcho's of finance in Thailand started brawling in public and started running around saying the sky was falling and then coincidentally they said they wanted to relaunch the ELITE card and that was it - money started to pour out of Thailand

I hope this helps

PS if youre and American then it's all easily explained by "sell in May and go away"

jji23 · June 7, 2013

Great replies. Down again today! Considering selling holding and buying in again once it looks like bottoming out.

fletchsmile · June 8, 2013

Phronesis; could you please protect me, as you said, by informing me the answer to your 1-2-3 questions? Cheers!

As kblaze highlighted Phronesis didn't really seem to know what he was talking about, or at best had half a story. Algo trading is already available for retail investors.

I asked a friend working for securities company and he confirmed that. He also confirmed it is much more something for institutions rather than retail in Thailand, as already posted. He suggested TSD for training courses, and Bualuang Securities' Iprogramme Trade (linked to Bangkok Bank) if you wanted to trade now rather than wait for Phronesis company to bring it out ...lol.

For short ETFs they are not available yet due to SEC regulations. Anyone who's been around Thailand for a while doesn't hold their breath, and waits for an announcement from the regulator, to avoid wasting time. Meanwhile if you wish to short trade Thailand equities you can use TFEX futures and options.

Neither short ETFs nor algo trading are something I'd be interested in for Thailand

Cheers

Fletch

fletchsmile · June 8, 2013

ImageUploadedByThaivisa Connect Thailand1370478722.538187.jpg

This has been the performance of my BKKBANKLTF since the start of May. What're your thoughts on its performance and what forces do you think are causing this drop?

Cheers

As kblaze mentioned, it's really been the last 10 days of May, where markets dropped. This has been pretty much globally driven, and not unique to Thailand.

Personally I feel a bit more comfortable it has pulled back a bit and now on a P/E of around 17. This reduces the chances of a big drop/crash.

If I was investing long term and baht cost averaging, I'd be happy to continue drip feeding Thailand as one of my favourite markets. Whereas at start of the thread I said perhaps reduce the drip feed, that still applies, though am less worried about it now.

In terms of LTF investments it doesn't make sense to me and sell and try and buy in again later at a lower price as:

1) Timing Thai market is always difficult

2) No point paying the tax penalty for doing so, and losing that benefit

I think the SET will be higher than now at year end, and am much more certain it will be higher in 5-10 years from now. So if looking to invest long term I'd stick with it,

Cheers

Fletch

fletchsmile · June 8, 2013

JJ

In terms of recent activity it's actually a good reminder of the difficulties of timing Thai markets. Also more or less the day after someone posted above about selling and looking to buy back later, the markets rose 1.75% next day.

KGI actually would say the opposite to the suggestion of trying to get a lower price, and saw the recent activity as a chance to add more. In contrast to those waiting for lower levels who may miss out. "Increase position....."

http://research.kgieworld.co.th/recom.nsf/0/0BF34C95D0ECD8E347257B83000333DB/$file/Daily+Story_Strategy_2013_06_07_e_th.pdf

I've seen people often get caught by this in Thailand. The market falls, so they get worried and sell. Then two things often happen more often than not:

- The market turns and they have therefore sold low and need to buy high

- They never get the right time to enter again, and wait for lower lows. Before they know it the markets has drifted higher and they never managed to get back in.

BTW Mutual funds/ unit trusts also don't really suit short term horizons because of fees. If someone want short term trading an ETF is better. Mutual funds and baht cost averaging should be longer term strategies - don't focus / worry too much on short term volatilty. Accept sometimes you'll be down and sometimes even losing money - that's the nature of markets - but long term you should be up.

BTW2, 2008 Was a great example of difficulties of timing the Thai markets. I know:

- People who were too scared to be in the market, and waiting for better opportunities

- People who sold after the correction (sold low) and were scared they may lose more

Both of these categories never found the "right time" to get back in

Personally I just carried on baht cost averaging and buying through it all at the same rate. I took around 40% hit in that single year of 2008, but in 2009 was up 65%, 2010 up 45%, and in 2008 had also benefited from buying more units at lower prices.

I don't know anyone who timed the exit and the entrance levels in that period. Most people got at least one wrong, and many of those who tried bot both wrong.

Stick with the old adage of "time in the markets" vs "timing the markets" for Thailand. Expect a bumpy ride, and even to be down sometimes. That's the risk for the higher returns, so don't focus too much on short term. Also LTFs are great as they provide an extra cushion with the tax

Edited June 8, 2013 by fletchsmile

sas_cars · June 8, 2013

JJ

In terms of recent activity it's actually a good reminder of the difficulties of timing Thai markets. Also more or less the day after someone posted above about selling and looking to buy back later, the markets rose 1.75% next day.

KGI actually would say the opposite to the suggestion of trying to get a lower price, and saw the recent activity as a chance to add more. In contrast to those waiting for lower levels who may miss out. "Increase position....."

http://research.kgieworld.co.th/recom.nsf/0/0BF34C95D0ECD8E347257B83000333DB/$file/Daily+Story_Strategy_2013_06_07_e_th.pdf

I've seen people often get caught by this in Thailand. The market falls, so they get worried and sell. Then two things often happen more often than not:

- The market turns and they have therefore sold low and need to buy high

- They never get the right time to enter again, and wait for lower lows. Before they know it the markets has drifted higher and they never managed to get back in.

BTW Mutual funds/ unit trusts also don't really suit short term horizons because of fees. If someone want short term trading an ETF is better. Mutual funds and baht cost averaging should be longer term strategies - don't focus / worry too much on short term volatilty. Accept sometimes you'll be down and sometimes even losing money - that's the nature of markets - but long term you should be up.

BTW2, 2008 Was a great example of difficulties of timing the Thai markets. I know:

- People who were too scared to be in the market, and waiting for better opportunities

- People who sold after the correction (sold low) and were scared they may lose more

Both of these categories never found the "right time" to get back in

Personally I just carried on baht cost averaging and buying through it all at the same rate. I took around 40% hit in that single year of 2008, but in 2009 was up 65%, 2010 up 45%, and in 2008 had also benefited from buying more units at lower prices.

I don't know anyone who timed the exit and the entrance levels in that period. Most people got at least one wrong, and many of those who tried bot both wrong.

Stick with the old adage of "time in the markets" vs "timing the markets" for Thailand. Expect a bumpy ride, and even to be down sometimes. That's the risk for the higher returns, so don't focus too much on short term. Also LTFs are great as they provide an extra cushion with the tax

An excellent piece of advice that is.

BTW, I just bought my first thai mutual fund in last week of May, and this was jolted badly during last week, down 10 %, but I took this opportunity and kept topping up nearly every day of the week, so now my NAV is much lower than when I actually made my first purchase just 10 days ago or so. And the fund has already started rebounding back since yesterday. Even though I don't want it to rebound just yet, want it to keep low and give me some more time to keep topping up. lol

BlackJack · June 9, 2013

Lots of good replies here

thanks

I agree with the LT on these funds

and I try to look at the big picture for Thailand

The 3 trillion infrastructure loan and funding of these projects will have a nice upward impact on certain Thai stocks - think steel, cement, fuel, etc

and with China on the doorstep think food and what a great place Thailand is to support this hungry giant. Some figures I read say that CHina requires 20% of the Worlds food supply as it can only grow 9% locally - so 11% needs to be imported - Thailand is well placed to meet this growing demand.

The Bualuang top 10 fund should do well IMO - also UOBSDF is a great performer

yoshiwara · June 9, 2013

JJ

In terms of recent activity it's actually a good reminder of the difficulties of timing Thai markets. Also more or less the day after someone posted above about selling and looking to buy back later, the markets rose 1.75% next day.

KGI actually would say the opposite to the suggestion of trying to get a lower price, and saw the recent activity as a chance to add more. In contrast to those waiting for lower levels who may miss out. "Increase position....."

http://research.kgieworld.co.th/recom.nsf/0/0BF34C95D0ECD8E347257B83000333DB/$file/Daily+Story_Strategy_2013_06_07_e_th.pdf

I've seen people often get caught by this in Thailand. The market falls, so they get worried and sell. Then two things often happen more often than not:

- The market turns and they have therefore sold low and need to buy high

- They never get the right time to enter again, and wait for lower lows. Before they know it the markets has drifted higher and they never managed to get back in.

BTW Mutual funds/ unit trusts also don't really suit short term horizons because of fees. If someone want short term trading an ETF is better. Mutual funds and baht cost averaging should be longer term strategies - don't focus / worry too much on short term volatilty. Accept sometimes you'll be down and sometimes even losing money - that's the nature of markets - but long term you should be up.

BTW2, 2008 Was a great example of difficulties of timing the Thai markets. I know:

- People who were too scared to be in the market, and waiting for better opportunities

- People who sold after the correction (sold low) and were scared they may lose more

Both of these categories never found the "right time" to get back in

Personally I just carried on baht cost averaging and buying through it all at the same rate. I took around 40% hit in that single year of 2008, but in 2009 was up 65%, 2010 up 45%, and in 2008 had also benefited from buying more units at lower prices.

I don't know anyone who timed the exit and the entrance levels in that period. Most people got at least one wrong, and many of those who tried bot both wrong.

Stick with the old adage of "time in the markets" vs "timing the markets" for Thailand. Expect a bumpy ride, and even to be down sometimes. That's the risk for the higher returns, so don't focus too much on short term. Also LTFs are great as they provide an extra cushion with the tax

An excellent piece of advice that is.
BTW, I just bought my first thai mutual fund in last week of May, and this was jolted badly during last week, down 10 %, but I took this opportunity and kept topping up nearly every day of the week, so now my NAV is much lower than when I actually made my first purchase just 10 days ago or so. And the fund has already started rebounding back since yesterday. Even though I don't want it to rebound just yet, want it to keep low and give me some more time to keep topping up. lol

Tomorrow Monday will be interesting for the Asian markets as they will be responding to the Friday performance of the DOW and US employment figures. Friday appeared to be a buying opportunity and yes I did buy but not the SET.

kblaze · June 10, 2013

and we are off to a strong start! SET up 22pts. I had thought that a strong jobs report on friday would be bad for markets today, but its a tough thing because +175k is good but not that strong, to add fuel to the "start the tapering" crowd. 200K+ would be something of real significance. And it wasn't a bad number, like sub-100K, which would strengthen the "hold off on tapering" case. So it seems we are kind of stuck in limbo in that regard. But the US market jumped on friday after the number and the Nikkei and now the SET seem to be doing well.

Perhaps the post-Bernanke comment cooldown was just a hiccup in this bull market...we shall see.

sas_cars · June 10, 2013

and we are off to a strong start! SET up 22pts. I had thought that a strong jobs report on friday would be bad for markets today, but its a tough thing because +175k is good but not that strong, to add fuel to the "start the tapering" crowd. 200K+ would be something of real significance. And it wasn't a bad number, like sub-100K, which would strengthen the "hold off on tapering" case. So it seems we are kind of stuck in limbo in that regard. But the US market jumped on friday after the number and the Nikkei and now the SET seem to be doing well.

Perhaps the post-Bernanke comment cooldown was just a hiccup in this bull market...we shall see.

So you mean the SET will start rallying again for the time being?

kblaze · June 10, 2013

and we are off to a strong start! SET up 22pts. I had thought that a strong jobs report on friday would be bad for markets today, but its a tough thing because +175k is good but not that strong, to add fuel to the "start the tapering" crowd. 200K+ would be something of real significance. And it wasn't a bad number, like sub-100K, which would strengthen the "hold off on tapering" case. So it seems we are kind of stuck in limbo in that regard. But the US market jumped on friday after the number and the Nikkei and now the SET seem to be doing well.

Perhaps the post-Bernanke comment cooldown was just a hiccup in this bull market...we shall see.

So you mean the SET will start rallying again for the time being?

It could, we'll just have to see if foreigners are net sellers or net buyers over the next couple of days. If we see a string of steady foreigners net buyers, then that could indicate that the May22-June6 flight of capital out of emerging markets has ebbed and the bulls could return.

we shall see...

BlackJack · June 10, 2013

meanwhile your money's on the table

wait and see is a bet on the outcome

however the trend line looks positive

yoshiwara · June 10, 2013

and we are off to a strong start! SET up 22pts. I had thought that a strong jobs report on friday would be bad for markets today, but its a tough thing because +175k is good but not that strong, to add fuel to the "start the tapering" crowd. 200K+ would be something of real significance. And it wasn't a bad number, like sub-100K, which would strengthen the "hold off on tapering" case. So it seems we are kind of stuck in limbo in that regard. But the US market jumped on friday after the number and the Nikkei and now the SET seem to be doing well.

Perhaps the post-Bernanke comment cooldown was just a hiccup in this bull market...we shall see.

Careful. The data out of Mainland China was not too hot today. China markets closed through to weds. Hold the horses.

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