Set Index And Thai Mutual Funds

[kblaze]

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.

I agree that the China data is a bit worrying, but its been out for a while and the market hasn't reacted to it. I believe its taken a back seat, along with Europe for now, to QE tapering worries, and thus the US numbers take precedence. Now im talking strictly about the effects on the SET

[yoshiwara]

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.

I agree that the China data is a bit worrying, but its been out for a while and the market hasn't reacted to it. I believe its taken a back seat, along with Europe for now, to QE tapering worries, and thus the US numbers take precedence. Now im talking strictly about the effects on the SET

Not sure I agree with you about China and Euroland taking a backseat, but even so the SET is partly a proxy play on China via soft commodities. I wouldn't be taking decisions on what the markets are necessarily doing today unless a day trader.

[kblaze]

What to watch, IMO, are Thursday's US retail sales and unemployment claims. Then next week, June 18 Fed meeting and June 20, China HSBC PMI and tons of important US data. Will be critical to see how the market reacts to any change in Fed language and that data.

[BlackJack]

seems that the markets are rigged to rise or fall when a mouse farts on the moon

very sensitive indeed

add to all this that the PM is the driver of the bus but the GPS is doing its own thing

seems like the debts being argued about in public maybe only the tip of the ice berg

[harryfrompattaya]

I am sorry to say Dow Closes above 16,450 while the below Set 1120 end of this year

Please do not be mad at me just act to be rich

Many are unable to be rich because they really want to be poor so they can watch their electric meter.

Forget the Electric meter

Cool Harry

[yoshiwara]

What to watch, IMO, are Thursday's US retail sales and unemployment claims. Then next week, June 18 Fed meeting and June 20, China HSBC PMI and tons of important US data. Will be critical to see how the market reacts to any change in Fed language and that data.

One can spend a lifetime watching.

[kblaze]

Thailand, Indonesia, Phil all getting crushed, seemingly on news from the BOJ meeting...

[fletchsmile]

For anyone holding ING Thai Big Cap Div LTF, this years distribution will be 1.75 baht/unit, payable on 12 June. Based on XD date and closing price of 31 May, that's around a 7.6% dividend yield based on the 31 May price.

That's also on top of a 12 month capital gain of around 40% for that 12 month period. (Excluding of course any tax benefit)

Including the tax benefit: for a 37% tax payer, a 100k investment on 31 May 2012 would have cost 63k. It would have been worth around 140k on 31 May 2013, and they'd have pocketed over 10k in dividends, so a total return of about 150k on an effective 63k = nice {= 130%+ gain. BTW: On the downside you'd have lost a few % of that since end May }

A bit further on tax planning:

I have to say this is the only dividend paying Thai mutual fund I hold. For many people it makes sense to buy a fund that doesn't pay dividends. The reason being is that Thai mutual fund dividends for someone resident in Thailand are taxed at either a flat 10% or your marginal rate (you choose). In contrast capital gains are tax free, so you might as well have a non-dividend paying fund, and just sell a few units to realise tax free capital gains.

So for most people something like ING Good Corp Governance Fund which is similar in nature (also LTF), but doesn't pay a dividend, would be more suitable than this.

Cheers

Fletch

Edited June 11, 2013 by fletchsmile

[harryfrompattaya]

Thailand, Indonesia, Phil all getting crushed, seemingly on news from the BOJ meeting...

Remember this happen before to many of us are to close to understand what is going on.

No reason for their great run ups now the run down

[maphraw]

I have a mutual fund with Krungsri Asset Management. The fund is called the Krungsri Star Equity Dividend Fund. (KFSEQ-D). I have had the fund for the past 12 years and have been very impressed with the dividend. Most years the dividend is paid twice. Morningstar rates the fund rather highly (for what that is worth). The dividend is paid directly into our savings account with Krungsri Bank. Compared with the dividends I get from my US mutual funds, the Krungsri fund is quite amazing. They have a reasonably good website which breaks down their fund expenses and holdings.

[fletchsmile]

I am sorry to say Dow Closes above 16,450 while the below Set 1120 end of this year

Please do not be mad at me just act to be rich

Many are unable to be rich because they really want to be poor so they can watch their electric meter.

Forget the Electric meter

Cool Harry

1120 looks a pretty severe drop to me. Looks unlikely - then again stranger things have happened.

If 1120 today that would be a P/E of 13.1. With earnings growth til end of year it would be close to 11 then = cheap.

If you're positioning yourself for that you also risk missing any gains if you're wrong. My expectation is the market will be higher at year end then start, but let's see.

To be honest though even a drop to 1120 is unlikely to make a long term investor "poor". After all it only takes it back to May 2012 levels.

Then again there's some well known bears been waiting for a "pull back" for a couple of years or so for the "right moment to get in" Meanwhile they missed: 2009 + 63%; 2010 +41 %; 2011 -1%; 2012 +36% on the SET.

So I think a bit of context is needed

Cheers

Fletch

[BlackJack]

August is when they approve (i think) the 3 trillion for infrastructure

should be a good time to get back in

[kblaze]

August is when they approve (i think) the 3 trillion for infrastructure

should be a good time to get back in

its 2 trillion baht, like 2.2. Its likely to be delayed until 2014, along with the water management projects

[fletchsmile]

On the Co-op bonds

I bought some of the 9.25% pref shares today - the market is more liquid than the bonds and the bid-offer spread narrower. They also seem to have stabilised in the last couple of weeks. What's interesting with the pref shares is that although non-cumulative there's a clause to receive 4/3 of the div in shares.

There was another article on Moneyweek yesterday. What's interesting is that the writer sees them as undervalued, whereas many of the blog posters are much more wary.

http://moneyweek.com/this-co-op-bond-is-seriously-undervalued/

My view is they're still high risk and speculative. If left to the Co-op group I see it being OK. If the govt intervenes though, that's where they largest risk and uncertainties arise.

Cheers

Fletch

[fletchsmile]

BTW - Real roller coaster of a ride on the SET today with some wild swings

[PCA]

BTW - Real roller coaster of a ride on the SET today with some wild swings

hehehe, you have a ticket so enjoy the ride,

[up-country_sinclair]

After today's 3% drop, the SET is down to 4.5% upside for 2013.

Edited June 18, 2013 by up-country_sinclair

[sas_cars]

Today's drop was expected due to Fed meeting, but how well the things started in the morning didn't really look that it'll end this way.

[BlackJack]

i bought funds on the rumour that

there was a 2 trillion infrastructure fund-daily being made less and less

high speed rails - now down to one I think

rice scheme - scam

etc.etc.

i sold on the facts

keep powder dry until some of these big ticket items are passed

second half should be better

see Thursday what helicopter Ben says

[churchill]

So is the general feeling Baht and SET down for now assuming Ben doesn't taper the tapering

[BlackJack]

moodys imf ben

all have something to say

if anything major happens in Thailand it will definitly have an impact

i think the politics are very far from stable

[kblaze]

ill be surprised if the SET isn't bloody today. And if US data beats tonite, tomorrow would likely be the same..

[BlackJack]

Moodys is doing Bernake bank speak to water down its comments on Thailand

on one page we have the rice farmers not happy with the NEW price of rice and another page we have Moodys and another about heads will roll if those in rice power get caught - mmmmm

seems like a cluster F to me

[jji23]

Either way things aren't looking good. Now a first time real test of nerves for me as I've built up a quite large holding, since May 22nd seen LTF gains fall by over 50%. Will continue to baht cost average every month and ride this through. Perhaps the market is now beginning to correct after years of artificial inflation due to QE. Just my humble opinion.

[kblaze]

Either way things aren't looking good. Now a first time real test of nerves for me as I've built up a quite large holding, since May 22nd seen LTF gains fall by over 50%. Will continue to baht cost average every month and ride this through. Perhaps the market is now beginning to correct after years of artificial inflation due to QE. Just my humble opinion.

your opinion is correct and echoes the consensus. Thailand is not helping itself with the rice scheme shenanigans and the increasing likelihood of delays in its much anticipated 350bn baht water scheme and 2 trn baht infrastructure plan. A lot of investors have built positions around these public investment plans; if delays are worse than expected, Thailand's suffering will be two fold, getting hit by QE drawdown and domestic ineptitude

[BlackJack]

Either way things aren't looking good. Now a first time real test of nerves for me as I've built up a quite large holding, since May 22nd seen LTF gains fall by over 50%. Will continue to baht cost average every month and ride this through. Perhaps the market is now beginning to correct after years of artificial inflation due to QE. Just my humble opinion.

your opinion is correct and echoes the consensus. Thailand is not helping itself with the rice scheme shenanigans and the increasing likelihood of delays in its much anticipated 350bn baht water scheme and 2 trn baht infrastructure plan. A lot of investors have built positions around these public investment plans; if delays are worse than expected, Thailand's suffering will be two fold, getting hit by QE drawdown and domestic ineptitude

A lot of investors have built positions around these public investment plans

So true

and when the smoke clears we reveal that it was nothing more than populist rhetoric

buy on the rhetoric eh?

[kblaze]

the part that sucks about all this is that we now have an overhang that could be in place for 3, 4, 5+ years. We are feeling the effects of talking about QE wind down. Then we have to go through the actual wind down. Then we have to go through the raising of interest rates after the wind down is completed. Thats years...

how does one plan a re-entry when you have that kind of overhang?

[BlackJack]

so true

it might be worth looking at individual shares or focused funds

ie telecommunications - even in the poorest areas I see mobile phones being used and with the new pay by phone systems this is likely to continue to be a good are for investment

ie food

ie fuel

funds that pay dividends - probably still better than bank interest

the end of the finacial year is nearly here and so sitting back until the dust settles may be prudent - not financial advice - DYOR

[Chensm]

If your find valuation of Thai stock is too high. your can invest regionally via Asean Trading Link. I find property stock in Malaysia still have value comparatively

[MrRealDeal]

the part that sucks about all this is that we now have an overhang that could be in place for 3, 4, 5+ years. We are feeling the effects of talking about QE wind down. Then we have to go through the actual wind down. Then we have to go through the raising of interest rates after the wind down is completed. Thats years...

how does one plan a re-entry when you have that kind of overhang?

You don't plan for re entry so much as make other investment in the meantime , since you believe that rates will rise you could short Notes or T-bills which will lose value as rates rise for example. Shorting the lowest rates in history is a pretty safe bet as long as you are sensible about it or use a Fund to do it for you.

Selling uncovered out of the money calls that you can cover is another way to profit from a dead or declining market and less risky than buying puts which profit well if your right but can go to zero if your not , the calls can be covered for the same basic profit even if your wrong and the market goes up.

As far as years from now and re entering goes you will be asking the same question if you are a long market only thinker, because as the bond shorting becomes less sensible it will be because rates have risen to a level that hurts the economy and the market so you will be stuck in the waiting game again if you only want to go long the market , at that point you should decide if you want to go long bonds or short the market rather than just sit in cash and wait for the bottom.

My overall point is that their are other sensible ways to make money than just going long the Stock Market or sitting in cash waiting for a bottom during the periods of time when the market is unlikely to do well.

Shorting bonds beginning in 2014-15 out as many years as you want will prove to be one of the best bond shorting periods of time in history and once it's over you may very well find yourself with enough money to simply go long bonds permanently and reduce your market risk while maintaining an income level you desire. But whatever happens you will surely have more to invest should you want to re enter the stock market then sitting in cash.

When the bond shorting stops , the market will make another bull run as rates are lowered and the reserve bank "put" comes into play again , that's the basic greed or suckers rally everyone gets caught up in , you could invest in it and probably should but with extreme caution using puts as a hedge for the inevitable "surprise" crash that you really want to invest in later , and selling calls is NOT the way to protect yourself. it's only a way to lose slightly less and have to keep buying new stock as it gets called away during the run up , calls are cheap making it lousy protection and puts are also cheap making them Great Real protection as you eventually make money and dump the stock assuming you bought just a few more puts than the stock you owned.

Having said all that the answer to your original question if you are a long only investor would be after the 3 stages of decline caused by 1 panic , 2 margin calls and 3 individual investors simply giving up and selling for 30 cents on the dollar instead of "nothing" creating a bottom with no one left to give up\sell. Which as you pointed out will be many years of waiting before it happens. Any other re entry is second guessing yourself and in my opinion the biggest mistake you can make as it's the opposite of what we should do which is to wait for the market to come to us not chase a market because we didn't pick the exact top or bottom.

After reading my post it sounds like I contradicted myself by saying the market will decline as rates peak but also saying as they are lowered we will have a bull run.... what I mean is that the decline will be brief and the rally brief as well overall creating a decline not worth shorting and a bull run inside a bear market not worth missing but not sensible to be unprotected in either as the decline will be fast and sharp leading to the Real investment opportunity as opposed to the other 2 phony ones.

Edited June 24, 2013 by MrRealDeal