Thai stock market remains attractive despite index plunge

[webfact]

Thai stock market remains attractive despite index plunge
By English News



BANGKOK, June 13 - Foreign investors will continue their long-term investment in the Thai bourse despite an index plunge for almost two weeks, according to an executive of the Stock Exchange of Thailand (SET).

Pakorn Peetathawatchai, SET executive vice president, said the MSCI indices on the investment ratio and attractiveness of the Thai stock market remain unchanged and the current capital outflows should be only short term.

Investors in the Thai stock market are more diverse with newcomers and asset management institutions which have initiated stock funds by 39.4 per cent more than last year, apparently in accord with the higher SET index, he said, adding that trading volume has increased from Bt7-8 billion to Bt12 billion a day.

He said stock indices in the TIP group -- Thailand, Indonesia and the Philippines --dropped sharply with Thailand at 7.01 per cent, the Philippines at 6.63 per cent and Indonesia at 9.05 per cent during June 1-11.

However, the stock market sentiment will remain volatile from the global economic impact and a close monitoring of the US quantitative easing is necessary.

Thailand's fundamentals remain strong and the government's investment infrastructure development will stimulate the economy this year, he said. (MCOT online news)


-- TNA 2013-06-13

[Payboy]

Down 67 points today and counting.

[canopus1969]

Will soon be time to buy back in

[kblaze]

1350 would put the 2014 SET PE at historical average...and good god we are just about there.

[yoshiwara]

Will soon be time to buy back in

Not for those who are fully invested.

Currently down 4.55% today.

Edited June 13, 2013 by yoshiwara

[canopus1969]

Will soon be time to buy back in

Not for those who are fully invested.

Currently down 4.55% today.

Sorry to hear that

[Morakot]

Down 67 points today and counting.

Yes, but MOCT is making such an effort in highlighting the feel-good aspects of the story.

[kblaze]

crazy day...from being down almost 80 pts...to "only" 30 pts...

[upena]

"Foreign investors will continue their long-term investment in the Thai bourse despite an index plunge for almost two weeks"

Says one man

[techboy]

Down 67 points today and counting.

It would bother me more if the market did not correct at the frothy levels that it had reached. But I am certain that it is not necessary to point this out to one with your knowledge of such matters.

[Payboy]

Down 67 points today and counting.

It would bother me more if the market did not correct at the frothy levels that it had reached. But I am certain that it is not necessary to point this out to one with your knowledge of such matters.

No please tell me more. I know nothing about stocks.

[webfact]

Stock plunge 'temporary'
The Nation



Experts believe fundamentals will bring buyers back to the market

BANGKOK: -- The Thai stock market should "stop the bleeding" soon after the selling spree by foreign investors ends and the true attractiveness of the economy and of private companies shine again, financial authorities and market observers said.

The Stock Exchange of Thailand bled heavily over the past three days, losing 125.28 points, or 8.2 per cent. Yesterday's close of 1,403.27 points was up only 0.81 per cent from 1,391.93 at the end of last year. Against this year's peak of 1,643.40 in May - which was the highest level in 19 years - it has lost 14.6 per cent.

The foreigners' selling spree was sparked by improvement in some economic indicators in the US. Though mixed, the data are on balance better than they have been. The euro zone also showed better-than-expected data in manufacturing in May, while emerging markets showed slower growth. In its Global Economic Prospects report, the World Bank, which cut its global forecast from 2.4 per cent to 2.2 per cent, foresees slower growth rates among emerging markets in 2013. Speculation is running high that the US Federal Reserve will taper its quantitative easing (QE), lessening its monthly injections from the US$85 billion (Bt2.61 trillion) at present.

Bank of Thailand (BOT) Governor Prasarn Trairatvorakul admitted that foreign funds had flowed out of the stock market as well as bond markets recently. Some had left the country abruptly, causing the baht to suddenly weaken and forcing the central bank to intervene to stabilise the foreign exchange market.

The intervention supports the baht and unloads some of the foreign reserves accumulated in the first months of this year. Prasarn noted that in doing so, the BOT has tried not to move against the market movement. He admitted that the weaker baht could slightly push up inflation, as Thailand remains a net energy importer. However, the impact would be minimised on comparatively low energy prices.

As a result of intervention, the baht managed to rise to 30.92 per dollar at 3.17pm, after opening at 31.06 - the lowest level in nine months. The baht has also weakened against the euro and Japanese yen. It opened at 41.48 against the euro yesterday, down 5.31 per cent from end-May. Meanwhile, per 100 yen, it depreciated by 7.73 per cent during the same period to 32.66.

However, Prasarn said the markets should not overreact to the rapid depreciation of the baht or the sudden plunge in the stock market, as they are in line with global movements.

SET president Charamporn Jotikasthira also believed that despite the short-term volatility, in the long run, the global economy would benefit if the US economy could achieve a sustainable recovery.

Withdrawal of QE in the United States is one of four new risks that developing countries are facing, according to the World Bank. The others the potential effects of the radical relaxation of both fiscal and monetary policy in Japan, a faster-than-expected decline in commodity prices, and domestic challenges including inflationary pressures and asset price bubbles as well as weaker-than pre-crisis growth rates. The World Bank has cut its emerging-markets forecast from 5.5 per cent to 5.1 per cent.

Foreign investors had been net-sellers in 13 out of the last 15 trading days, with combined net-sells of Bt50.1 billion. Yesterday, their net buys were worth Bt1.4 billion, boosting month-to-date net sells to Bt32.66 billion and the year-to-date figure to Bt53.7 billion.

Asia Plus Securities said in a research note that following the sell-off, foreign investment flowing to the Thai stock market since November 2011 till now has been squeezed to Bt34.5 billion from the Bt106 billion peak. On average, foreigners bought shares when the index was at 1,455, suggesting that they should not sell when the index is below that level.

Coupled with net-buys since 2009 (after the end of the Hamburger crisis), foreign holdings in Thai shares are worth Bt180 billion. "The amount is huge, but the situation should not be so severe that all shares will be sold out. Initially, we believe that their disposal amount would not exceed the net-buys since November 2011," the brokerage house said. Its main concern is with local institutional investors. Their net-buys so far this year have exceeded Bt54 billion.

Coupled with investment in long-term equity funds (LTFs) since 2009, of which the present value is Bt53 billion, the local institutional investors sit on sellable assets worth over Bt100 billion. If these institutional investors sell off the shares, the market condition could worsen, it noted. CIMB-Principal Asset Management chief investment officer Jessada Sookdhis compared foreign investors to those addicted to stimulants. Fearing that the "stimulants" (QE) would be taken away, they kicked off panic selling. He said that Thailand has been under pressure from external factors like this before, like in 2011 when foreign investors panicked over the Greek debt crisis. After a selling spree, they returned quickly. Given the strong economic fundamentals and listed companies' earnings trend, the Thai market still shows growth potential.

"In the next one to two years, the SET Index could reach a new historic new high," Jessada said. His company advises more weighting in Thai shares, property funds and medium-term bonds in the latter half of this year on the assumption that Thailand's earnings growth would continue at 10-20 per cent per annum in the next one to two years while the US and Japan should continue maintaining QE, albeit at a reduced level.

In his testimony to the Joint Economic Committee of Congress in Washington in May, US Fed Chairman Ben Bernanke said: "A premature tightening of monetary policy could lead interest rates to rise temporarily, but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further."


-- The Nation 2013-06-14

[yoshiwara]

It will have come as an unpleasant reminder to the government and the establishment that Thailand is vulnerable to shock movements in foreign investment. Memories of the 90s. They will be hoping that this one was a one-off and normal service is resumed.

[kblaze]

It will have come as an unpleasant reminder to the government and the establishment that Thailand is vulnerable to shock movements in foreign investment. Memories of the 90s. They will be hoping that this one was a one-off and normal service is resumed.

hopefully Bernanke doesn't take Greenspan's "lord of ambiguity" approach and maintains some semblance of clarity in what he means.

next week's Fed statement should be interesting..

[BlackJack]

public brawling on the bahts strength and now weakness

no one admitting to the real debt of the rice scam and now talk of lowering the price per ton

the second had car market being wiped out due to the 100K scheme and all the punters that couldnt afford a car now returning them

the massive amount of over building going on

the 300 baht per day salary

the 2 trillion loan to fund high speed rails etc. = pie in the sky as no real value and puts Thailand in the seat for 50 years of debt repayment

political instability

tomorrows news will bring more me thinks

I got out last week and now watch the blood bath from the first row ring side seat

[yoshiwara]

public brawling on the bahts strength and now weakness

no one admitting to the real debt of the rice scam and now talk of lowering the price per ton

the second had car market being wiped out due to the 100K scheme and all the punters that couldnt afford a car now returning them

the massive amount of over building going on

the 300 baht per day salary

the 2 trillion loan to fund high speed rails etc. = pie in the sky as no real value and puts Thailand in the seat for 50 years of debt repayment

political instability

tomorrows news will bring more me thinks

I got out last week and now watch the blood bath from the first row ring side seat

IMHO what is significant here is that you have skin in the game and have taken a position as a result of your opinions.

So often talk and prediction is cheap and has no consequence for the person opining.

[ExpatJ]

Great buying opportunities now on the SET- fill your boots!

[Morakot]

Down 67 points today and counting.

It would bother me more if the market did not correct at the frothy levels that it had reached. But I am certain that it is not necessary to point this out to one with your knowledge of such matters.

You must feel very insecure about something! What makes you so certain that this basic fact cannot be uttered, especially not in a discussion forum?

Edited June 14, 2013 by Morakot

[TheGhostWithin]

I will re-post my comment, which I originally posted on the original Nation article:

The stock plunge of the SET is as temporary is the defunct financials outstripping growth within the Kingdom as a result of poor oversight and under investment in key infrastructure projects due to political wrangling which has failed to satisfy fears of major foreign investors within the Kingdom.

Countries with a more forward approach just a stones throw from Thailand ready to embrace a wide range of foreign investors and accommodate them in all their needs with minimal difficulty and red tape (Burma as a recent example, Singapore as a developed example) will continue to outperform Thailand until it realizes it must change and become more open to continue its' advancement if it is to fund its' growth through external investment.

[hawthorne]

I got our a week ago a little off the top and rolling over but only 25% sold. Long term investor just time to redirect some profits to some

other laggard markets. Who knows when or if those will kick off again ( Latin America ). Still in Japan but was in it ever since the day

the PM announced his plans to start cutting interest rates to kick-off the economy. Maybe the drop has something to do with the flood

season and the news of recent times not too mention over valued and others taking profits and looking for other more secure markets.

Sentiment ( emotions ) causes more swings in the market than anything else whether they are financially justified or not.

Personally I like Thailand and its furture for stocks. Compared to Philippines which has done astounding well and the government who is very

active in supporting the market, I still favor Thailands economic landscape. If Thailand learns from PI it would be great. Both countries

suffer from corruption but infrastruture in Thailand is many times ahead of PI and will always be until all of the islands are connected in

a way to fully utilize it's resources. Poverty in PI is much worse than Thailand BUT the education level is way ahead of Thailand and they

all speak the international trade language of English. The language skills give an advantage for its population to abtain jobs overseas

in other areas other than just labor but at professional level. I have noticed more Thais speaking english now.

[David48]

Great buying opportunities now on the SET- fill your boots!

I must admit it's scary times.

Yesterday I grabbed 5,000 more BTS. I offered for another 5,000 but my offer price wasn't matched.

I like the Stock, but I'm not in love with it.

In times like this, I'm reminded of the words of Benjamin Graham ...

Graham wrote that the owner of equity stocks should regard them first and foremost as conferring part ownership of a business. With that perspective in mind, the stock owner should not be too concerned with erratic fluctuations in stock prices, since in the short term, the stock market behaves like a voting machine, but in the long term it acts like a weighing machine (i.e. its true value will in the long run be reflected in its stock price).

... the stock owner should not be too concerned with erratic fluctuations in stock prices, since in the short term, the stock market behaves like a voting machine, but in the long term it acts like a weighing machine ...

.

[David48]

Received this in from the Broker a few hours ago ...

Where is the bottom for 1-3 month investment?

We estimate the technical support at 1341/1310/1250 points and fundamental support at 1283 points.

1. Fundamental Value:
   Fair value is 1393 points based on mean PER 10 years of 12.7x. The downside risk is that
   the index might fall to 1122 points (based on PER of 11.24x) which is the low
   point during 2011-present. For the worst case scenario (i.e. very unlikely case)
   the index may fall to the low point at 1,096 points, based on the lowest PER of
   10x seen in 2009 when the EU debt crisis emerged.

1. On a technical basis:
   The next support would be 1341 points and 1115 points, based on 75 – week SMA and
   200-week SMA, and 1310/1250 points, based on the trend line (Retracement of
   major up-channel)

[yoshiwara]

Received this in from the Broker a few hours ago ...

Where is the bottom for 1-3 month investment?

We estimate the technical support at 1341/1310/1250 points and fundamental support at 1283 points.

• Fundamental Value:

  Fair value is 1393 points based on mean PER 10 years of 12.7x. The downside risk is that

  the index might fall to 1122 points (based on PER of 11.24x) which is the low

  point during 2011-present. For the worst case scenario (i.e. very unlikely case)

  the index may fall to the low point at 1,096 points, based on the lowest PER of

  10x seen in 2009 when the EU debt crisis emerged.

• On a technical basis:

  The next support would be 1341 points and 1115 points, based on 75 – week SMA and

  200-week SMA, and 1310/1250 points, based on the trend line (Retracement of

  major up-channel)

Sounds like he is just copying a chart daily newsletter on indices which is only of limited use.

[Payboy]

Down 67 points today and counting.

It would bother me more if the market did not correct at the frothy levels that it had reached. But I am certain that it is not necessary to point this out to one with your knowledge of such matters.

You must feel very insecure about something! What makes you so certain that this basic fact cannot be uttered, especially not in a discussion forum?

It must be all those investments he's made and the financial knowledge that he's bursting with.

[yoshiwara]

I am more of a fan of individual stocks

I will re-post my comment, which I originally posted on the original Nation article:

The stock plunge of the SET is as temporary is the defunct financials outstripping growth within the Kingdom as a result of poor oversight and under investment in key infrastructure projects due to political wrangling which has failed to satisfy fears of major foreign investors within the Kingdom.

Countries with a more forward approach just a stones throw from Thailand ready to embrace a wide range of foreign investors and accommodate them in all their needs with minimal difficulty and red tape (Burma as a recent example, Singapore as a developed example) will continue to outperform Thailand until it realizes it must change and become more open to continue its' advancement if it is to fund its' growth through external investment.

Prior to the recent drop, that perspective would have missed out on a very good run on the SET, so I don't necessarily buy it.

However, sentiment does seem to have shifted and even with the significant adjustment a brave man entering the market on current prices.

[Tmymaimee]

Received this in from the Broker a few hours ago ...

Where is the bottom for 1-3 month investment?

We estimate the technical support at 1341/1310/1250 points and fundamental support at 1283 points.

1. Fundamental Value:

   Fair value is 1393 points based on mean PER 10 years of 12.7x. The downside risk is that

   the index might fall to 1122 points (based on PER of 11.24x) which is the low

   point during 2011-present. For the worst case scenario (i.e. very unlikely case)

   the index may fall to the low point at 1,096 points, based on the lowest PER of

   10x seen in 2009 when the EU debt crisis emerged.

1. On a technical basis:

   The next support would be 1341 points and 1115 points, based on 75 – week SMA and

   200-week SMA, and 1310/1250 points, based on the trend line (Retracement of

   major up-channel)

If the broker was successful, why would he need to be working for someone else? He could just trade on his own and be wealthy.

Investing in Thai companies that have a proven inability to compete in international markets or fail to even look for growth outside of Thai boundaries is not where I will invest my capital.

[kblaze]

Received this in from the Broker a few hours ago ...

Where is the bottom for 1-3 month investment?

We estimate the technical support at 1341/1310/1250 points and fundamental support at 1283 points.

1. Fundamental Value:

   Fair value is 1393 points based on mean PER 10 years of 12.7x. The downside risk is that

   the index might fall to 1122 points (based on PER of 11.24x) which is the low

   point during 2011-present. For the worst case scenario (i.e. very unlikely case)

   the index may fall to the low point at 1,096 points, based on the lowest PER of

   10x seen in 2009 when the EU debt crisis emerged.

1. On a technical basis:

   The next support would be 1341 points and 1115 points, based on 75 – week SMA and

   200-week SMA, and 1310/1250 points, based on the trend line (Retracement of

   major up-channel)

If the broker was successful, why would he need to be working for someone else? He could just trade on his own and be wealthy.

Investing in Thai companies that have a proven inability to compete in international markets or fail to even look for growth outside of Thai boundaries is not where I will invest my capital.

it takes a pretty large stack of cash to be able to "live off" the gains you make trading/investing. a lot of people do it of course, but there are a lot who have the skills but haven't amassed the cash pile needed to live on their own and supply their own medical, insurance, retirement, etc. thus they work for a brokerage.

[yoshiwara]

it takes a pretty large stack of cash to be able to "live off" the gains you make trading/investing. a lot of people do it of course, but there are a lot who have the skills but haven't amassed the cash pile needed to live on their own and supply their own medical, insurance, retirement, etc. thus they work for a brokerage.

including those who go by the name of 'big swinging dicks'. Edited June 17, 2013 by yoshiwara