Thai shares plunge 12% in 2015

[snoop1130]

Thai shares plunge 12% in 2015
The Nation

THAILAND -- The Stock Exchange of Thailand Index ended today 4.24 points or 0.33 per cent higher to 1,288.02 points on very thin turnover ofBt27.97 billion.

Yet, the Index showed a sharp plunge from last year’s closing at 1497.67 points. In the previous 12 months, the Thai stock market lost 12 per cent.

This year, foreign investors also sold Thai shares for a net value of Bt154.35 billion. In December alone, the net-sells totalled Bt32.5 billion.

Source: http://www.nationmultimedia.com/breakingnews/Thai-shares-plunge-12-in-2015-30275924.html

-- The Nation 2015-30-12

[BigBadGeordie]

Last para tells it all, bloody farangs

[SantiSuk]

Not particularly worse than Asian stocks and emerging market stocks in general over 2015. South America and Eastern Europe have been particularly bloody

I'll be starting to put some money back into this sector in the new year, for long term investment not short term gain - could go down some more before bouncing back and I would never bet my shirt on Thailand, Asia and emerging markets. High risk, high reward - decent enough home for 10-15% (in total for all those 3) of a global equity portfolio though.

[craigt3365]

A coup and a global economic slowdown doesn't help stock markets! LOL

[Mr Creosote]

To see how markets performed globally, this graphic is quite revealing. Looks like Argentina was the big winner in 2015

http://money.cnn.com/interactive/investing/best-performing-global-markets/

[Time Traveller]

To see how markets performed globally, this graphic is quite revealing. Looks like Argentina was the big winner in 2015

http://money.cnn.com/interactive/investing/best-performing-global-markets/

Lol...yeah it was a real big winner (hehehe) ..umh, ahem,..... you do realise that the Argentine Peso lost 55% against the USD this year, don't you?

[Naam]

To see how markets performed globally, this graphic is quite revealing. Looks like Argentina was the big winner in 2015

http://money.cnn.com/interactive/investing/best-performing-global-markets/

Lol...yeah it was a real big winner (hehehe) ..umh, ahem,..... you do realise that the Argentine Peso lost 55% against the USD this year, don't you?

Merval index up 34.5%, currency loss ARS/USD 56.5% = loss 22%

don't cry for me Argentina...

[Srikcir]

A 24% decline in two years mostly attributable to fleeing foreign investors. This does not help Thailand's economic recovery for 2016.

The good news is that investment in Vietnam and The Philippines is looking very attractive.

[Baerboxer]

To see how markets performed globally, this graphic is quite revealing. Looks like Argentina was the big winner in 2015

http://money.cnn.com/interactive/investing/best-performing-global-markets/

Lol...yeah it was a real big winner (hehehe) ..umh, ahem,..... you do realise that the Argentine Peso lost 55% against the USD this year, don't you?

Merval index up 34.5%, currency loss ARS/USD 56.5% = loss 22%

don't cry for me Argentina...

Yep. And the outgoing President said she left office without leaving Argentina in debt - she simply refused to pay and honor all their international debts and ignore the US courts.

Pity the incoming guy who must try and clean all that crap up.

[hugh2121]

To see how markets performed globally, this graphic is quite revealing. Looks like Argentina was the big winner in 2015

http://money.cnn.com/interactive/investing/best-performing-global-markets/

Lol...yeah it was a real big winner (hehehe) ..umh, ahem,..... you do realise that the Argentine Peso lost 55% against the USD this year, don't you?

Merval index up 34.5%, currency loss ARS/USD 56.5% = loss 22%

don't cry for me Argentina...

Yep. And the outgoing President said she left office without leaving Argentina in debt - she simply refused to pay and honor all their international debts and ignore the US courts.

Pity the incoming guy who must try and clean all that crap up.

US courts??? Argentina???

[bobmac10]

Don't panic, the military are in charge

[Naam]

A 24% decline in two years mostly attributable to fleeing foreign investors. This does not help Thailand's economic recovery for 2016.

The good news is that investment in Vietnam and The Philippines is looking very attractive.

foreigners buying or selling Thai stocks have no impact whatsoever on the local economy.

[Naam]

US courts??? Argentina???

not only US courts but dozens of other courts in half a dozen countries have ruled that Argentina must pay billions to various plaintiff creditors (origin default in 2001).

Edited December 31, 2015 by Naam

[hugh2121]

US courts??? Argentina???

not only US courts but dozens of other courts in half a dozen countries have ruled that Argentina must pay billions to various plaintiff creditors (origin default in 2001).

I think they've wasted their time and money.

Keeping the lawyers happy.

[Naam]

US courts??? Argentina???

not only US courts but dozens of other courts in half a dozen countries have ruled that Argentina must pay billions to various plaintiff creditors (origin default in 2001).

I think they've wasted their time and money.

Keeping the lawyers happy.

that depends on the perspective. since years Argentina has not been able to issue new debt and payment of interest on some of the issued bonds is blocked.

[Time Traveller]

A 24% decline in two years mostly attributable to fleeing foreign investors. This does not help Thailand's economic recovery for 2016.

The good news is that investment in Vietnam and The Philippines is looking very attractive.

foreigners buying or selling Thai stocks have no impact whatsoever on the local economy.

In the midst of your vast klingon wisdom, Naam, you occasionally come up with ridiculous statements.

If the flows are large enough, foreign investment or divestment in a country does indeed impact the local economy. Maybe you weren't here in the 1990's.

Even today about 25% of the thai stock market is owned by foreigners.

If a portion of those foreign investors did sell then yes there's going to be an impact on the economy.

Edited January 2, 2016 by Time Traveller

[AyG]

A 24% decline in two years mostly attributable to fleeing foreign investors. This does not help Thailand's economic recovery for 2016.

The good news is that investment in Vietnam and The Philippines is looking very attractive.

foreigners buying or selling Thai stocks have no impact whatsoever on the local economy.

In the midst of your vast klingon wisdom, Naam, you occasionally come up with ridiculous statements.

If the flows are large enough, foreign investment or divestment in a country does indeed impact the local economy. Maybe you weren't here in the 1990's.

Even today about 25% of the thai stock market is owned by foreigners.

If a portion of those foreign investors did sell then yes there's going to be an impact on the economy.

Uh, Naam is substantially correct. When a foreigner sells a Thai share it's bought by someone else. There's no impact upon the company itself or the company's ability to be profitable. (Excessive share sales might lower share price and make it harder for the company to raise equity capital in the future, but that's a minor, indirect effect.)

Foreign investment, meaning foreign companies providing direct capital for investment in Thai businesses or setting up new businesses here, is a different matter. Foreign investment is a driver for company and economic growth.

You appear to be confusing the two types of investment.

[Mr Creosote]

A 24% decline in two years mostly attributable to fleeing foreign investors. This does not help Thailand's economic recovery for 2016.

The good news is that investment in Vietnam and The Philippines is looking very attractive.

foreigners buying or selling Thai stocks have no impact whatsoever on the local economy.

I think what is meant is foreign "institutional" investors, not individual investors. Large funds for example.

[Time Traveller]

A 24% decline in two years mostly attributable to fleeing foreign investors. This does not help Thailand's economic recovery for 2016.

The good news is that investment in Vietnam and The Philippines is looking very attractive.

foreigners buying or selling Thai stocks have no impact whatsoever on the local economy.

In the midst of your vast klingon wisdom, Naam, you occasionally come up with ridiculous statements.

If the flows are large enough, foreign investment or divestment in a country does indeed impact the local economy. Maybe you weren't here in the 1990's.

Even today about 25% of the thai stock market is owned by foreigners.

If a portion of those foreign investors did sell then yes there's going to be an impact on the economy.

Uh, Naam is substantially correct. When a foreigner sells a Thai share it's bought by someone else. There's no impact upon the company itself or the company's ability to be profitable. (Excessive share sales might lower share price and make it harder for the company to raise equity capital in the future, but that's a minor, indirect effect.)

Foreign investment, meaning foreign companies providing direct capital for investment in Thai businesses or setting up new businesses here, is a different matter. Foreign investment is a driver for company and economic growth.

You appear to be confusing the two types of investment.

Naam is not correct. Neither are you because, foreign portfolio investment is not greatly different from foreign direct investment. Either a thai asset is owned by foreign capital or it is owned by thai capital.

If foreign capital is used then thai capital (which would have otherwise owned the asset) can be used for other investement or even consumption (return of capital to owners). Positive for the thai economy.

When foreign investment (including sale of shares) is net withdrawn - ie. the foreigner sells the shares to a thai - then that thai buyer of the shares can no longer use their funds for other forms of investment or for consumption. Negative for the thai economy. Starting to get the picture?

It's not simply the share prices are lower (which may also have an affect), it's a fact that there is a smaller pool of funding floating around the economy once thai or foreign asset owners sell and remit abroad.

Again, this is story of Thailand in the 1980's / 90's.

[AyG]

Naam is not correct. Neither are you because, foreign portfolio investment is not greatly different from foreign direct investment. Either a thai asset is owned by foreign capital or it is owned by thai capital.

If foreign capital is used then thai capital (which would have otherwise owned the asset) can be used for other investement or even consumption (return of capital to owners). Positive for the thai economy.

When foreign investment (including sale of shares) is net withdrawn - ie. the foreigner sells the shares to a thai - then that thai buyer of the shares can no longer use their funds for other forms of investment or for consumption. Negative for the thai economy. Starting to get the picture?

From the point of view of a company, the only injection of equity capital is when shares are issued. What happens subsequently to those shares is largely irrelevant.

Local investors (and for that matter foreign ones) typically aren't deciding between buying shares or investing directly in companies. These are quite different markets. For example, a fund manager typically is going to buy/sell shares which have already been issued which has little effect upon the companies concerned. This is not putting any new capital into companies so is not helping to grow the economy.

New foreign capital comes into the country from the likes of Honda, Telenor, Western Digital setting up (and growing) businesses here - not via the equity markets.

So sorry, your analysis is wrong and Naam is correct.

[Time Traveller]

Naam is not correct. Neither are you because, foreign portfolio investment is not greatly different from foreign direct investment. Either a thai asset is owned by foreign capital or it is owned by thai capital.

If foreign capital is used then thai capital (which would have otherwise owned the asset) can be used for other investement or even consumption (return of capital to owners). Positive for the thai economy.

When foreign investment (including sale of shares) is net withdrawn - ie. the foreigner sells the shares to a thai - then that thai buyer of the shares can no longer use their funds for other forms of investment or for consumption. Negative for the thai economy. Starting to get the picture?

From the point of view of a company, the only injection of equity capital is when shares are issued. What happens subsequently to those shares is largely irrelevant.

Local investors (and for that matter foreign ones) typically aren't deciding between buying shares or investing directly in companies. These are quite different markets. For example, a fund manager typically is going to buy/sell shares which have already been issued which has little effect upon the companies concerned. This is not putting any new capital into companies so is not helping to grow the economy.

New foreign capital comes into the country from the likes of Honda, Telenor, Western Digital setting up (and growing) businesses here - not via the equity markets.

So sorry, your analysis is wrong and Naam is correct.

Go back and reread the post. It was about the effect on the economy, not about effect on the company whose shares were sold.... I realize companies don't give a sheep about the buying and selling their shares because it has very limited affect on their business. Buying existing shares does not put capital into that business. It puts capital into the market/economy.

A thai with money can either

1. spend it. - (good for the economy), OR

2. save it - (good for the economy as the bank can then lend it out). OR,

3. invest in new business venture - (good for the economy). OR,

4 invest in assets such as securities like stocks or bonds - generally neutral for the economy, unless the proceeds for the investment get sent abroad and therefore reducing the domestic pool of funding.

In the case of number 4, if the thai investor buys the shares. Then that thai (giving their investment money to the seller) can no longer use their money for new investment or consumption. When the funds are sent abroad the money disappears from the domestic market. (in reality it doesn't the country just exchanges FX for baht, but the real effect is the currency has less purchasing power so in effectively wealth disappears)

Saying that foriegn portfolio flows have not impact on the economy is just ridiculous. But you go ahead and beleive what you want.