Investing in the Thai Stock market

[sharecropper]

I do a lot of investing in the UK and on NASDAQ mostly, but I would never EVER invest in Thai stocks because of the lack of transparency, the fact that they're, well, Thai-run companies, complying with ropey Thai standards of corporate governance and because of the lack of proper regulation and sanctions for insider dealing and corporate malfeasance (as seen recently).

 

The lack of a level playing field can skewer the price of stocks, leaving connected persons laughing and private investors broke.

 

So, given the above,  I wonder if anyone can tell me why they invest in shares listed on SET and if I'm missing something. (Assuming you haven't got an 'inside track' of course - in which case I can well-understand it!)

[taiping]

Over many years I have never had a problem with Thai listed companies. On average, I get an overall rate of dividend return of 5% (including the 10% dividend tax). And the banks pay what for deposits? Still, in my opinion the Thai stock market, like others world-wide, is high, so I would be cautious about investing at this time.

[elgordo38]

7 hours ago, sharecropper said:

The lack of a level playing field can skewer the price of stocks, leaving connected persons laughing and private investors broke.

You can pretty well put this template on any stock market in the world. Today when Yellen speaks the world will shake and quiver needlessly. Brunhilda is out of bullets she only has bluster left for her blunderbus. 

[spambot]

Transparency either in Thailand or UK / Europe / US can be subjective - Banks generally fall into the same trap with their lack of transparency (Banks generally are based on black box trading), but key for me in Thai share market is the lack of shareholder pressure - listed companies in Thailand behave as though they are sole owners and shareholders get no real power to change a company destination through their share ownership since Thailand has a very high percentage of retail investors the larger institutional investors and hedge fund lack of activity is not really effective for keeping companies on their toes.

 

Having said that there is diminishing benefit insider trading is going to  give anyone if Kuroda / BOJ does eventually manage to fix its yield curve or Yellen / FED does speed up normalization or even possibly (but less influential) BOT pull back from its currency swaps program. So understanding the Macro economics might possibly become more incisive for  profit taking than any of the current insider leverages.

 

[1FinickyOne]

Wow - that sounds terrible - thankfully none of that happens in US markets where I am invested... most casinos are more honest... 

[spambot]

If Kuroda / BOJ moves  hard-line to  fix its yield curve or Yellen / FED  normalizes  and raises rates (could potentially happen today) - It will very much effect US markets . However the effect on emerging markets (Thai) shares will probably be deeper than the effect on the US .

[vivasamui]

Gee, the major  Thai banks are probably in better shape than Barclays, HSBC, or Standard Chartered.

There's a stock exchange website, annual reports  and webcasts in English, and regular Investor Days where you can meet with management.

You are right to stay away. The fewer the people  researching  Thai companies, the better

[khunPer]

I've been doing Mutual Funds, the so-called "Fund Book", for a number of years in three Thai banks; that have worked fine for both me, my Thai girlfriend and our daughter. I also recently opened at SET-online trade-account with SCB, works very well with good transparent information, just like any other stock-market – to be honest, I fell the SCB-online platform is better than my Nordic bank's online-trading-platform; not to forget that with SCB I have a personal, perfect English-speaking adviser that I can call or Email at any time – and I get paid lots of dividend straight into my SCB account.

[pkspeaker]

been in thai stocks for years and bought into the set mostly at 600, and then again at appox 400 after the financial crises, so I have done very well with it.. it pretty much moves along with other regional markets, much prefer the set over say real estate; i get good dividends and I don't have to deal with tenents or get the toilet fixed.

[vukovar77]

I trade Thai stocks daily with Bauluang Securities and I am doing pretty good until now ,but it is pretty different than trading in EU.Trading platform is very good and I enjoy trading with stocks and Warrants on SET!!!I am new here,trading about 3 months only on SET,but have a lot experience about trading in EU stock markets(15 years)!You need to have a lot of practice to be good trader here!

[raymundo99]

i agree with most of what sharecropper says about SET but after investing many years on SET i have  found the TOP INFRASTRUCTURE AND PROPERTY FUND SHARES (REITS) ARE VERY GOOD.research my top 4 shares,DIF,JASIF,BTSGIF AND MJLF.

i have been receiving over 6% return p.a.you get dividends every qtr and the shares generally go up

[kyb789]

I am just an average investor. Nothing near a "pro". I have invested in the Thailand stock market mutual funds for more than 10 years, as well as the U.S. funds. If you are like me, it doesn't make any difference. The world market goes up and down at the same time. Sometimes the U.S. does better than Thailand, sometimes Thailand does better. I diversify.

 

It's up to you, but someone told me that if you live in Thailand, you should invest your money here, because you will not have to suffer currency fluctuations. Up to you..

 

[fletchsmile]

I rarely invest in individual shares on SET, for a few reasons, including some of those mentioned by OP.

 

I strongly believe in investing in Thai equities though and have some Thai equity exposure thru mutual funds/unit trusts though for many reasons:. Here's a few off the top of my head

 

- THB assets and THB income streams to offset currency risk. I wouldn't like all my money in USD, GBP, EUR and be at the whim of exchange rates

- Tax relief on LTFs and RMFS of up to 35%

- Convenience and buying in Thailand for money created in Thailand

- Parking assets in my wife and kids name to avoid inheritance tax

- Often no capital gains tax and dividend witholding tax much lower than places like the US. Much simpler tax system too foreigners than US or UK

- Long term growth potential of Thailand equity market. Developed markets offer less growth

- Nice historical returns - annualised returns on some funds of around 17% per annum for last 15 years+. Don't necessarily expect that going forward in todays lowyield world, but still think 7%+ p.a. is reasonable

- Diversification

- Living here makes sense to link some of my financial wealth to the country. Wouldn't like Thailand to be booming as a success story, people getting wealthier here and me not participating or getting poorer as my money was linked to other countries/ dveleoped countries only. Not too word if Thailand tanks I suffer and everyone else suffers here as we're all in the same boat. Don't want to miss the boat though

- as an asset class equities should generate above inflation returns over longer period. If I was living in UK I'd have UK equities, US then US equities. So with Thailand as home there's some logic behind that

- Choice of investments, platfrms, opportunities continues to grow here

 

Cheers

Fletch

 

[sharecropper]

8 hours ago, fletchsmile said:

I rarely invest in individual shares on SET, for a few reasons, including some of those mentioned by OP.

 

I strongly believe in investing in Thai equities though and have some Thai equity exposure thru mutual funds/unit trusts though for many reasons:. Here's a few off the top of my head

 

- THB assets and THB income streams to offset currency risk. I wouldn't like all my money in USD, GBP, EUR and be at the whim of exchange rates

- Tax relief on LTFs and RMFS of up to 35%

- Convenience and buying in Thailand for money created in Thailand

- Parking assets in my wife and kids name to avoid inheritance tax

- Often no capital gains tax and dividend witholding tax much lower than places like the US. Much simpler tax system too foreigners than US or UK

- Long term growth potential of Thailand equity market. Developed markets offer less growth

- Nice historical returns - annualised returns on some funds of around 17% per annum for last 15 years+. Don't necessarily expect that going forward in todays lowyield world, but still think 7%+ p.a. is reasonable

- Diversification

- Living here makes sense to link some of my financial wealth to the country. Wouldn't like Thailand to be booming as a success story, people getting wealthier here and me not participating or getting poorer as my money was linked to other countries/ dveleoped countries only. Not too word if Thailand tanks I suffer and everyone else suffers here as we're all in the same boat. Don't want to miss the boat though

- as an asset class equities should generate above inflation returns over longer period. If I was living in UK I'd have UK equities, US then US equities. So with Thailand as home there's some logic behind that

- Choice of investments, platfrms, opportunities continues to grow here

 

Cheers

Fletch

 

 

Excellent post. Thanks.

[fletchsmile]

On the subject of "inside track"

 

That's another of the key reasons I prefer funds to individual shares, and why I prefer active fund management. I'm aware that I won't be as close to the market as some will be, and the market here is far from perfect.

 

Hence putting money with active fund managers who are closer to the market and see thru a lot of transparencies for you can be useful. 

 

 

[Oxx]

40 minutes ago, fletchsmile said:

On the subject of "inside track"

 

That's another of the key reasons I prefer funds to individual shares, and why I prefer active fund management.

 

Whilst I prefer investment trusts to funds, I also prefer active management for the Thai market.  For me it was significant that the trust I invest in has managed completely to avoid the shares of those companies which have recently been involved in insider trading scandals.  They also appear not to have invested in (rather fishy smelling) JAS/JASIF.

 

Certainly, ETFs and index trackers, are really not a good idea for a market as dubious as the SET.

 

 

[raymundo99]

to mr SHARECROPPER.would you please be more specific and NAME the mutual; funds/unit trusts-the ones you strongly believe in.

 

to mr OXX: JAS is fishy.mr Pete screwed up the auction with NBTC.mr pete IS trying to buy all of JAS.

re JASIF; can you name a better dividend share?

[Oxx]

43 minutes ago, raymundo99 said:

to mr OXX: JAS is fishy.mr Pete screwed up the auction with NBTC.mr pete IS trying to buy all of JAS.

re JASIF; can you name a better dividend share?

 

Try rereading what I wrote.  I prefer to have experts decide which companies to buy and sell.  That's worked very well for me for a number of years.

 

I was only pointing out that the experts are in a far better position to make good decisions than the typical retail investor.

 

Incidentally, I don't believe he is trying to buy all of JAS - just enough so that he has full control.  Then, should he so wish, he can screw the minority investors.

[sharecropper]

14 hours ago, raymundo99 said:

to mr SHARECROPPER.would you please be more specific and NAME the mutual; funds/unit trusts-the ones you strongly believe in.

 

I can't, because in my OP I said I wouldn't touch the SET with a barge pole, not that I strongly believe in anything listed. I was inviting the more considered opinions of others who do invest.

[SheungWan]

On 24/09/2016 at 1:19 AM, sharecropper said:

 

I can't, because in my OP I said I wouldn't touch the SET with a barge pole, not that I strongly believe in anything listed. I was inviting the more considered opinions of others who do invest.

 

Do you trade on any of the bourses?

[sharecropper]

1 hour ago, SheungWan said:

 

Do you trade on any of the bourses?

 

US, Canada and UK mostly.

[SheungWan]

6 hours ago, SheungWan said:

 

Do you trade on any of the bourses?

 

5 hours ago, sharecropper said:

 

US, Canada and UK mostly.

 

Well I guess the SET is an optional extra for you then. The one person I know who is active on the SET doesn't have access to other markets so he doesn't have a choice. I think as far as being active in the Far East is concerned the Hang Seng is more interesting than the SET but not everybody has access to that one either. I am informed that SET dealing costs are low and that taxes can be reclaimed. So, yes the SET may be opaque, but dealing is straightforward and if playing is interesting to the participant, why not? There are worse ways to spend the day (assuming one has the financial wherewithal).

[Asiantravel]

With Saudi devaluation bets soaring, Chinese money-market rates popping, 2 debates and an election looming, and the most systemically dangerous bank in the world flashes the reddest of red warning signs, HSBC's Murray Gunn's conclusion bears paying attention to. Between wave-trending signals and disturbing technical trading patterns, Gunn warns of "ominous shades of 1987" for the markets.

The Dow Jones Industrials index has turned lower from a Head & Shoulders neckline re-test. A similar pattern occurred at this, often bearish, time of the year in 1987 before the index fell dramatically.