Investor confidence remains high

[webfact]

Investor confidence remains high

 

 

BANGKOK, 16 May 2017, (NNT) - According to the Federation of Thai Capital Market Organization (FETCO), local investors are confident that the Thai economy will improve despite the current volatility while pointing out that foreign investments in Thai stocks remain stable. 

FETCO quoted its survey on the Investor Confidence Index over the next three months which stands at 100.89, an increase of 11.69 percent from the June projection of 90.33. The organization attributed the positive speculation to the improving local economic situation and the performances of several listed companies, adding that one major negative factor is the volatility in the international capital flows. 

The President of the Stock Exchange of Thailand (SET), Kesara Manchusree, said foreign investors in April bought 1.82 billion baht worth of Thai stocks. 

The combined net value of the SET and the Market for Alternative Investment now stands at 15.8 trillion baht, an increase of 1.87 percent from 2016. The average value of daily trades is 40 billion baht, representing a drop of 8.18 percent year-on-year.

 

-- nnt 2017-05-16

[Dunky]

Utter horse excrement!! The economy is totally in the toilet and these incompetents have nearly exhausted the reserves!

[williamgeorgeallen]

1 hour ago, Dunky said:

Utter horse excrement!! The economy is totally in the toilet and these incompetents have nearly exhausted the reserves!

yes but of course they are not allowed to report that.

[simoh1490]

1 hour ago, Dunky said:

Utter horse excrement!! The economy is totally in the toilet and these incompetents have nearly exhausted the reserves!

What reserves are those then, c'mon, do share.

[wealthychef]

I do agree, this is a good time to invest in Thailand, with a big short position. 

[simoh1490]

1 minute ago, wealthychef said:

I do agree, this is a good time to invest in Thailand, with a big short position. 

Which is why you probably never become truly wealthy.

[wealthychef]

5 minutes ago, simoh1490 said:

Which is why you probably never become truly wealthy.

 

LOL, you assume because I live in Thailand that I'm poor, basically proving my point, and you are wrong.  Are you saying this is a time of growth for the Thai economy and that investing in it is a good idea?  

 

[simoh1490]

1 minute ago, wealthychef said:

 

LOL, you assume because I live in Thailand that I'm poor, basically proving my point, and you are wrong.  Are you saying this is a time of growth for the Thai economy and that investing in it is a good idea?  

 

I don't assume anything from your post, I merely responded to what you wrote.

 

A good idea?

 

If you live here you need Thai assets rather than foreign currency assets, in that respect you have to invest in some shape or form otherwise you may not be able to stay here over the longer term beyond the short horizon of any contract you may (or may not) have currently. If of course Thailand and your current visit here is only short term, other options exist in your home country, as long as you can still access them that is.

 

For my part I've lived here a long time and I've made money through investing in the simple things, fixed deposits, the SET, property i have LIVED in, cars I have driven, everyday sort of stuff, do I think investing in Thailand is a good idea, absolutely I do! As if it were needed, the evidence is that the TVF herd is demanding you don't invest but they've always been that way and they're all still mostly impoverished.

 

 

 

[wealthychef]

22 minutes ago, simoh1490 said:

I don't assume anything from your post, I merely responded to what you wrote.

 

A good idea?

 

If you live here you need Thai assets rather than foreign currency assets, in that respect you have to invest in some shape or form otherwise you may not be able to stay here over the longer term beyond the short horizon of any contract you may (or may not) have currently. If of course Thailand and your current visit here is only short term, other options exist in your home country, as long as you can still access them that is.

 

For my part I've lived here a long time and I've made money through investing in the simple things, fixed deposits, the SET, property i have LIVED in, cars I have driven, everyday sort of stuff, do I think investing in Thailand is a good idea, absolutely I do! As if it were needed, the evidence is that the TVF herd is demanding you don't invest but they've always been that way and they're all still mostly impoverished.

 

 

 

I believe you assumed that I am not wealthy when you said "you probably never become truly wealthy."  Am I wrong?  

I disagree that you need Thai assets to live here a long time.  If you have enough money you can simply stay here forever.  And you less likely to ever have enough such money the more you invest in Thailand.  Why?  Because Thailand's economy is a wreck right now and getting worse.  Perhaps it will improve later, but right now the prospects are not good.  

Obviously this is all my opinion and I hope for Thailand's sake they do better in the future.  

You have made money by investing in the SET?  The five year return on the SET has been 0%.  I was unable to go back more than 5 years.  The fact that you consider a car and fixed deposits to be good investments tells me a lot about your mentality towards investing.  Hint:  investments are supposed to increase in value over time.  Cars do not.  

[simoh1490]

1 hour ago, wealthychef said:

I believe you assumed that I am not wealthy when you said "you probably never become truly wealthy."  Am I wrong?  

I disagree that you need Thai assets to live here a long time.  If you have enough money you can simply stay here forever.  And you less likely to ever have enough such money the more you invest in Thailand.  Why?  Because Thailand's economy is a wreck right now and getting worse.  Perhaps it will improve later, but right now the prospects are not good.  

Obviously this is all my opinion and I hope for Thailand's sake they do better in the future.  

You have made money by investing in the SET?  The five year return on the SET has been 0%.  I was unable to go back more than 5 years.  The fact that you consider a car and fixed deposits to be good investments tells me a lot about your mentality towards investing.  Hint:  investments are supposed to increase in value over time.  Cars do not.  

I had omitted the word "will" (become), my error.

 

When I first started spending money here the SET was at 350.

 

And when I first moved here the Pound was worth 83 baht, it was with that money that I bought my first vehicle and condo. As the exchange rate began to favour the Baht my next car and house cost me nothing, plus the capital value increased by about 18% on my first property purchase over five years. Meanwhile, those foreigners who lived here but didn't have assets here suffered an increasing degradation of their exchange rates, the vast majority to the point that they couldn't afford to live here and that trend continues until today. Did I mention the SET was at 350! I still hold bonds bearing over 5% and my income is tax free because so little of my income arises here.

 

So yes, you do need assets here and increasingly you need an income stream that is generated here, unless of course your current mission is only short term.

 

Edited May 16, 2017 by simoh1490

[wealthychef]

Hmm, so you are making two points.  First, you seem to be banking on the Thai baht getting stronger over time as happened to you.  Maybe you got lucky in the sense that you came in when the baht was very weak and it strengthened, so this offset your automobile expenditure.  It is weak now and perhaps will strengthen again.  This is nothing more than currency speculation, which strikes me as a pure gamble when talking about a 10 year horizon.  

Second, you are saying that the SET went from 350 to its current 1450 in how many years?  Sorry but I don't know when you first moved to Thailand, nor do I know historically when the SET was at 350.  Are we talking about the SET 100 by the way?  How does that performance compare to the S&P 500 in USA?  As an American investor I have many choices.  Maybe someone from the UK has fewer options;  I don't know.  I know American stocks are overvalued right now and a correction is expected.  However it is also conventional wisdom that Thailand's economy is in the crapper at the moment and not getting better.  

I'm sure this all depends on many factors, but from where I'm sitting, Thailand still looks like a weak gamble.    

Am I capturing your arguments fairly?  

[elgordo38]

8 hours ago, webfact said:

The combined net value of the SET and the Market for Alternative Investment now stands at 15.8 trillion baht, an increase of 1.87 percent from 2016. The average value of daily trades is 40 billion baht, representing a drop of 8.18 percent year-on-year.

Do I read this as saying foreigners are buying more stocks and Thai's less??

[elgordo38]

3 minutes ago, wealthychef said:

Hmm, so you are making two points.  First, you seem to be banking on the Thai baht getting stronger over time as happened to you.  Maybe you got lucky in the sense that you came in when the baht was very weak and it strengthened, so this offset your automobile expenditure.  It is weak now and perhaps will strengthen again.  This is nothing more than currency speculation, which strikes me as a pure gamble when talking about a 10 year horizon.  

Second, you are saying that the SET went from 350 to its current 1450 in how many years?  Sorry but I don't know when you first moved to Thailand, nor do I know historically when the SET was at 350.  Are we talking about the SET 100 by the way?  How does that performance compare to the S&P 500 in USA?  As an American investor I have many choices.  Maybe someone from the UK has fewer options;  I don't know.  I know American stocks are overvalued right now and a correction is expected.  However it is also conventional wisdom that Thailand's economy is in the crapper at the moment and not getting better.  

I'm sure this all depends on many factors, but from where I'm sitting, Thailand still looks like a weak gamble.    

Am I capturing your arguments fairly?  

Keep us in the loop this sounds interesting. 

[simoh1490]

9 hours ago, wealthychef said:

Hmm, so you are making two points.  First, you seem to be banking on the Thai baht getting stronger over time as happened to you.  Maybe you got lucky in the sense that you came in when the baht was very weak and it strengthened, so this offset your automobile expenditure.  It is weak now and perhaps will strengthen again.  This is nothing more than currency speculation, which strikes me as a pure gamble when talking about a 10 year horizon.  

Second, you are saying that the SET went from 350 to its current 1450 in how many years?  Sorry but I don't know when you first moved to Thailand, nor do I know historically when the SET was at 350.  Are we talking about the SET 100 by the way?  How does that performance compare to the S&P 500 in USA?  As an American investor I have many choices.  Maybe someone from the UK has fewer options;  I don't know.  I know American stocks are overvalued right now and a correction is expected.  However it is also conventional wisdom that Thailand's economy is in the crapper at the moment and not getting better.  

I'm sure this all depends on many factors, but from where I'm sitting, Thailand still looks like a weak gamble.    

Am I capturing your arguments fairly?  

A lot depends on your age, how long you intend to remain here and the currencies you are earning in and holding. If you're an expat on a one/two/three year contract fine, enjoy your "holiday". But if you're planning to try and "settle" things are different, in that case you'll need in country funds and preferably an income stream in Baht. If you don't have those things you leave yourself open to the vagaries of the forex market. I started coming here before the 1997 crash and brought funds here shortly after wards. USD/THB went from 25 to over 50 and then settled around low 40's for some time and it's been broadly strengthening eve since - GBP was similar, it went to over 90 in 1997 and a combination of GBP weakening and THB strengthening has seen it reach 42 at one point, today it's circa 44.

 

If Thailand is going to be "home" then it helps to have reserves in country, even better is to have an income stream in THB otherwise you'll have sleepless nights - I now have eight years money in country and I invest this in CD's, the SET and governement bonds. I also have income streams from the UK and the US in the form of pensions but that money doesn't get to see Thailand and may never actually do so, my Thai holdings make me self sufficient in that respect. We also own our house plus a fair amount of land and whilst I don't regard that as an investment, sale of those things will realise a profit.

 

I would guess that over 75% of the Thaivisa regulars who used to scream everyday how unsafe Thailand is, are now back in their respective home countries having been priced out - the governement is corrupt, the banks are unsafe, the baht is going to crash, you name it, any excuse was given not to invest here. If you scratch the media surface just a little you'll see that Thailand's economy is fundamentally quite strong and has been so for many years: governement borrowings are low, there's a ready and available workforce, unemployment is low, foreign currency reserves are extremely high and the country is not burdened by expensive social care programs or unions - the noise about the junta and coups is exactly that to a large degree, sure they cause blips on the economic landscape but that's all they are, just blips, the economic fundamentals don't change. I've been suggesting we'll see a sub 40 Pound for many years and was ridiculed for a while, we're almost there! Market watchers and investors that I respect and follow believe we'll see USD/THB at 25 again at some point in the future and I agree. So any investment a person makes in Thailand in say the SET or bonds, is likely to make money on the product and on the currency.

 

Yes I could invest in the S&P but I don't although I am invested in the FTSE using funds that are earned in Pounds.

 

Finally, there's a tax advantage for me by investing here since the UK governement regards me as being non-UK resident and the Thai governement doesn't tax my worldwide income. That means my overseas earnings are largely tax free either because they are offshore or within the limits of personal allowances, my Thai earnings that are onshore are also subject to a personal allowance plus low rates of marginal tax once they reach the threshold.

[PatOngo]

12 hours ago, simoh1490 said:

What reserves are those then, c'mon, do share.

 http://www.khaosodenglish.com/politics/2017/02/06/thai-treasury-loses-85%-since-coup/

 

What reserves, you ask? Have a read of this!

[simoh1490]

33 minutes ago, PatOngo said:

 http://www.khaosodenglish.com/politics/2017/02/06/thai-treasury-loses-85%-since-coup/

 

What reserves, you ask? Have a read of this!

That story is mischievous at best and has been the subject of a couple of threads on TVF. Firstly, those are not currency reserves or even reserves, it is a reserve account into which money from tax collections is stored before being allocated to budgeted items - the reserve account is a temporary holding pen and nothing more. There is a graph and a table in the 2016 budget which show the inflows and outflows of that account and they are cyclical in line with tax collection dates, at one point in the early part of the year the account is at it's lowest and this was the point picked up by that article. There is however a buffer amount in that account, the minimum that can be there and the governement said last year they would reduce it by around 85% since it represented unproductive  funds that cost money to have in place and had to be borrowed in order to maintain the buffer, they announced that publicly in 2016 and everyone said yes, that's a good idea.

 

I've searched for and posted the link to that budget and the threads on this a couple of times but frankly I can't be arzed to do so again so you'll just have to take my word for it, it's an attempt to portray a normal situation as something sinister, which it isn't and a number of papers have reported similar because it makes for an exciting headline!

 

EDIT to ADD: It seems I bookmarked that link so here's the thread and the detail:

 

Edited May 17, 2017 by simoh1490

[PatOngo]

17 minutes ago, simoh1490 said:

That story is mischievous at best and has been the subject of a couple of threads on TVF. Firstly, those are not currency reserves or even reserves, it is a reserve account into which money from tax collections is stored before being allocated to budgeted items - the reserve account is a temporary holding pen and nothing more. There is a graph and a table in the 2016 budget which show the inflows and outflows of that account and they are cyclical in line with tax collection dates, at one point in the early part of the year the account is at it's lowest and this was the point picked up by that article. There is however a buffer amount in that account, the minimum that can be there and the governement said last year they would reduce it by around 85% since it represented unproductive  funds that cost money to have in place and had to be borrowed in order to maintain the buffer, they announced that publicly in 2016 and everyone said yes, that's a good idea.

 

I've searched for and posted the link to that budget and the threads on this a couple of times but frankly I can't be arzed to do so again so you'll just have to take my word for it, it's an attempt to portray a normal situation as something sinister, which it isn't and a number of papers have reported similar because it makes for an exciting headline!

 

EDIT to ADD: It seems I bookmarked that link so here's the thread and the detail:

 

To be totally honest with you, I don't really care.

[worgeordie]

Foreign investment in the  stock exchange,is not the same as bricks and mortar investments, 

the former can be here today gone tomorrow,but dont let the truth get in the way of the propaganda

regards worgeordie

Edited May 17, 2017 by worgeordie
correction

[simoh1490]

6 minutes ago, worgeordie said:

Foreign investment in the  stock exchange,is not the same as bricks and mortar investments, 

the former can be here today gone tomorrow,but dont let propaganda get in the way of the truth.

regards worgeordie

Regardless of which type it is, here's the 17 year FDI picture:

http://www.tradingeconomics.com/thailand/foreign-direct-investment

 

See also the chart in the attached link showing FDI by industry type:

 

http://www.aseanbriefing.com/news/2017/02/17/thailand-2017-changing-investment-landscape.html

Edited May 17, 2017 by simoh1490

[mikebell]

Worgeordie, how does one invest in 'bricks/mortar in Thailand?  You can't own a house and the condo market is saturated.  Seriously asking; not having a go; I respect your comments usually.

[simoh1490]

Factories, businesses, permanent structures involving material,  staffing and payroll.

 

An interesting report here containing some fascinating data, it seems Thailand's own FDI overseas tripled during 2016, it also states that inbound FDI doubled in 2015:  http://unctad.org/en/PublicationsLibrary/wir2016_en.pdf

Edited May 17, 2017 by simoh1490

[wealthychef]

3 hours ago, simoh1490 said:

A lot depends on your age, how long you intend to remain here and the currencies you are earning in and holding....  if you're planning to try and "settle"... you'll need in country funds and preferably an income stream in Baht. If you don't have those things you leave yourself open to the vagaries of the forex market.

 

3 hours ago, simoh1490 said:

I started coming here before the 1997 crash and brought funds here shortly after wards. USD/THB went from 25 to over 50 and then settled around low 40's for some time and it's been broadly strengthening eve since - GBP was similar, it went to over 90 in 1997 and a combination of GBP weakening and THB strengthening has seen it reach 42 at one point, today it's circa 44.

 

If you had a large enough savings account I think this would all dollar cost average out over time, roughly speaking.  

 

3 hours ago, simoh1490 said:

 

If Thailand is going to be "home" then it helps to have reserves in country, even better is to have an income stream in THB otherwise you'll have sleepless nights - I now have eight years money in country and I invest this in CD's, the SET and governement bonds. I also have income streams from the UK and the US in the form of pensions but that money doesn't get to see Thailand and may never actually do so, my Thai holdings make me self sufficient in that respect. We also own our house plus a fair amount of land and whilst I don't regard that as an investment, sale of those things will realise a profit.

 

I agree that your home is not an investment.  One of the good things about Thailand is cheap real estate, but there is a reason for that -- poor infrastructure.  

 

3 hours ago, simoh1490 said:

 

I would guess that over 75% of the Thaivisa regulars who used to scream everyday how unsafe Thailand is, are now back in their respective home countries having been priced out -

 

I've got to think that many or most of these people had lifestyle issues as well, no?  Were these hard working people good at saving money?   I'm not sure this data point is useful.  

 

3 hours ago, simoh1490 said:

 

the governement is corrupt, the banks are unsafe, the baht is going to crash, you name it, any excuse was given not to invest here. If you scratch the media surface just a little you'll see that Thailand's economy is fundamentally quite strong and has been so for many years: governement borrowings are low, there's a ready and available workforce, unemployment is low, foreign currency reserves are extremely high and the country is not burdened by expensive social care programs or unions - the noise about the junta and coups is exactly that to a large degree, sure they cause blips on the economic landscape but that's all they are, just blips, the economic fundamentals don't change. I've been suggesting we'll see a sub 40 Pound for many years and was ridiculed for a while, we're almost there! Market watchers and investors that I respect and follow believe we'll see USD/THB at 25 again at some point in the future and I agree. So any investment a person makes in Thailand in say the SET or bonds, is likely to make money on the product and on the currency.

 

Yes I could invest in the S&P but I don't although I am invested in the FTSE using funds that are earned in Pounds.

 

Finally, there's a tax advantage for me by investing here since the UK governement regards me as being non-UK resident and the Thai governement doesn't tax my worldwide income. That means my overseas earnings are largely tax free either because they are offshore or within the limits of personal allowances, my Thai earnings that are onshore are also subject to a personal allowance plus low rates of marginal tax once they reach the threshold.

I think I understand your points and the part about the tax advantage is the most interesting to me.  I need to explore that aspect more as it is certainly relevant.  

 

As far as your investment philosophy, what is missing in your analysis for me is a comparison with other investment strategies.  I'm comparing it with investing in US stocks, which is my current strategy.  The only "strategy" I think you are comparing against is the experience of other expats in Thailand, e.g., the fact that other expats often move out after being "priced out" but that seems a dubious observation as there are so many confounding factors there, such as alcohol consumption or other lifestyle errors, which by the way Thailand very much encourages in many guys from the west due to the cheap party lifestyle available here.  Removing the party bros from the equation and focusing only on actual strategies seems a better approach.  The way one gets priced out is that you can't afford to live here any more.  It's hard to understand how moving back to the UK helps that, unless it's just that jobs are better in the UK so you can have a better income.  If investing in Thailand is better than elsewhere, then you should be able to live anywhere on the investment income.  

 

Not sure if my ramblings are even making sense any more, but I appreciate you fleshing your stuff out here.   Definitely food for thought.  

 

It is generally accepted right now that emerging markets are more promising than American investments, but higher risk.  Not that "generally accepted" is any sort of gold standard.  

[simoh1490]

From your comments:

 

The problem for older expats has typically been that they are on fixed income, pensions and matured investments that produce a fixed revenue stream in their home currency. That has been especially difficult for expat Brits who have seen the value of the Pound decline against a strengthening Baht and it is that aspect that has forced them back to the UK rather than jobs. The good thing about being under age 45 is that you can afford to make a financial mistake and still recover, over 45 it becomes difficult, over 60 it's near impossible, hence my initial reference to age.

 

I tend to ignore the lifestyle aspect and the party crowd  as being outside of my equations hence, dunno.

 

I'm not able to make the sort of investment comparison between Thailand say the US that you might be looking for. For me, the triple aspect of currency appreciation, investment return and tax advantages tells me all I need to know at this stage of my life. Having said that, the security of investing in your home market is a significant consideration, albeit the tax element of that security can be onerous for some.

 

You may be correct about dollar averaging, I haven't done the math. but my suspicion is that holders of Pounds would have lost out financially.