Learning to invest in Thai Stocks

Asia Stocks Fall on China’s Manufacturing Report; Ringgit Drops
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By Linus Chua and Saeromi Shin

June 1 (Bloomberg) -- Asian stocks fell, extending the biggest monthly decline since October 2008, and emerging-market currencies weakened after Chinese manufacturing growth slowed more than estimated. The euro dropped after consumer confidence in the region declined.

The MSCI Asia Pacific Index sank 0.8 percent to 112.54 as of 4:07 p.m. in Tokyo. The Stoxx Europe 600 lost 0.9 percent to 242.90. The Malaysian ringgit and copper slid, while the euro weakened against the yen and the dollar. Futures on the Standard & Poor’s 500 Index decreased 0.3 percent.

Chinese manufacturing expanded at a slower pace in May, raising concern the world’s fastest-growing major economy is losing steam. The European Commission said yesterday its gauge of executive and consumer sentiment in the 16 nations using the euro fell last month, while a separate report today may show the unemployment rate increased in Italy.

“There seems to be a worry that China’s strong economic expansion may be held back, and that may affect countries that depend heavily on China’s demand,” said Lim Chang Gue, a fund manager at Samsung Asset Management in Seoul, which manages $30 billion. “Also, if economic figures in troubled European countries turn out to be clearly deteriorating, that could add anxiety to the markets.”

More than two stocks fell for every one that rose on the MSCI Asia Pacific Index. The measure lost 9.8 percent in May, the biggest monthly drop since the collapse of Lehman Brothers Holdings Inc. more than 18 months ago.

China’s Manufacturing

China’s Purchasing Managers’ Index dropped to 53.9 from 55.7 in April, seasonally adjusted, the Federation of Logistics and Purchasing said, less than the median 54.5 estimate in a Bloomberg News survey of 18 economists.

Japan’s Nikkei 225 Stock Average declined 0.6 percent on concern the nation’s political instability may slow the economic recovery, while South Korea’s Kospi index lost 0.7 percent as the country’s inflation accelerated in May. Australia’s S&P/ASX 200 Index slid 0.4 percent.

Toyota Motor Corp., which gets 71 percent of its revenue outside Japan, slipped 0.5 percent. Sony Corp., which gets 69 percent of its sales outside Japan, dropped 1 percent. A stronger yen reduces the value of overseas sales at Japanese companies when repatriated.

Prime Minister Yukio Hatoyama said he will consider his political future and do “what’s best for the people of Japan” after polls showed four in five voters want him to step down six weeks before mid-term elections.

Hitachi

Hitachi Ltd. slumped 3.5 percent. President Hiroaki Nakanishi said the “financial confusion in Europe is affecting various parts of our business,” the Financial Times reported, citing an interview.

Utilities gained after Goldman Sachs Group Inc. upgraded its recommendation on Japan’s power industry to “neutral” from “cautious,” saying current valuations are “reasonable.” Tokyo Electric Power Co. jumped 4.3 percent after Goldman Sachs boosted its rating to “buy” from “neutral.”

The Malaysian ringgit weakened 0.8 percent to 3.2887 per dollar, the most in a week, following the manufacturing report from China, the nation’s biggest overseas market. The South Korean won slid 1.2 percent to 1,216.18 per dollar.

“This could be the first sign of China feeling the slowdown in Europe,” said Wan Suhaimi Saidi, an economist at Kenanga Investment Bank Bhd. in Kuala Lumpur. “You can’t expect super-strong currency appreciation in the second half.”

Euro, Aussie

The euro weakened against 10 of 16 major counterparts, extending its longest monthly decline against the dollar in 10 years, after the index of executive and consumer sentiment in the nations sharing the euro tumbled. The euro fell to as low as $1.2245 in Tokyo from $1.2306 yesterday in New York. The common currency declined to as weak as 111.33 yen from 112.31 yen. The Aussie dollar sank as much as 0.9 percent to 83.84 U.S. cents.

The Australian dollar weakened for a third day after the nation’s central bank left interest rates unchanged. The currency fell 0.8 percent to 83.91 U.S. cents from 84.59 cents in New York yesterday and 83.65 cents before the rate decision.

Joblessness in Italy, Europe’s fourth-biggest economy, grew to a seasonally adjusted 8.9 percent in April from 8.8 percent the previous month, according to a Bloomberg News survey of economists before Istat releases the data today.

Copper tumbled as metals extended their decline on the reports from China, the world’s biggest metals consumer. Copper for three-month delivery fell 2.4 percent to $6,770 a metric ton.

The cost of insuring Asia-Pacific bonds from non-payment rose, according to traders of credit-default swaps. The Markit iTraxx Japan index increased 7 basis points to 144 basis points, according to Morgan Stanley prices, and the Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan rose 9 basis points to 144, according to Royal Bank of Scotland Group Plc.

To contact the reporters on this story: Linus Chua at lchua@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net.
Last Updated: June 1, 2010 03:07 EDT

"Breakingnews » Breakingnews
Public debt rises to 42.39% of GDP

* Published: 3/06/2010 at 03:25 PM
* Online news: Breakingnews

The country’s outstanding public debt at the end of March was 4.12 trillion baht, or 42.39 per cent of gross domestic product, up 49.57 billion baht from a previous month, the Ministry of Finance reported on Thursday.

Of the total, 372.30 billion baht or 9.03 per cent was foreign debt, while the balance of 3.75 trillion baht or 80.97 per cent was domestic debt, the ministry said.

A total of 2.76 trillion baht were loans directly acquired by the government, 1.10 trillion baht were loans sought by non-financial-institution state enterprises, 188.57 were loans acquired by financial-institution state enterprises guaranteed by the government, and 70.11 billion baht were loans acquired by the Financial Institutions Development Fund (FIDF).

The government’s directly acquired loans were up from February by 49 billion baht, while the debt of non-financial-institution state enterprises increased 2.55 billion baht and FIDF’s debt rose 482 million baht.

The debts of financial-institution state firms guaranteed by the government were down 2.46 billion baht.

The increase in the government’s directly acquired debt was mainly caused by the issuance of 36 billion baht of government savings bonds, to raise funds to compensate for the budget deficit, the ministry said.
About the author

columnist
Writer: Online Reporters
Position: Online Reporters"

Ray- ft.com has data over several years for thai companies- very good tools too for selecting growth and value stocks.

The big question as you and Arak have been discussing is when to sell (or buy)? This is the reason why charting is so useful. I taught myself using this book "the neatest little guide to stock market investing" jason kelly. You can pick it up in asia books- well worth it. Bloomberg.com gives you the three main charting indicators (MACD, relative strength, rate of change) for every thai stock so all you have to do is learn how to interpret them- its surprisingly easy. I have had a good success rate so far using these charts to determine which day to sell or buy- basically the three indicators give you an indication of whether a stock price trending up or down- if all three indicate up , then buy!

Even with the big fall in the SET in the last 3 weeks, i have still come out ahead- partly because i got 180,000 baht in dividend payments from my portfolio in the last 6 weeks (nice to receive these checks in the mail!).

BANGKOK, 4 June 2010 (NNT) – The domestic political unrest and a potential cabinet reshuffle will not create much impact on Thailand’s economy, according to the Siam Commercial Bank Economic Intelligence Center (SCB EIC).

SCB Securities chief economist Sethaput Suthiwart-narueput opined that the prolonged political standoff would only cause mild effects on the overall economic system in Thailand. He reasoned that both the economic structure of the country and the export sector, which was the driving force of the economy, still remained strong and healthy.

Mr Sethaput also foresaw that if the export sector was affected by the political upheaval in a long run, the confidence of both customers and foreign investors would be lowered, and they might shift their investments to other countries.

The economist added that the national gross domestic product (GDP) growth for the second quarter this year would be comparable to the same period of last year. Moreover, he said the GDP for the whole year of 2010 would likely stand at 4.5%-5% as anticipated.

Mr Sethaput believed that the possible cabinet reshuffle would have no adverse effects on Thailand’s economy because many government policies could still be pushed forward.

bumper wrote:Well yesterday down 1200 Baht, got that back and another 2500 today.

Not sure what did it. Maybe the fact there won't be a change in Government.

Business » Economics
The economy is not the issue
Thailand's financial fundamentals remain strong despite the recent unrest, but unless the nation moves quickly to address the underlying causes it risks the label of 'failed state'

* Published: 6/06/2010 at 12:00 AM
* Newspaper section: Spectrum

The violent end to two months of political unrest in Bangkok has put the brakes on what had been a promising recovery for the Thai economy. Growth has declined by 5% in the current quarter from the first quarter, according to Anusorn Tamajai, dean of economics at Rangsit University, who added that prospects for the third quarter are also poor.

"[Economic growth] should start edging up in the fourth quarter if there isn't any more violence and it becomes distinctly apparent that political problems can be resolved," he said.

He also thinks it is still possible for the economy to expand this year even if it does slip into a negative zone for a while because the Thai economy grew by as much as 4.3% in the last quarter of 2009.

Mr Anusorn estimated that the damage from the unrest would amount to 400 billion baht. This represents an ongoing loss and not just the initial tally. The tourism industry should lose about 160 billion baht, and there will be further losses mounting from a slowdown in investment and decreased consumption.

"Investment alone is a major issue because over the long term political instability undermines investors' confidence in Thailand."

The impact on confidence is clearly reflected by foreigners' sales of Thai stocks - nearly 59 billion baht in the month of May alone - while the impact on tourism has been reflected in a 20-30% decrease in daily arrivals at Suvarnabhumi Airport in April and May.

Anusorn Tamajai.

Flagging investor confidence is very serious because it could lead to production bases being shifted elsewhere. The government should move quickly to promote reconciliation, said Mr Anusorn, to assure investors that violent confrontation will not occur again.

"Unity builds up if the truth is known and facts are ascertained as to why this problem arose - if these facts are accepted by all."

Mr Anusorn suggests that an independent and neutral committee be set up to investigate the facts and find the truth about who was really responsible for events, followed by a genuinely fair judicial procedure.

"I suggest that Parliament set up a reform and reconciliation council consisting of only members elected by the people.

"This council should work on resolving problems stemming from structural conflicts and those related to violence, because Thailand is at an important transitional juncture. If we have this sort of a body and the right mechanism it would help reduce violence and political conflict.

"This council should function separately from Parliament. but there should be collective responsibility to resolve problems and launch reforms," he added.

Mr Anusorn warned that if problems threatening national stability are not sorted out and more violence ensues, then it is possible that agencies such as Moody's, Standard & Poors and Fitch would reduce Thailand's credit rating. While this would not affect the country's fiscal position and ability to service debt right away, it would do so later.

Under the current economic circumstances he suggests that the government extend measures to spur the economy, especially the property sector, by extending the reduction of the transfer and other fees. Although the government has already extended the transfer fee reduction until the end of June, he feels this should be re-extended until year's end.

"Where the baht is concerned, the exchange rate will be very volatile, with the Thai stock market also being extremely volatile and risky."

Some analysts have painted an extremely bleak picture for Thailand and a few have even used the term "failed state", a notion Mr Anusorn rejects. However, papers on the subject prepared by Rangsit University do call attention to 12 issues that must be considered (see table):

Mr Anusorn said that economic issues are clearly not problematic, as Thailand easily passes all of the tests. However, a deeper look shows that although social problems such as demographic change or internally displaced persons are not critical in Thailand, the third issue on the list - a legacy of vengeance-seeking groups with grievances - is real and worrisome.

"When Thaksin was in power, there were protests and there were people who opposed this movement, but the government did not use harsh action against them, and this led to a coup," he said.

"After the coup there was dissatisfaction and with the dissolution of two political parties - Thai Rak Thai and its successor, People Power - there was a feeling of injustice and that double standards were enforced. So this issue is relevant to Thailand."

In Mr Anusorn's opinion the seventh issue, criminalisation and/or delegitimisation of the state, raises a question. Although the Abhisit Vejjajiva government was formed with the votes of elected MPs and through an accepted parliamentary process, some still see it as an indirect creation of the 2006 coup.

The fact that the government was reduced to operating out of a military barracks for nearly two months also raised the issue of legitimacy among its critics.

"So it's not clearly black or white, and this raises a small question mark. But it is not like the government in Burma. It is partly questionable, so therefore we cannot say Thailand has a real democracy.

"But real democracy will arise if there is justice and brotherhood. When there is justice, reconciliation and brotherhood are easy and democracy can be stable."

Thailand also faces the "state within a state" challenge, because the current government and its two predecessors headed by Samak Sundaravej and Somchai Wongsawat were unable to get some officials to do their bidding. The 11th issue, the rise of factionalised elites, is worrisome in light of the influence of both yellow shirt and red shirt figures pursuing different agendas - and not necessarily on behalf of the public at large as they claim.

Such people need to focus on building the country rather than building up hatred to destroy their opponents, said Mr Anusorn.

Looking comprehensively at these issues, he has come to the conclusion that Thailand is not yet a failed state.

"But I want to ask, are we almost a failed state, or is it possible that we could become one? It is possible if we are unable to resolve problems about stability and the solidity of the political system."
About the author

columnist
Writer: Nina Suebsukcharoen
Position: Writer

bumper wrote:I think this only backs up the message I got from Thaistocks this morning, I have one stock that has climbed 87%. Paul has indicated that it's time to take the profits. I will sale and put 39K back in my buy account. Paul has made no more recommendations for buy. So I might be sitting tight for awhile. That's OK. Through this time I will continue to put my 15K into my buy account, to build it up

Business » Economics
The economy is not the issue
Thailand's financial fundamentals remain strong despite the recent unrest, but unless the nation moves quickly to address the underlying causes it risks the label of 'failed state'

* Published: 6/06/2010 at 12:00 AM
* Newspaper section: Spectrum

The violent end to two months of political unrest in Bangkok has put the brakes on what had been a promising recovery for the Thai economy. Growth has declined by 5% in the current quarter from the first quarter, according to Anusorn Tamajai, dean of economics at Rangsit University, who added that prospects for the third quarter are also poor.

"[Economic growth] should start edging up in the fourth quarter if there isn't any more violence and it becomes distinctly apparent that political problems can be resolved," he said.

He also thinks it is still possible for the economy to expand this year even if it does slip into a negative zone for a while because the Thai economy grew by as much as 4.3% in the last quarter of 2009.

Mr Anusorn estimated that the damage from the unrest would amount to 400 billion baht. This represents an ongoing loss and not just the initial tally. The tourism industry should lose about 160 billion baht, and there will be further losses mounting from a slowdown in investment and decreased consumption.

"Investment alone is a major issue because over the long term political instability undermines investors' confidence in Thailand."

The impact on confidence is clearly reflected by foreigners' sales of Thai stocks - nearly 59 billion baht in the month of May alone - while the impact on tourism has been reflected in a 20-30% decrease in daily arrivals at Suvarnabhumi Airport in April and May.

Anusorn Tamajai.

Flagging investor confidence is very serious because it could lead to production bases being shifted elsewhere. The government should move quickly to promote reconciliation, said Mr Anusorn, to assure investors that violent confrontation will not occur again.

"Unity builds up if the truth is known and facts are ascertained as to why this problem arose - if these facts are accepted by all."

Mr Anusorn suggests that an independent and neutral committee be set up to investigate the facts and find the truth about who was really responsible for events, followed by a genuinely fair judicial procedure.

"I suggest that Parliament set up a reform and reconciliation council consisting of only members elected by the people.

"This council should work on resolving problems stemming from structural conflicts and those related to violence, because Thailand is at an important transitional juncture. If we have this sort of a body and the right mechanism it would help reduce violence and political conflict.

"This council should function separately from Parliament. but there should be collective responsibility to resolve problems and launch reforms," he added.

Mr Anusorn warned that if problems threatening national stability are not sorted out and more violence ensues, then it is possible that agencies such as Moody's, Standard & Poors and Fitch would reduce Thailand's credit rating. While this would not affect the country's fiscal position and ability to service debt right away, it would do so later.

Under the current economic circumstances he suggests that the government extend measures to spur the economy, especially the property sector, by extending the reduction of the transfer and other fees. Although the government has already extended the transfer fee reduction until the end of June, he feels this should be re-extended until year's end.

"Where the baht is concerned, the exchange rate will be very volatile, with the Thai stock market also being extremely volatile and risky."

Some analysts have painted an extremely bleak picture for Thailand and a few have even used the term "failed state", a notion Mr Anusorn rejects. However, papers on the subject prepared by Rangsit University do call attention to 12 issues that must be considered (see table):

Mr Anusorn said that economic issues are clearly not problematic, as Thailand easily passes all of the tests. However, a deeper look shows that although social problems such as demographic change or internally displaced persons are not critical in Thailand, the third issue on the list - a legacy of vengeance-seeking groups with grievances - is real and worrisome.

"When Thaksin was in power, there were protests and there were people who opposed this movement, but the government did not use harsh action against them, and this led to a coup," he said.

"After the coup there was dissatisfaction and with the dissolution of two political parties - Thai Rak Thai and its successor, People Power - there was a feeling of injustice and that double standards were enforced. So this issue is relevant to Thailand."

In Mr Anusorn's opinion the seventh issue, criminalisation and/or delegitimisation of the state, raises a question. Although the Abhisit Vejjajiva government was formed with the votes of elected MPs and through an accepted parliamentary process, some still see it as an indirect creation of the 2006 coup.

The fact that the government was reduced to operating out of a military barracks for nearly two months also raised the issue of legitimacy among its critics.

"So it's not clearly black or white, and this raises a small question mark. But it is not like the government in Burma. It is partly questionable, so therefore we cannot say Thailand has a real democracy.

"But real democracy will arise if there is justice and brotherhood. When there is justice, reconciliation and brotherhood are easy and democracy can be stable."

Thailand also faces the "state within a state" challenge, because the current government and its two predecessors headed by Samak Sundaravej and Somchai Wongsawat were unable to get some officials to do their bidding. The 11th issue, the rise of factionalised elites, is worrisome in light of the influence of both yellow shirt and red shirt figures pursuing different agendas - and not necessarily on behalf of the public at large as they claim.

Such people need to focus on building the country rather than building up hatred to destroy their opponents, said Mr Anusorn.

Looking comprehensively at these issues, he has come to the conclusion that Thailand is not yet a failed state.

"But I want to ask, are we almost a failed state, or is it possible that we could become one? It is possible if we are unable to resolve problems about stability and the solidity of the political system."
About the author

columnist
Writer: Nina Suebsukcharoen
Position: Writer