On some likely events in year 2014. China sets the tone.
The year ends with Thai stocks in the doldrums. Something big may hit some politicians on Jan 10 '14 -an upcoming Thai date of seeming importance. As the ax then may well fall here as well: apparent rampant rule/law violations no longer just go on tolerated as in the past. And this is the jist of the present Thai uprising. Who can stand up with a straight face to members of parliament which violated the rules? Yes, in the short run its messy but in the longer run it may well be the start of a less corruption tolerant society. This will lead to a higher market p/e valuation.
And China seems to just have set more of the tone in that great land, for what may well come in Thailand now!
Consider that in China corruption was third among the top public 10 top concerns in 2013, up from 7th in 2012. This according to a survey by the website of "People's Daily" carried out every March before the National People's congress. China's new communist party leadership headed by Ki and Premier Li K., which took office in November 2012 in a once a decade power transition, in its speech it focused on that [i]"unless they address corruption social unrest may rise and lead to the demise of the party". [/i] Does this not sound familiar in/for Thailand now?
A total of 512 delegates in the People's congress in Hengyang city in Hunan province just resigned on Dec 27, after they took bribes, according Kinhua News agency reported that day. Another 56 provincial -level congress delegates from Hengyang were found to have used more then 110 mill. yuan (18 mill US$) to win their elections. The elections were just declared invalid according the Bloomberg news reports, whom reported on all this Hu Guochu was outright removed as head of the Hengyang people's congress etc.. This scandal was broadcast a couple of days ago on state-controlled China central TV.
"Tigers as well as flyes will be removed" in a broad step and action to curb election fraud. "Rampant violations will result in severe punishment". And almost in a prelude to what may happen in Thailand, China just did so. If this takes hold and evolves it will over time result in an higher average stock p/e ratio.
Paul A. Renaud.
www.thaistocks.com
