Thai bulls and bears. I just keep on viewing to bargain hunt investor values.
Its fashionable by many to be bearish on Thai stocks now and these, along with the bad news headlines, are keeping this view despite the long sell off to now very low valuations. As I show in a recent article here, Thai stocks, adjusted for low(est) interest rates, are now probably at the lowest valuation they have been in over 20 years. Yet, many entrenched bears keep on going, acclaiming that high single p/e's are still, well too high. For now they can pad themselves on their backs.
Time will tell.
Consider, PTT one of Thailand largest companies by market capitalization is now trading around a low p/e of 9, this vs. its global peers which trade at twice or more that multiple. Yet PTT has probably a higher long term growth rate then those average peers while yielding almost 5% in annual dividends.
In May of 2010, the SET was reeling due to then also vast political troubles with far more injured and deaths then now; yet, not even a year or so later the SET index rose over 40% from that level. Over the past 25 years on modern Thai SET history it has rarely paid to remain bearish for too long as the market roared back and often faster then most anybody would have predicted. The exception of course was the '97 Asian Financial crisis which took 3-4 years to stabilize. Some say " yea but this time is different", same as they said back in May of 2010...yet those words have ah, soo often been proven as the most dangerous words in the investment business.
There is no financial crisis here (!), all the while just now emerging markets the World over have been talked out on being in vogue...don't we hear this everyday by the Western gnomes. In Davos, Switzerland not withstanding. Yet, we know how quickly this can change again and so the long term value investor should stay patient while collecting high dividends which are some 2 times higher then the local Bank interest rates. Investor bargains now go begging here which a few large institutional investors much concur with. (Example, Invesco which manages 1.1 trillion US$ and Aberdeen, one of the best in the business as reported/quoted by Bloomberg).
Best Regards,
Paul A. Renaud.
www.thaistocks.com
