The Thai stock exchange offers some of the highest so called "yield-gap" stocks -anywhere in the world! But the Thai Stock Exchange is very distorted by just a very few stocks, most notably DELTA, getting all the action.
Today March 24 as just one example, was a recovery day on the SET, so lets look at some numbers:
--DELTA by far and then some was the most active at 10,143 Bill. Baht traded. (DELTA p/e is 145, vs. SET average p/e at 16.1)
--PTT second most actively traded stock was 3,554 Bill. Baht.
--GULF third most actively traded at 3,324 Bill. Baht.
--PTTEP forth most actively traded at 2,537 Bill Baht.
The SET index as a whole today traded 73,737 Bill Baht, so DELTA alone made up 13.7% of
the entire SET of more than 639 SET listed companies (not including MAI)! So the next 3 most
active stocks here do not even come close to the total trading Baht volume of the (regular) single top traded stock. It begs the question why is DELTA stock so not a SET designated can trade on "Cash balance" only?? Here its not a stock exchange, more like for long, a DELTA stock glamor exchange.
This so very for long is not unusual -and shows how skewed and unbalanced the Thai SET stock market truly is.
Yet, much else is all but ignored despite some of the highest dividend yielding stocks anywhere, at 6-8%. This means an ultra-high "yield cap." I believe this "yield-gap" is among the World's biggest distortion anywhere! DELTA trades at 8 times the average valuation of the SET and dividend yields not even 1/10 compared to the average SET stock. Truly Amazing while hardly ever reported.
Why is this: 1) retail investors have shunned local stocks for some years due to a bearish mkt., and not least because, 2) brokers indirectly nurture endless "trading galore", among the just very few -way overvalued- big cap stocks, like example DELTA (p/e 145, dividend yield 0.22%). Thereby all but ignoring the impressive/established high dividend "yield horses". A most upbeat investor case can be made around these...and I know how to pick them!
Further, and most interestingly: they have just about zero or even negative correlation, to the US bubbly stock mkt. In finance & investment we can show how offsetting-correlations are a very desirably portfolio enhancer(!) and risk reducers. Especially during times of US stock market excesses. All notably on top of 0-1% Thai inflation and a strong Thai Baht currency!
Paul A. Renaud.
www.thaistocks.com
