To understand more about Thai stocks. An example choice.

Poor understanding can result in less trust and then so lack of appreciation.  The astute global investor should take a bit of time gearing up on this. Today I share a stock I just now like and so wish to present as just one of many examples.  Fact is over the years -and despite allot of variability-  Thai stock value investing has proven rather very rewarding over the years. If done in the right way and with patience.  This article is open to all members and free registered free users.

To understand more about Thai stocks. An example choice I today add to my present model portfolio.

With the SET now flirting at the year low point one has to ask if not more Thai's besides the Foreigner investors will come back, stay put, or sell-out more?  Interest rates remain ultra low, with bank savings yielding less then 1%,  oil/gas and gold are in a rut (investor wise), and many wealthy investors are already loaded with property.  Many real estate markets like Singapore and Australia, just to name 2, are saturated and/or overvalued if not illiquid. Hence these have plateauing, or outright downside risks.

For sure some are reluctant to invest in stocks of Thailand because few of them know and so trust, the Thai stock market.  Not knowing (or understanding) is so often akin to not liking -nor then trusting.  To make matters worse, the current political situation scares perhaps more than a few investors away. The often -if not usual- one sided headlines from the Western press does not help.  As we all know about markets, they need "stability" and Thailand has offered little of that over the last few years...but then again, neither have developed markets where we must all remember how the last dire global economic crisis originated from. A horrible financial crisis at that, which nearly sent the world into abyss.

Yet to the informed, the current Thai situation is in many ways better than the past but still no one trusts a market when there is a lack of political legitimacy, even if temporary..even if for some good reasons.  On the other hand China has shown the world over the past decade that there is more than one way to modernization.

Ultimately, I think the biggest handicap is that people from all walks of life besides investor interest are reluctant to open their minds -and with help- educate themselves about how the SET works and why their shares are held in custody and not with the local brokers.  Realize, no local Thai broker holds the shares of their clients.  These are all held in trust by the “Thai Security Deposit Center”, never the broker.

Regarding the SET continued malaise, I for one think this has most to do with the Thai economy slowing down to a near trickle in the first half of this year, then any other factors. The same is true from Singapore to Malaysia and other regional economies here.

Many experts expected an economic pickup in the 2 Q, however this did not happen.  In good part because 1) China slowed down further, 2) the Thai Baht (was) kept too strong...and the whole developed world is still running on "less than 4 cylinders".  3) Not least exports dried up.

Also, just to correct some usual Western bias reporting many believe:  had the coup not happened last May 22 2014, things almost certainly would have evolved to more instability, despite the country remaining officially still a "democracy". Hence at the margin Thailand is far more stable now than in the recent past.  Few foreign press reports mention this, as they got the Western biases.

Investors remember just last February '15,  8 months after the coup, the SET did re-touch a new high right above 1600, because it was then felt the Thai economy was on the rebound.  As ex-President Clinton said many years ago "It's the economy, stupid".  Hence Thai stocks in general are being held back more by the decelerating economy to date, than anything else.  

Looking back to year 1992, when there was back then as well a peaceful coup.  Shortly thereafter more good reforms were put in place than ever before, and the market recovered sooner then later. But so did the economy. Similar with the previous to last coup a few short years ago.  So in hindsight those "set backs", can actually be steps forward, in time.  As I think it will be this time.

 BANGKOK Reports, July 19 2015.: -- POLITICAL office holders found guilty of corruption should not only be banned for life but also face jail, vice president of the National Legislative Assembly (NLA) Peerasak Porchit said yesterday.

The Baht currency is weakening now a bit,  oil prices have further tamed, and tourism has changed but its doing very well.  The Chinese are visiting "en masse" and spend more per day (5700 Baht then the average Western tourist. The USA economy and $ keep inching upwards and the EU is at last getting its house a touch more together?  Last but not least, massive Thai infrastructure spending is finally taking place here.  My call so is the Thai economy will rebound some into the second half -and so will the SET.  Year 2015 should end on a higher note, stock market wise, then it is now.  Then, as so often in the past, investors will come out of their cocoon and want to buy higher, with the hope to selling still higher. Deja vu all over again.  But to achieve superior returns you got to buy low and sell high.

One stock choice today I want to bring to all of my member and free registered users attention (as just one example) is BJCHI (7.35) *.  This stock currently dividend yields a touch above 7%,  has no debt besides a p/e of only around 10, or just about half the average SET stock.   The company expects to have a rising revenue and earnings profile into the second half -and next year.  It has a market cap of around 350 mill. US$,  and nearly 1.4 Bill. Baht of cash in hand.   I rate this stock with a buy view and hope to so here show -with this single example- how to benefit from Thai stock market investing, if you can get beyond the noise and over negative headlines. 

Of course it is always wise to always diversify a stock portfolio.

Best Regards to all our contributing Members and Free Registered Users,

Paul A. Renaud.

www.thaistocks.com

* BJC Heavy Industries (BJCHI), engages in engineering services, which provide manufacturing and installation services for equipment used in production processes in heavy industry  plants, customized in accordance to size and design specified by the customer in various industries such as energy, refinery, power plants, natural gas, petrochemical and mining. The nature of products and services can be divided into four main categories including steel modularization, site erection and precast concrete.

Regarding insider buy/sell transactions on BJCHI, I only see “buys”.  See here:

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