Time For Thailand To Head To The Polls
Thursday, March 30, 2006SUSIE GHARIB: Thailand is heading to the polls on this Sunday, following a snap election called by the country`s embattled prime minister. But with the opposition boycotting the vote, the election might not bring an end to the months of political turmoil. Despite the uncertainty, analysts are still bullish about Thailand`s stock market, one of the best performers in the region last year. Rian Maelzer reports.
RIAN MAELZER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Thailand or set. The monthly event is just one way Set is aiming to boost knowledge and interest in this low profile, but high growth exchange. Looking at stock prices in relation to corporate earnings, Set is the most undervalued exchange in Asia after Japan.
VICHATE TANTIWANICH, EXECUTIVE V.P., STOCK EXCHANGE OF THAILAND: The low interest right now, it`s something like 3 to 4 percent. Compared to the earning growth of the stock exchange, it`s almost 10 percent a year, plus dividend yield of 5 percent on average.
MAELZER: Given Thailand`s level of economic growth, analysts feel the market could gain a good 30 percent over the next two years. Yet currently, few Thais have any involvement in the stock market, including holding mutual funds. To try to change that, Set puts on road shows, runs a popular business library for the public and has launched its own 24-hour business TV channel. It even produces a sitcom containing lessons on investing.
SUPAVUD SAICHEUA, MANAGING DIR., PHATRA SECURITIES: They are doing all they can. I think that they have done a really good job, very imaginative, very dynamic, very forward-looking.
MAELZER: But if it`s to really take off, analysts Say set needs to attract more foreign investors.
SAICHEUA: Only maybe about 30, 40 Thai stocks are liquid enough, big enough and trade at high volumes enough for foreigners to feel comfortable owning to the extent that if they needed to sell, it would sell.
MAELZER: Recent efforts to boost the number of big public offerings have hit obstacles. Plans to list the country`s largest alcoholic drinks maker were put on hold after protests by anti-alcohol, social and religious groups. And the courts halted the planned privatization and listing of the country`s electricity-generating monopoly. It would have been Thailand`s largest public listing ever.
TANTIWANICH: This concerns us quite a lot because if we have these kinds of stocks in the stock market, it will attract foreign investors.
MAELZER: Set and investors hope the legal and political difficulties dogging the listing of the liquor company Thai beverage and electricity generator Egat can be sorted out in the months ahead. Set is counting on those listings and further big privatizations to give the Thai Stock Exchange the kind of profile it believes its performance and value have earned. Rian Maelzer, NIGHTLY BUSINESS REPORT, Bangkok.
