By Carl Delfeld of Chartwell ETF
Thailand ETFs (TF, THD) have taken a beating this year but perhaps offer some opportunity for long-term investors.
The SET index of Bangkok’s 50 largest stocks is on course for its worst year since 1997, while the baht has erased all its gains against the dollar over the past two years. Part of the problem is that Thailand doesn't really have a government which is currently working out of temporary offices in an old airport. The opposition People’s Alliance for Democracy, are now escalating their six-month campaign to eject a regime they see as a puppet for the exiled leader, Thaksin Shinawatra who was recently convicted of corruption. Thailand has suffered through one coup every four years, on average, since the country’s first constitution was drawn up in 1932.
But Thailand's export-led economy is doing relatively well given the circumstances growing by 4% the third quarter after a 5.3% gain in the second. And the Financial Times points out that unlike in the crisis of the late 90s, Thailand’s banks are now mostly equity, rather than debt-funded, and have minimal overseas exposures. Surprisingly, the key engine of the economy – tourism – is so far holding up: arrivals have fallen only fractionally. Finally, the central bank has some $103bn in reserves.
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