asia-invest.info

In May 2008 Mark Mobius, Templeton Asset Management Ltd.’s top manager for emerging market equities, recommended to invest into Thailands stock market. On May 26th, an article on Bloomberg.com titled Mobius Expects Thai Stocks to Extend Gains on Tax Cuts, Exports painted a bright picture of the Thai stock market. On the same day the SET index closed at 856,80 points. Today, less than one month later, the Thai stock market dropped again, leaving the SET index at 742,46 another loss of 23.28 points compared to the day before. A loss of more than 13% in less than one month does not really encourage investors!

While today Finance Minister Surapong Suebwonglee speaks at a seminar on Thai stock market at the Grand Hyatt Erawan Hotel in Bangkok, investors might have to ask themselves several questions.

How will Bank of Thailand’s Monetary Policy Committee decide, when it meet to discuss interest rates on July 16th and August 27th? How will any decision influence GDP growth and inflation? A year on year GDP growth of 6% was still in favour of stock investors while the inflation rate of 7.6% in May 2008 already raised fears about the future.

What will happen when anti-government marches planned for tomorrow will surround Prime Minister Samak Sundaravej’s office and do not leave until he resigns from office? Will Thailand’s police be able to handle the protesters or will protest turn violent and might the army take action again?

In 2006 Prime Minister Thaksin Shinawatra was ousted in a military coup and on May 29st, 2008 The Economist reported that protest and coup rumours return. A wellknown investor recommend once to buy stocks, when the streets are full of blood. Hopefully the street protests will not turn violent, but it seems that brave investors should start to buy Thai stocks, mutual funds or simple index certificates.

Those who invested on January 10th, 2007 into SET certificates at 622.27 could earn more than 45% until October 31st, 2007, when the SET index closed at 907.28 points. As a matter of fact the situation in not clear at all. But if the market falls below 700 points, it is time to start with investments and to accumulate even if the markets continues to drop!