Bloomberg by Anuchit Nguyen, on Jan 31, 2014, reported that the Thai stock market, SET, being hit with the biggest price swings in Thai stocks since the nation imposed capital controls in 2006, is attracting bargain hunting by Invesco Asset Management and Aberdeen Asset Management Plc. Both, reported Bloomberg, are betting on a Bull, based on speculation that corporate profits will weather political turmoil.
Bloomberg reports the SET Index’s 90-day volatility has more than doubled during the past year and was twice that of the MSCI Emerging Markets Index last week.
Bloomberg reports the last time the gap widened this much, after Thailand imposed investment restrictions to stem the baht’s rally in December 2006, the SET advanced 17 percent in six months and outperformed the emerging-market gauge.
Invesco, Aberdeen and BBL Asset Management, which oversee a combined $1.1 trillion, say market swings caused by anti-government protests and $344 million of foreign outflows this month have created buying opportunities among oil producers and phone stocks.
“We have been buying more in Thailand,” Abdul Jalil Abdul Rasheed, a Singapore-based investment director at Invesco, which oversees about $779 billion worldwide, said in an e-mailed interview on Jan. 29. “We are invested in companies, not countries.”
“If you look at the ability to generate profit by listed firms, I think our listed firms are quite resilient,” Charamporn Jotikasthira, president of the Stock Exchange of Thailand, said in an interview with Bloomberg Television. “We’ve already seen foreigners coming back in some sectors, for example the agricultural and export sectors.”
Bloomberg says Thai stock are quote, “Region’s Cheapest.” The benchmark measure of Thailand’s $335 billion market is valued at 11.4 times estimated earnings for the next 12 months, the cheapest among Southeast Asian peers. The multiple dropped to 10.9 on Jan. 3, the lowest since June 2012.
But Bloomberg says that optimism makes the three money managers stand out among global investors. The SET Index has dropped 2.1 percent in January, poised for its third-straight monthly decline, amid a retreat from developing-nation assets that sent the MSCI Emerging Markets Index to its worst start to a year since 2008. The SET lost 6.7 percent in 2013 as foreigners sold a net $6.2 billion of the nation’s stocks, the most since Bloomberg began compiling the data in 1999, and the U.S. Federal Reserve signaled its plans to reduce economic stimulus.