Competitiveness: Feed on Investments Risks then Feed on Thailand!

By Pooky-this blog economics journalist

There has been some reports coming out of New York, that the risk appitite by global investors are currently down. However, the Thai Stock Market is going up and up with some saying it will be up another 100 points before any serious sell-out.

While data indicates institutional investors and foreign investors have sold the Thai stock market in recent month, local brokers are picking up the slack.

  • The following indicates, however, that if you like risk and are a high roller, Thailand is the place to be. It is ranked as one of the most corrupted country in Asia and politically one of the worse place to be. Even the Asian human rights commission is asking the UN investigate Thailand and the UN own investigations is looking into secret CIA prisons, including ones in Thailand.
  • Even a political settlement in Thailand between the right wing and Taksin seems years away-at a time violence is on an up-trend.
  • So looks like a very lucrative situation for advance investors to exploit.

All of that spells great risk off course but as investors knows, “With great risks comes great opportunity.”

Risky Bank Returns Big: A certain bank held by the Thai Finance Ministry and is traded on the stock market, had risen for months on rumors that Finance Ministry will sell it. Normally such a rumor would see the bank stock slap with a halt trade, but in this case months past and finally, the Finance Ministry confirms it is indeed being sold.

Risky Private Water Returns Big: A certain stock market listed private water provider, had been rumored for month that the contrack it has with the state, is filled with highly favorable terms that is causing un-rest with the state labor union. Again, no halt trade was levied, and month have passed and now the state water labor union is demanding a re-view of the contract.

Risky 3G Returns Big: A Thai state telecom has gotten everything worked out for the launch of a state 3G mobile network. The “go” lies at the Finance Ministry and its guarantee of the loan required to get the system going. But despite private carriers on the verge of going big with 3G, the Finance Ministry has said “No Go” for loan guarantee. Many speculates the state do not want to add competition to the fray. Stocks of Thai telecom has been climbing like mad in the past few weeks.

Risky Media Returns Big: Under the previous constitution, all state controlled media, will be divested out of them by the government to ensure politics do not creep into these media reporting of news. However, after the Thai telecom and broadcasting was formed, the new divestiture laws will only cover new media and not cover previous contracts between the state and the private sector. Thai private sector media pays penny on the dollar for these contracts with the government and have profited greatly.

Risky Agriculture Returns Big: Under the old price support scheme for agriculture, the government actually buys and hold the goods in silos, but now have abandoned it. The new system is based on price where farm producers will only have to show how much they got for the agri. goods when sold and take that to the government to make up the differences what the government’s stated price support. Many have said corruption will buffet the system as never before.

Risky Strong Thai Returns Big: The government is under pressure to get the Thai GDP up and it is doing that by borrowing and spending massively, under the strong Thailand program. Most of the spending is on a fast track program, meaning with little due process. If ever there is a time to really get above fair market return, it is now with the strong Thailand thing.

Risky Merger Returns Big: Well, today there are rumors in the stock market about merging petrochem giants and that drove several petrochem firms sky high. In fact the rumors have been around for a long time about this big merger and this is just a spiker of re-newed interest in the rumor. And as usual, there is no halt from the stock market.

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