Fund managers believe any short-term weakness in the Thai stockmarket due to last week’s military coup could bring good buying opportunities.Thailand is no stranger to military coups. Since it became a constitutional monarchy in 1932, it has seen 18 coups or attempted coups and has been governed by 31 prime ministers. The administration of the ousted Thaksin Shinawatra was the first elected government to complete a full term in office but this year Thailand has had a string of political woes. The most controversial was in February when prime minister Thaksin, who is a very wealthy businessman, caused havoc by selling shares in his family’s conglomerate tax-free for more than 1bn. The urban middle classes in Bangkok demonstrated their anger on the capital’s streets almost daily. Last week’s coup has been largely bloodless and seemingly has the backing of Thailand’s king Bhumibol Adulyadej although he has not officially declared his support. The Thai market was down by 2-2.5 per cent when it reopened on Thursday last week but then rebounded. Friday was weaker for the market as local investors sold . Cuffe says: “Everything related to investor spending has been hit. Some construction companies that were looking positive are down by 20-30 per cent.” Ousted Prime Minister Thaksin’s company was down by 30 per cent but Cuffe says there is lots of buying interest in the market from big foreign investers hoping to get a good deal. Invesco Perpetual head of Asian equities Stuart Parks says: “Our view is that this should have no effect in the medium term and any short-term weakness is a buying opportunity.” Threadneedle Investments emerging markets fund manager Maxine Cuffe says: “Ideally, the military will transfer power quickly to an interim administration, all-owing confidence to return.” General Sondhi said last week that a “caretaker prime minister” would be appointed within two weeks. Close Finsbury Far East equity fund adviser Stephen Swift warns that the tourism industry will be affected in the short term, potentially hitting the stockmarket. Axa Framlington fund manager William Calvert says he “would not expect any extreme negative reactions” in the market. Templeton Asset Management director Mark Mobius says: “We will continue to watch the market carefully and if prices fall as a result of the political situation, we may add to some of our holdings.” Aberdeen New Thai manager Hugh Young says: “From a fundamental perspective, we like Thailand. Our contrarian instinct tells us to look for bargains if more risk-averse investors turn tail.” Fund managers say the long-term effects depend on the reinstatement of a stable government. Swift says: “Longer-term stability must return or foreign direct investment into Thailand, a key positive factor for the economy, could be threatened.” A new constitution could take a year to draft, during which time the military would rule. Many fund managers do not believe this is necessarily bad news and think the change could be positive for Thailand’s market. Calvert says: “Military governments can be much more competent than some elected governments. In terms of the economy, the change of is certainly not negative.” The last Thai coup took place in May 1992 and in its aftermath the market initially dropped by 8 per cent but after eight months it was up by 30 per cent. Emerging market funds fell significantly in May and June this year but the last three months have seen an upward movement. Calvert says: “The coup will have a very marginal impact for emerging markets as a whole.” He believes there is no indication that neighbouring markets in the region will become unstable.
The 1,000 former Millfield advisers that owe the firm over £5m from advance commission paid will be split into two different classes. Former Millfield advisers that joined Bates Millfield will receive help, with the firm having agreed to pay off advisers’ debts up front and let them pay back on a monthly basis. Advisers that […]
Aegon Scottish Equitable head of underwriting Matt Rann says people do not understand how critical-illness cover works and advisers and providers must educate them on what details must be disclosed
HR Trustees has been appointed as independent trustee to the Hoverspeed pension plan by the Pensions Regulator.HR Trustees will pick up guardianship of Hoverspeed’s pension plan during its assessment period by the Pension Protection Fund, following the firm’s insolvency. The plan has around 1,000 members and assets of £16m. HR Trustees is responsible for ensuring […]
Woolwich is being taken to court by a mortgage adviser seeking compensation for a series of alleged service blunders. Strategic Financial Solutions joint managing director Henri Berest has applied to the county court to recover over 2,000 in expenses after he says Woolwich sent plans for a new-build property to a borrower’s old address. Woolwich, […]
A survey conducted by Johnson Fleming at the Pension & Benefits Show 2014 highlighted the key challenges faced within organisations post auto-enrolment. The results showed that communicating the changes and the value of them to staff, and receiving timely data from the payroll provider proved to still be the most challenging aspects of managing an auto-enrolment scheme.
- Top trends
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
The FCA is reviewing the market for preference shares following the furore over Aviva’s recent decision to cancel its high-yielding preference shares at par value. FCA chief executive Andrew Bailey says in a Dear CEO letter that the regulator is reviewing the prevailing market for certain fixed income shares, particularly those classed as perpetual, irredeemable […]
Five years on from the RDR, and the independent vs restricted debate still holds an exalted position in the market. Significant swathes remain fiercely evangelical in their belief that independence is a pipe dream, or that restricted is a recipe for disgraceful shoehorning. Many of these people are unmoved by the dearth of conclusive evidence […]
Investment adviser Glass Lewis has joined Royal London in opposing the re-election of Metro Bank chairman Vernon Hill. Metro Bank is in the midst of a shareholder rebellion following findings that £4.6m in fees for architectural, banking and marketing services were paid to architect InterArch, run by Hill’s wife, Shirley. Royal London Asset Management holds […]