Bangkok--17 Jul--SET
A delegation of the Thai government and private sector attended the “Thai Equity 2006: Investor Forum”, a special meeting involving leading Singaporean investors, representatives of the Ministry of Finance, The Stock Exchange of Thailand (SET) and leading listed companies, held in Singapore during July 13-14, 2006. Mr. Thanong Bidaya, PhD., Minister of Finance, who led the delegation, discussed political and economic developments and opportunities for businesses in Thailand.
“The Thai economy remains strong, demonstrating sound fundamentals, with the gross domestic product (GDP) rising during the first half of this year at 5.5%. This was a 6% growth in the first quarter of 2006, and a 5% growth during the second. During the second half of the year, there may be some slowdown in economic growth, due to the strengthening Thai baht, which is starting to affect exports. Meanwhile, high oil prices have also depressed public consumption,” Dr. Thanong said.
Concerning the ongoing political situation and investment, Dr. Thanong asserted that the country remains democratic, and occasional disruptions are normal for any democratic system, as occurs in many countries. While violence is not expected, there are conflicting opinions, but once the political heat is over, he believes that the Thai economy will be stronger, and there will be a general election this year.
“This road show is aimed at creating better understanding and presenting hard information to investors. Despite some outflows, net foreign investment figures remain strongly positive, displaying an optimistic view of Thailand. Furthermore, the overall performance of listed companies, especially the banking sector, which continues to post significant profits, remains good, ” he added.
Inviting large listed companies to the Singapore road show has been successful, with 34 institutional investors, such as mutual funds, Goldman Sachs Singapore, Government of Singapore Investment Corporation, HSBC Investment Holdings and UBS Global Asset Management (UK), showing a great deal of interest, and 141 face-to-face discussions occurring with listed companies. Sixty top executives attended these talks, while the international media has been covering events very closely, SET President Mrs. Patareeya Benjapolchaim declared.
“Most of the questions raised by foreign investors concerned the effects of political turmoil, rising oil prices, and overseas situations that impact on public companies. Most understand that SET remains attractive because of low securities prices and a P/E Ratio of 9, compared to 15 to 20 in other regional markets. From the beginning of this year, net foreign buys stand at almost THB72 billion , despite foreign investors’ concern about world events and the oil price. When our local political problems are resolved, we expect be more continued foreign investment”, she reported.
Dr. Supavud Saicheua, Managing Director and Head of Research Group of Phatra Securities PLC, who was also the organizer of the road show, said that the Minister of Finance’s statement was the highlight of the event for him, because investors are looking for factual information on which to base their decisions. In the past, many countries would organize a road show only to give a positive spin. However, he said that when the situation is mixed, investors most need credible information. Then, all can accept the facts as they are, and credibly-informed investors are more likely to maintain long-term confidence in a visiting country’s economic future.
“The 34 funds that attended represent more than 50% of foreign investment in the Thai stock market. Among the 10 Thai listed firms, those that received the most interest, were Airport Authority of Thailand PCL, and Asian Property Development PCL, who hosted up to 18 discussions with investors,” Dr. Supavud Saicheua added Other listed companies that attracted investor interest at the road show were Prueksa Real Estate PCL, KrungThai Bank PCL, Electricity Generating PCL, Mcot PCL, PTT PCL, Bangkok Bank PCL, Thai Airways International PCL and Thai Military Bank PCL, all of which averaged 10 discussion rounds.
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