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Not So Fast on Those Thai Stocks

Thailand’s largest asset managers are holding cash and remaining skeptical on the mad rush into the benchmark SET Index, which jumped 20% from this year’s low.

As a seeming contrast to the exuberance, the country’s Social Security Office (SSO), which manages pensions for local workers, and Bangkok-based Kasikorn Asset Management Co., Ltd. have both recently made it clear that they thought investors were being overly optimistic about Thailand’s economic prospects and market conditions.

Win Phromphaet, the SSO’s head of investments, has basically said that Thai stocks are too expensive and have limited upside, so they will remain in cash until the next correction.

Additionally, according to Kasikorn’s website, “Price to earnings (P/E) ratio is currently standing at 13.12 times, or 12% higher than the 10-year average at 11.54 times, while Thai corporate earnings in 2015 are anticipated to reach 11%. Therefore, we believe the Thai stock index is currently in line with its fundamentals and not inexpensive as in the past.”

However, foreign investors feeling similarly have unloaded a net US$36 million of Thai stocks on Monday, day five of continuous net selling and the biggest shearing in two weeks. Prior to June 9, they had added US$250 million in stocks, but obviously have changed their outlook since.

H/T: Bloomberg