Foreigners leaving the SET : “No impact on thai share fundamentals”

Despite Thai exports being affected by the global financial crisis, the Bank of Thailand Assistant Governor for Financial Institutions Policy Group, Krirk Vanikkul, assured that liquidity among Thai financial institutions remains sound. However, he said the sharp decline in the equity market is due to foreign investors selling off their stocks and sending money home to shore up their economy but the matter has had no impact on Thai share fundamentals. (TOC)

It’s true : foreigners are selling. Eventhough it’s ABSOLUTLY not a new trend (look at the chart here).

But to say that it doesn’t “impact the thai shares fundamentals” is just another proof of how short sighted the thai authorities are.

We have a sell-off, because we are confronted to a freaking global financial crisis and a global economic downturn. So the thai companies are going to be impacted, so the thai stock market will continue to be impacted !

I love to hear thai officials talking about “fundamentals“. It reminds me McCain who was saying mid september : “The US economy is still fundamentally strong“. πŸ˜‰

And what about the master of deception, G.W.Bush, who said mid july : “The US economy is remarkably resilient and the US banking system is sound“. You bet Georgy. Sound it was…

The guy at the BOT thinks that if someone (foreign investors) doesn’t want to buy his stuff (thai shares) well mai pen rai… there is no effect. Another sucker will come into the shop and buy.

Thai companies are not insulated.

And if the xxx continues to hit the fan, they will suffer, and their shares will continue to go down.

Market laws.

Anyway. The BOT people should try to broaden their perspectives, that would prevent them to keep repeating the same stupid statements, over and over : this article “Global Recession, Country by Country” could be a very good start. πŸ˜‰

A striking summary of what’s going on in the world… that will directly impact Thailand.

14 Responses to “Foreigners leaving the SET : “No impact on thai share fundamentals””

  1. 1 James 5 November 2008 at 8:52 pm

    Sounds like a Bushism. lol

    I hate to sound like a pessimist but an Obama presidency means less imports into the states and Europe will more than likely become more protective as well, leaving Thailand to rely more on Asian markets for exports and investment capital. Do you think China will unleash the power of its reserves to help out the region?

  2. 2 ThaiCrisis 5 November 2008 at 9:08 pm

    I don’t know what all the fuss is about “Obama = trade barriers”.

    Several articles in the thai press are talking about this. This is weird.

    I don’t understand for a very simple reason : currently the main threat against international trade is not protectionism. But… real demand. It’s as simple as that.

    We have a freaking financial crisis, leading to a freaking economic slowdown, and possibly much worse : a full blown recession.

    Read the article on Mish’s website : IT HAS STARTED !

    So for that matters less real demand = less trade = less exports from Thailand.

    The US consummers are totally broken, indebted to death . The party is over. Like Mish wrote (long time ago) : times of frugality are coming.

    For that matter Thailand won’t be ably to “rely” like you say on Asian markets. Because asian markets will followthe global trend !

    Currently Thailand exports a lof of stuff to Asean and China (look at my chart).
    Part of this stuff is used… to process goods that are exported after to Europe, US etc.

    Everything is linked : therefore we are ALL going down.

    To believe the decoupling theory, that Asia would be “insulated”, like an oasis, a safe haven, is really dangerous in my opinion.

    As for the question of the famous chinese reserves, this is I think the most important question… because it is highly political.
    Here normal economic rationality doesn’t apply anymore. China is holding a weapon. A big one. Will they use it ? Nobody knows.

    Being a natural born pessimist I don’t give any credit to the chinese leaders… I’m not sure they are able (from an intellectual point of view) to take the right decisions in such special times. And anyway the bottom line is : what would be the “right decisions” ? πŸ˜‰

    On the other hand, I trust them to take irrational actions (using nationalism to divert social pressure for instance, the Taiwan issue etc.)

    People have forgotten, unfortunatly, but those “leaders” sent tanks to crush the protests in Beijing in 1989. 20 years ago. That’s not too long… We should remember. We HAVE TO REMEMBER.

    The names have changed… but the spirit remains exactly the same, fruit of dozen of years of ideological conditioning : save the Party.

    China is not your regular trade partner… It’s not even a partner… China will follow its own interest, AKA the Party’s interests… They don’t play in the same league : this is the fundamental mistake that people make.

    We will see how they handle the coming crisis… Because, they are going to need more than tanks…

  3. 3 angryirishman 5 November 2008 at 11:51 pm

    Sir, is it possible the that various Thai financial officials do not know the actual meanings of the words they use. To understand a word, one needs to know more than just how to spell it. It seems likely that these individuals actually do not know the meanings of their words. Thanks. AI

  4. 4 Bob 6 November 2008 at 12:04 am

    I have worked and lived a year in China and from personal experience, it truly is a different people and system. With the Shanghai Index down 70% and factories closing left and right, social unrest is just below the surface. Nationalism and having a common external enemy will be the only thing to keep the masses under control and safe the Party.
    China has 40 million more man than women, due to more boys being born from the one-child policy. That is excellent material for the military.
    Remember how easy and casual WWI and WWII started and back then there was only 2 billion people on the planet, now we are 6.7 billion.
    During a recession any minor conflict could easy escalate into a major war.
    Even the Thai-Cambodian border conflict could have gone out of hand if China went in and supported Cambodia. Just as an example. China took Tibet and got away with it. China will twist the truth anyway they like it. Indo China, sound Chinese, lets take it. China Sea, well it must belong to China, lets take all the countries around it.
    One morning they could march all the way to Singapore, maybe not tomorrow, but lot of things can change in 10 years.
    Lets see.

  5. 5 chinesethai 6 November 2008 at 5:21 am

    China doesn’t have that big capacity to substitute US and Europe as the vibrant export market since their consumers are still in. China FDI per capita is still below international standard.

  6. 6 ThaiCrisis 6 November 2008 at 6:36 am

    -> Bob. I share your views. China is indeed different. All the suckers who believe in unconditional love, civilized behaviour, eternal prosperity and fruitful partnership coming from the chinese leaders… have just birdshit in their eyes.

    Same when Chamberlain came back from Munich in 1938, showing the paper of the “peace agreement” to the crowd at the airport… and those people were so genuinely happy.

    History repeats itself over and over, for one very simple reason : human behaviour doesn’t change through history. Only fools and the false prophets pretend otherwise.

    We’ll always have the munich-suckers-people on one hand, ready and willing to be slaughtered, and on the other hand the guys who want to take your own plate “because it’s like that”.

    It’s eternal, classic. And it will always have the same consequences.

    Only the forms of those consequences are merely changing (Do I kill you with a sword, a sledgehammer or a missile ? Do I subjugate you by God’s will, with a soap opera on TV, or with an adjustable rate mortgage ?).

    Sorry, I’ve got bad and dark mood this morning. πŸ˜‰

    But really, I just can’t stand the frightening sino-beatitude of so many people toward China….

  7. 7 Bob 6 November 2008 at 8:07 am

    Totally agree TC.
    Peace in our time, 70 years after Chamberlain said those words could evaporate very fast.
    China really is a monster to watch out for. It is scary how controlled the Chinese media still are and simply from the lack of interest or language skills 1.3 billion Chinese are coached and controlled by Beijing. They are literary cut off from Western media and news.
    Historically every major military power has always found an urge to use that power. Nobody sits idle with a major army. China will be no exception.
    Russia will hammer China if they step out of line to the north or west (Kazakhstan) so when China needs more agriculture land Burma and Laos might look like easy targets. Thailand will, like Denmark during WWII, agree to administrative control.
    Only one question remains: When will it happen? In 5 years? 10 years?

  8. 8 Bedwyr 6 November 2008 at 8:16 am


    Sort of reminds you of the Thai-beatitude birdshit that many gullible farangs have in their eyes – doesnt it?

    In the same topic are comments about China and the menace at the Thai doorstep.

    Been saying it for months.


  9. 9 ThaiCrisis 6 November 2008 at 8:28 am

    We have to say that it has already happened !

    Burma, Lao, Cambodia are already “dominions” of China, convenient backyards for precious natural ressources (food, minerals, wood etc.).

    Of course, that creates some “collateral” dammages, but the ones that chinese leaders do not care about at all (the thugish murderers who rule Burma are going to stay a long time, a very long time in power… as long as they serve their masters… This is why the West can bark all it can… the burmese “generals” are smilling… they just don’t care: it’s the “fuckyou policy”.).

    Thailand will follow. Thailand is precious as a food producer (and China will need it). And here the risk is high of a collusion of opportunist interests between a “strong man” in Thailand and China…

    If it happens… we can say good bye to the so called thai democracy…

  10. 10 chinesethai 6 November 2008 at 9:13 am

    Guys, you don’t have any idea about China. That is insulting.

  11. 11 ThaiCrisis 6 November 2008 at 9:45 am

    I beg to disagree : notice that I speak only about the “chinese leaders”, the chinese state apparatus.

    I respect the chinese people. But not the chinese state apparatus.

    That’s totally different.

    And I would appreciate that you concede this : never mix the people with their government, particularily in countries without democracy.

  12. 12 chinesethai 6 November 2008 at 11:33 am

    It is also too convenient to draw such favourite conclusion that social unrest is just below the surface in China. That is exaggerating in a big way. True that the majority of the Chinese are poor and the rich-poor gap is widening. But they are quite self-sufficient and not debt-laden as in some countries. With thousands of factories closing, they could still go back to the farmland where they belong to. That’s why the Chinese leaders had not liberalized the rural land right until recently.

    I had held that popular belief until I traveled with my Chinese peasant friend and Ethnic Chinese Thai classmates in trips to countrysides in Anhui (one of the 4 poorest provinces), Sichuan, and Yunnan. Never confine yourself in big cities. China is not just Shanghai, Beijing, Kunming or Shenzhen.

    I think the CCP is right to have not 100% liberalize the press in China. That will destabilize the society when the majority are not ready.

    And Chinese people do not have that kind of selfish mindset as Bob is trying to badly portray.

    Is he aware that Thailand is going down the road of Republic of the Philippines. That’s more appalling!

  13. 13 fall 6 November 2008 at 1:11 pm

    Since when does Thai SET market EVER be “fundamental”?
    It’s always been “technical”…

  14. 14 ThaiCrisis 6 November 2008 at 1:19 pm

    Indeed Fall…. you’re perfectly right.
    The SET is a “special” market, a very special one. πŸ˜‰

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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