Thai stocks booming, investors still careful

- It is, perhaps, the attention to detail that sets Falcon Hill apart from other luxury properties in Thailand.

Kim Falcon Ravn, Denmark
Managing Director

Visit Falcon Hill, Hua-Hin

Despite the 20% growth in Thai stocks since mid-June, that GDP forecast now says around 7% increase, and the Thai Board of Investment report increase in applications, it is still much too early to forget about the recent problems.

Phatra Securities stated in a recent report: "Over the long term, we believe that Thailand's unsettled politics will keep GDP growth below potential - estimated at about 6 per cent a year. Thailand's many political upheavals during the past five years cannot be ignored and we believe that this has led investors to raise the country's risk premium"

Also foreign direct investment seems to be cautious. Between 2005 and 2008 it was up 550% in Vietnam, 80% in Malaysia, and 11.8% in Indonesia. But for Thailand it was only a 6.5% increase.

Phatra's research also indicates that the Thai private investment has averaged only 15% over the past 10 years, 7 percentage points below its 40-year average of 22%. Also public investment is below the average.

Winning back the heart of investors will not be easy, with recent pictures of street violence and burning shopping malls are still fresh in memory.

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User comments
By: Reg373	13 Nov 10 11:18 ICT
More investment may come to Thailand as the US dollar sees more devaluation. Obama has failed to get G20 to make any policy on the Yuan. -- a nice satellite view of Thailand; Balkingpoints / www
By: sfm	29 May 11 18:22 ICT
Always a dramatic market.
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