Thailand’s Tentative Tie-Up Traits
Thai capital markets continued their Indochina outreach with operations in Laos and Myanmar as the Asean cross-listing platform was also launched and the Bangkok exchange chief previewed a busy IPO backlog. The government in Vientiane plans a baht-denominated issue in the coming months to cover Mekong River power project costs after regulators made non-investment grade sovereigns eligible. Bilateral cooperation already extends to the stock-market with two listings there and to Myanmar’s dormant one, where the Japanese are also assisting with technology needs. At a donor meeting the World Bank agreed on debt arrears clearance as the Asian Development Bank focusing on financial sector modernization resumed lending after decades of absence. Mobile banking may be introduced and mortgage and commercial credit maturity restrictions are due to be lifted. Foreign phone companies have been invited to bid for new licenses as a previous minister responsible for the industry was accused of corruption. The central bank could get autonomy under so-called “stage two” transition changes contained in the aid conference document. The Asean exchanges link will first group 30 stocks in Malaysia and Singapore before Indonesia, the Philippines and Vietnam later join. The full integration deadline is 2015, and index providers have begun to offer regional benchmark products. The trio’s order systems are tied electronically and regulatory harmonization will follow in a later stage. For the Singapore bourse the initiative helped deflect attention from near-recession at home last year on poor construction and manufacturing data. The monetary authority imposed additional property demand measures in an effort to assuage bubble and inflation concerns as the latter cooled to the 2 percent range. Island firms have matched Chinese counterparts in steering FDI to fresh locations including Cambodia, which got $1.5 billion in 2012 beyond the usual garments pillar. The US President recently visited despite the suspension of multilateral support over land grabs and longstanding criticism of the regime’s human rights record.
Former Thai Prime Minister Abisit is under investigation for his alleged abuses during bloody clashes which closed the capital several years ago as domestic demand further improved in Q4 with record car sales on a solid current account surplus. Infrastructure builders and suppliers are to benefit from a $20 billion fixed investment program, with heavyweight Siam Cement a favorite. P/E ratios are at the core universe average, with dividend yields at 3.5 percent. Banks are available in New York through ADRs and ETFs, but double-digit annual jumps in consumer lending have drawn caution with local interest rates on hold and supervisors considering targeted curbs. As a fraction of GDP growth in the segment has been the fastest in the area since 2011, aided by the Yingluck Administration’s immediate household transfer and tax cut spree. Non-personal credit in contrast is sluggish despite post-flood reconstruction requests on soiled portfolio exposure from the disaster.
