Investors shun Thailand

[reader]

From Reuters / Bangkok Post

Growth weakens, protests heat up

SINGAPORE/HONG KONG: A selloff in the baht, underperforming stocks and pressure on the bond market reflect growing concern from global investors over political instability and the growth outlook in Southeast Asia's second-biggest economy, analysts and fund managers say.

Thailand suffered its deepest economic contraction in two decades last quarter and a long haul to recovery looms as the Covid-19 pandemic has hammered its mainstay tourism industry.

At the same time, the government is facing a student protest movement which is gathering momentum and disruption to its policy agenda by the surprise resignation of Finance Minister Predee Daochai on Tuesday, after less than a month in the job.

"I think no other country has these two or three problems going on at the same time, as if the Covid-19 situation isn't bad enough," said OCBC Bank economist Howie Lee.

Thailand's benchmark stock index is down 17% for the year, having suffered foreign outflows in every month till August - lagging a 5% gain in Asian markets.

"The only foreigners left in Thai equities really are the passive investors, the ETFs and the funds which track the index. The active managers are gone," said Jeep Chatikavanij, founder of the Ton Poh Fund which manages $150 million.

A global selloff in longer-dated government bonds has also hit Thailand slightly harder than elsewhere, as investors struggle to digest the big debt sales that are paying for governments' spending.

Widening corporate credit spreads, as investors demand a greater premium for lending to Thai firms, also shows creeping default risk, said BNP Paribas' head of Asean Economics, Arup Raha.

 

[Guest]

The "sell off" in the baht is hardly catastrophic.   Roughly 3% since the start of the crises, so very minor (first graph).  

For comparison, the Turkish Lira graph shows what a proper sell off looks like.   That's lost over 25%.    The third graph shows the Turkish Lira over 10 years.   That's what a weak currency can look like. 

I hope I never get to the day where I can't take a 3% drop in the value of my currencies, although if anyone is on the wrong end of exchange rate movements like the last graph, it's going to hurt. 

[firecat69]

Your math is not too good.  It is a 5% drop not 3% and close to 10% at the lower ( 29.6904) for the USD -Thai Baht.  I'm sure there are some people that might make a difference to them.  Just saying?  

[Guest]

Your reading and comprehension is not too good. 

I said ROUGHLY 3%, which means not a precise figure.   

Then I also said "since the start of the crisis".       The first case in Thailand was ~13th Jan.     The baht rate was 30.23 then.    It's 31.3 at the time I took the graph, so a 3.4% fall in the baht, which is ROUGHLY 3%.   Not bad since I didn't even use a calculator first time.  

Just saying ?

Of course, anyone can take the highest and lowest point in the graph, but the Reuters article is recent, so it makes no sense to compare 2 random points in the past.    

[10tazione]

Is the comparison Baht/Dollar relevant? Thailand is importing a lot more from China and Japan ...

[firecat69]

15 hours ago, z909 said:

Your reading and comprehension is not too good. 

I said ROUGHLY 3%, which means not a precise figure.   

Then I also said "since the start of the crisis".       The first case in Thailand was ~13th Jan.     The baht rate was 30.23 then.    It's 31.3 at the time I took the graph, so a 3.4% fall in the baht, which is ROUGHLY 3%.   Not bad since I didn't even use a calculator first time.  

Just saying ?

Of course, anyone can take the highest and lowest point in the graph, but the Reuters article is recent, so it makes no sense to compare 2 random points in the past.    

You could not be more wrong. I'm using your numbers from your posted graph . 33.08434  ,  31.30969 and 29.69094.  I don't know what kind of calculator you have but the first drop is 5% not 3 not 3.2 but 5%. The biggest drop is 10%.  Figures don't lie. Not sure what kind of world you live but to some people ( admittedly not many)  it is a concern if there currency i s worth 5% less for a trip and certainly 10% would be noticed by even more visitors depending on their own financial situation and probably the length of their trip.

Since I send money on a regular basis to Thailand via TransferWise , it has been noticed by me. You are lucky if it makes no difference to you!

[Guest]

2 hours ago, firecat69 said:

You could not be more wrong. I'm using your numbers from your posted graph . 33.08434  ,  31.30969 and 29.69094.  I don't know what kind of calculator you have but the first drop is 5% not 3 not 3.2 but 5%. The biggest drop is 10%.  Figures don't lie. Not sure what kind of world you live but to some people ( admittedly not many)  it is a concern if there currency i s worth 5% less for a trip and certainly 10% would be noticed by even more visitors depending on their own financial situation and probably the length of their trip.

Since I send money on a regular basis to Thailand via TransferWise , it has been noticed by me. You are lucky if it makes no difference to you!

If you had more talent and courtesy, you might just read and comprehend what I write before making a reply.   

I'm referring to exchange rates at 2 specific points in time.     Not maximum and minimum rates or any other random points you want to choose on the graph.

[firecat69]

You are laughable! Courtesy???  Your the one who said my reading  comprehension was bad that I had no talent or courtesy.  All I said were your posted figures are wrong and they are . Depending where you had to make the exchange on that , it could have cost anywhere from 0% if the price had not changed and up to 10% in the possible range listed on the chart . Really simple that anyone should be able to understand.

Also what seems like small change to ATM users vs. is seen completely differently if someone is transferring 10' s of thousands dollars . 

[Guest]

16 minutes ago, firecat69 said:

Your the one who said my reading  comprehension was bad.  

That was in response to your previous post stating my maths is bad.      Tit for tat.    I suppose you have already forgotten that.   Keep taking the medication.

 

Anyhow, from your previous daft arguments with Fountainhall, myself and others, I know how this is going to pan out.   

You will misinterpret whatever I write so you can easily respond with gratuitous abuse.     

 

 

 

[firecat69]

And you'll never reply to anything that I write unless it fits your beliefs. So Stalemate I guess. Your original post was the sell off is not catastrophic which of course is dependent on what the rate was at the time of the exchange . Your posted graph could have been anywhere from 0-10%.  I agree with you that if you fall somewhere in between 1-3% then it might night have any meaning to the overwhelming number of visitors exchanging money. In addition and even more important the amount you are exchanging in many ways is more important than the rate.

 

If you are exchanging , say $500 , 3% is $15 not likely to break anybody . But if you are moving $30,000 , just imagine how much that costs you on that graph even at 3% and really significant  at a 10% change. I was really not trying to pick a fight with you , but rather pointing out even 3% can be a lot of money for someone who is sending significant  $ to Thailand. ( Just ask me)

[Guest]

The 3% is certainly in the right ballpark for a pre-covid to current price change, which is what my post was about.     

And on the other hand, the max to min is somewhere near 10%, but both were rather short lives spikes, so one would have to be very quick and smart (or lucky) to get those rates.

 

I agree you don't want to throw away 3% by missing out on a good rate & I always take care to avoid poor rates and excessive fees.

Finally, exchange rates can move by an awful lot more than 3%.   With all the money printing going on in some countries, anything could happen in the next 5 years.    I personally prefer a little diversification to reduce such risks.