Stocks in Thailand are among the cheapest in Asia on a price-to-earnings basis, and the country's economy is shaping up to be the only one in the region to grow faster this year than it did in 2007.The WSJ notes that some analysts today favor energy plays such as PTT Exploration & Production, or they are looking at telecom sector firms such as Advanced Info Service. So why the reluctance to invest in Thailand? As Jotman readers can well imagine, the main factor keeping stock valuations low is political instability:
J.P. Morgan said in a research report this month that while stock prices hadn't necessarily fallen to distressed levels -- the main Stock Exchange of Thailand Index is down 23% this year -- they have slipped into "value territory."
HSBC Global Research this month said the political risks were so great it had reversed its view on Thailand, now recommending investors be "underweight" in that market instead of "overweight."It's not as if the economy is being poorly managed under PM Samak:
Thai Prime Minister Samak Sundaravej announced last week a $1.4 billion package of tax cuts and other measures to take the sting out of rising fuel prices and keep domestic consumption up. Finance Minister Surapong Suebwonglee expressed confidence that Thailand's inflation rate will stay within its forecast range of 6% to 7% this year.Bangkok Pundit has looked into the details and politics of the recent stimulus package. The prime minister's recent energy deal with Russia is another sign that the Samak government -- still guided by the businessman and former Prime Minister Thaksin -- is engaged with the economic realities of the times.