Don’t write off Thailand, govt urges investors - Thailand
But political analysts not hopeful of an early resolution to crisis
By GREG LOWE
IN BANGKOK
THAILAND’S political turmoil is devastating the economy, but foreign investors should exploit opportunities, not write the country off, says the government.
Spokesman Nattawut Saikuar said the standoff between the People’s Alliance for Democracy and the government, and the state of emergency declared on Tuesday have damaged the economy and tarnished the kingdom’s image globally.
Investor confidence will return with a political resolution that should not involve beleaguered Prime Minister Samak Sundaravej stepping down or dissolving parliament, he said.
‘The Thai political situation right now is not supportive of either investment or tourism. We have to admit this fact,’ the spokesman said. ‘You might want to delay an investment, but don’t forget about us. Don’t write us off. This country has great opportunities for investors.’
The country has been roiled in political turmoil for months. It took a dramatic turn for the worse last week when thousands of supporters of the opposition alliance stormed the gates of the Government House that houses Prime Minister Samak’s office. Protests have since erupted across the country, leaving the government paralysed.
While Mr Nattawut could not give concrete examples of opportunities available to foreign investors, he said that they could capitalise on local commodities whose value has been driven down by the crisis.
‘Choosing to invest now to get the advantage later might be a wise move,’ he said.
According to him, Thais first need to invest in democracy and respect the rule of law to win back confidence in the economy.
Analysts support the claim that opportunities exist. Foreign investors in the Thai market remain bearish, with year-to-date overall net sales exceeding 100 billion baht (S$4.17 billion) - more than double those in the same period last year and almost triple the 37 billion baht in the same period in 2006.
The property market has been oversold, providing bottom-fishing opportunities for risk-taking investors, according to KGI Securities (Thailand). A number of value property plays have bombed since a state of emergency was declared, and a swift resolution of the political situation would lead to a rebound in these plays, the firm said.
‘In terms of valuation, property counters have been sold off too much as most of them will deliver outstanding earnings this year,’ KGI Securities property analyst Thaninee Satirareungchai told The Business Times. ‘Market sentiment is not good because of the political situation, but for investment, right now is a good time to buy.’ Asian Property Development, Quality Houses and Preuksa Real Estate are the soundest investments and are predicted to outperform, she said.
But political analysts are not optimistic that the political deadlock will resolve itself anytime soon. Yesterday, Mr Samak again refused to step down, but offered an unconventional compromise - a referendum for the public to choose between the opposition alliance and the government.
The alliance, however, has ridiculed the plan, saying Mr Samak will manipulate the vote, and has vowed to continue the protests until he resigns.
Source : Business Times - 05 Sept 2008
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