According to the fund manager, Thai equities offer good value compared with other parts of Asia, backed by one of the highest averaged dividend yields. Moreover, companies are in good shape, with strong cash flow and balance sheets.
Although the Thai economy is slowing, this was expected given past spending incentives and government spending.
After a technical recession in mid-2013, the third quarter saw slight expansion but since then spending decisions have been deferred because of the political conflict; the fourth quarter likely saw activity slow once again.
While personal consumption has fallen, reflecting a rise in household debts and a fall in confidence, areas such as tourism, agriculture and exports (despite China’s slowdown) testify to the diversity and the resilience of the economy.
Last year exports fell 0.2% (in US$ terms) but Aberdeen is forecasting a 5% rebound this year, with the weak baht helping.
Thailand’s finances generally look quite sound and it has not suffered any contagion effects to date, despite the battering that emerging markets as a whole have faced since the Federal Reserve’s tapering programme began last May.
Special promotion during February 17 – April 11, 2014
For every 100,000 baht invested in Aberdeen Growth Fund (ABG), Aberdeen Siam Leaders Fund (ABSL) and Aberdeen Small Cap Fund (ABSM) during this period, investors will get a free 200 baht- worth of units in the Aberdeen Cash Creation fund (ABCC). Conditions apply.
Aberdeen Growth Fund (ABG), Aberdeen Siam Leaders Fund (ABSL) and Aberdeen Small Cap
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