Sunday, July 21, 2013

Long Term Charts of the Thai Stock Market (SET) - July 2013 Update

This article is the bi-annual update of the long term charts of the SET Index, price earning ratio and price to book value posted on CNX Translation Forums.

Time for another bi-annual update of the long term charts of the SET (Stock Exchange of Thailand).

As usual, the first chart is the SET index between 1975 and now. This index now stands at about 1480, so a little higher than six month ago (1440), but this still results from a correction after the index reached 1600, which led it to fall as low as 1362, so sentiment may have changed.


The PER stands at 16.5, a level still high but better than the 18 we got 6 months ago, and since the SET is about at the small level, this is the result of better earnings. Such PER is still fairly high for the Thai stock market, so there may not be much value at this level.

The price to book value is about the same at 2.3 (vs 2.4) which, again, does not make the Thai stock market a bargain.

To conclude, I still consider the Thai stock market to be somewhat overvalued at an historical level, as well as compared to some other stocks markets around the world such as Europe, Russian, or Vietnam. The dividend yield is still around 3% which is about the same as what you get for a 15 Months fixed deposit. Interestingly, the 15-month deposit is 3%, 24- and 36-month deposit 2.625%, and 10-month 2.75%, which could imply banks may expect some economic troubles within 2 to 3 years.

Tuesday, July 2, 2013

Marc Faber July 2013 Market Commentary

Marc Faber has just published the July 2013 edition of his monthly market commentary (MMC) entitled "Only Losses can teach us about the Value of Assets" on

He explains that American economists has viewed consumption as the motor of economic growth since the early 20th century. This led to what he called the Affluenza, an All-Consuming Epidemic, accompanied by an unprecedented array of escalating imbalances:
  • ever-declining personal savings
  • a large fiscal and current account deficit
  • exploding government and consumer debts
  • a protracted shortfall in business fixed investment, employment and available real incomes.
The current fashionable move in the markets is to sell emerging markets and buy the US, and this investing philosophy is likely to disappoint even if the US stock market continues to outperform.

He stresses that the sell-off in late May/June has been extremely benign by historical standards and that far more downside volatility is likely to occur in the months ahead.

Marc Faber concludes with some wise words by Roy D. Chapin:

Be ready when opportunity comes...Luck is the time when preparation and opportunity meet.

There isn't any attachment to this month commentary.