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When there’s blood in the streets

When there’s blood in the streets

There is plenty of investment potential in turbulent political times, but don’t bother unless you have courage and time, says Katherine Azmeh.

May 26, 2010 2:07 by

Following nine weeks of anti-government protests that paralyzed parts of Bangkok and left an estimated 80 dead, financial analysts can’t help see a bright side to a very dark situation.

“It’s likely the market will rebound,” Reuters reported Wednesday.  “Technically, it is attractive and investors could look for bargains,” Phillip Securities said in a research note. “But market factors are mostly negative, so the rebound will be short-lived.” The point being: don’t look for gains yet, just bargains.

Strong fundamentals support Thailand’s economy. Here’s why analysts smell a bargain for the risk-ready investor:

  1. Exports, tourism, and domestic consumption are strong economic fundamentals, as are manufacturing and private investment.
  2. Southeast Asia’s second largest economy after Indonesia, Thailand’s surging exports led the economy last quarter to its fastest expansion pace in 15 years, Bloomberg reported.
  3. The manufacturing sector is expected to be resilient to political turmoil, analysts believe, with factories located outside the turbulent districts.
  4. Longer term outlooks will benefit from the fact that foreign investment in the country is expected to continue despite upheavals. “Foreigners decouple investment decisions from the riots, “contends Mark Mobius, of Templeton Asset Management  in Singapore.  Investors are “differentiating these events and saying OK, there are problems and there’ll be disruptions, but the country will come out of it and investing and trade will continue,” Mobius told Bloomberg.
  5. Thailand boasts one of Asia’s best performing currencies and a top stock market performer among Asia’s 10 biggest equity markets.
  6. A record of surging growth: Thailand’s economy grew at its fastest rate in 15 years in the first quarter of 2010, Reuters said.  GDP rose 12 percent in the first quarter 2010, versus the year earlier period.

Despite the political turbulence, Thailand might join the ranks of Iraq and Palestine as a place to invest, provided you’ve got nerve – and time.

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