Analyst at UBS Wealth Management Research says Thai growth sustainable, not same as 1997 collapse

Thailand’s is a divided country, between democracy and the elite establishment, where one side has very little good thing to say about the other. And with Thailand PM Yingluck Shinawatra economic policy, the elite establishment, has been saying Thailand, is on the verge of a “Financial Collapse.” Carl Berrisford is an analyst for UBS CIO Wealth Management Research says: “ Thai equities are a juggernaut. The MSCI Thai Index has been on an inexorable multi-year rise. Four of the top five performing equities funds sold in Hong Kong are invested in Thai stocks, according to the information company Lipper. The strong rally in Thai equity markets over the past year has left many battle-scarred investment veterans scratching their heads. There is a sense of déjà vu about the strong capital inflows, rising financial leverage, and red-hot property markets that Thailand is witnessing. In 1997, it was precisely these trends that precipitated the massive devaluation of the baht, which then triggered the Asian financial crisis and left Thailand virtually bankrupt. So the question investors might ask is, is Thailand’s rally sustainable, or it is just undergoing another bubble that will eventually burst? I would argue the former. To get to that view, you need to appreciate the strength of investment trends under way in Thailand, and the powerfully positive effect of the recent stabilisation of the country’s political situation.Thailand is at the start of a new investment cycle that is expected to last at least until 2020. The most important driver is a government infrastructure spending programme to the tune of 1.9 trillion baht (HK$498 billion), with the peak of the spending outlays occurring in 2016-17.” (Source)

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