Long Term Charts Thai Stock Market (Thai SET) January 2013

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Long Term Charts Thai Stock Market (Thai SET) January 2013

Postby onanong » 21 Jan 2013 16:57

6 months have gone since our last update, and its time again to update the long term charts of the Thai stock market.

The first chart is the SET index between 1975 and January 2013. Following other indices around the world, and despite my overvaluation view 6 months ago, the Thai stock market has continued its (unstoppable) rise in the last 6 months, and now stands at about 1440, a rise of about 40% since I started to become cautious.

Image

The PER is now around 18, mainly due to the stock market improvement. At 15, I started to be bearish, so at 18 it's extremely unusual for the Thai stock market. So either earnings have to go up substantially, either the stock market has to plunge, or a combination of the two.
Image

The price to book value slowly crept up to 2.4 which also starts to make Thai stocks overvalued, especially compared to what you get in other markets around the world. (European stocks have a P/B ratio around 1 now)
Image

To conclude, I believe the Thai stock market is relatively overvalued both historically, and compared to other stocks markets around the world. The dividend yield is now around 3% which is is that more than can get in a fixed deposit (Bangkok Bank now offers up to 2.65 % p.a for a 36 months fixed deposit), so why take the risk? There is also a lot of optimism around the world, which IMHO is not warranted, so I would not be surprised to see a massive correction in the Thai stock market within the next year.

The next update will be in 6 months (July 2013).
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Re: Long Term Charts Thai Stock Market (Thai SET) January 2013

Postby Bo Stenberg » 17 Feb 2013 09:09

[size=150]Great charts, many thanks. If I may be so bold, these came from where?

You may be "fighting the market" here. The world economy is just emerging from a serious financial contraction. Both PRC and the US seem to be in recovery mode, relative at least to where they were 2 years ago. Even Japan may be in a position to capitalize on Yen devaluation. The Eurozone panic seems to be receding. It is the ever-present pendulum--from excessive gloom to euphoria? We shall see.

The statistics are from the SET as a whole, I understand. Within the market are individual shares which are rather different from these percentages and ratios: there are still stocks selling for less than book value. This is very difficult to "fight" in an environment where money will be fleeing "safety" in search of higher rewards, i.e., risk. Markets run on greed and fear.

But these metrics are, of course, very good to have to hand. Historical norms and Return to Mean are essential, part of the equation. Many thanks for these data.
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Re: Long Term Charts Thai Stock Market (Thai SET) January 2013

Postby onanong » 29 Apr 2013 10:23

Sorry for the late reply. The data comes from http://www.set.or.th/en/market/market_statistics.html
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