The Thai government's failure to resolve the ongoing bloody
political crisis has put Thailand's standing as an up-and-coming
major exchange traded fund (
) investment destination into question. Despite all political
conflicts, however, businesses outside of the conflict zone say
they are relatively unfazed.
The government recently rejected a cease-fire plan and said that
they won't negotiate until protesters, who want new elections to
oust the government that they believe only serves the elites, agree
report Patrick Barta and Alex Frangos for
The Wall Street Journal
. The tensions in Thailand stem from its sizable rural underclass
and the urban elites who are perceived to control the country's
economic and political institutions.
The social unrest has forced some foreign companies to consider
moving employees to hotels near airports so that they may escape
the country quickly and other investors are shifting their foreign
direct investment to other countries altogether. Shane Oliver, head
of investment strategy at AMP Capital Investors in Sydney, remarks
that he can "find other countries that are more attractive without
having to worry about the political situation." [
Is Thailand ETF Worth the Risk?
Thailand may be still able to rebound quickly if a resolution is
- The country hosts a far better infrastructure for
manufacturing than most of its neighbors, it has survived
previous political upheavals and Thailand may still squeeze out
growth of 4% to 5% this year on strong consumer spending and
exports from areas outside of the conflict zone.
- Foreign manufacturing plants outside of Bangkok say business
is going on as normal, and their investment plans haven't been
writes Khettiya Jittapong for Reuters
. But risk analysts caution that manufacturers will start to sing
a different tune and prepare for contingency plans if the crisis
China ETFs Face Challenges.
- Thailand is a major production base for global carmakers and
electronics manufacturers. Thai domestic auto sales in April rose
44% in the eight consecutive months of growth. Sales are
projected to rise in May as an improving economy boosted domestic
The Thailand ETF may be on the riskier side right now, but there
are some funds available that have lesser exposure to the
politically troubled country, listed below. [
What's In That ETF You're Buying?
For more information on Thailand, visit our
iShares MSCI Thailand Invest Mkt Index (NYSEArca:
iShares MSCI All-Country Asia ex-Japan (NYSEArca:
SPDR S&P Emerging Asia Pacific (NYSEArca:
Max Chen contributed to this article.