Just a little more than a decade ago, most investors wouldn't
put a dime in this emerging country, even if they were using
someone else's money.
But plenty can change in a short amount of time, and today the
story is vastly different.
Now this country's Finance Ministry has raised itsGDP outlook three
times in the past six months. Its once beleagueredcurrency is
sitting at a 13-year high. And even huge multi-national companies
have taken notice, plowing billions of investment dollars into this
I've done my own research, and I am bullish enough to predict this
"sleeper"economy to be one of the biggest winners for 2011. You
see, a lot is going right for Thailand, and it looks to be
following in the same footsteps as China, Russia, India, and
Economic growth that makes most nations jealous
I first took a shine to Thailand this past July. The European debt
crisis was in full swing at the time, sending the Dow into a 1,200
point freefall during the prior two months. Riskier emerging market
stocks are typically hit even harder during these periods of
But Thailand held its ground. In fact, it swam against the current
and moved higher. It was a good sign the Stock Exchange of Thailand
wasn't marching in lockstep with the New York Stock Exchange.
The country wasn't immune to the global recession. But after a mild
slump, it has come roaring back. In fact,GDP kicked into overdrive
and expanded +12% during the second quarter, the strongest growth
rate in 15 years. And unlike other emerging market neighbors, there
is more than one growth driver involved.
Rising industrial production, booming agricultural and electrical
exports, increased domestic consumption and a thriving tourist
trade have all played a role. Today, this $270 billioneconomy has
grown to become the second-largest in Southeast Asia (behind
Indonesia). Multi-national companies have even taken notice,
showering the country with billions in foreign direct investment.
Exporters have also been diversifying away from Europe toward
healthier trading partners like Malaysia and Indonesia. And the
China-ASEAN Free Trade Agreement (which axed tariffs on 90% of
goods entering the Chinese marketplace) has made it easier for
Thailand's producers to get their goods in the hands of voracious
Of course, you can't mention Thailand without acknowledging the
sharp and sudden
of Thailand's baht that sparked the volatile Asiancurrency crisis
of 1997. More than a decade later, many of the nation's stocks are
still feeling the lingering effects of the hangover.
I should also note that Thailand also has been plagued by political
unrest. Earlier this year, the ouster of a former populist leader
provoked fierce anti-government demonstrations. Needless to say,
headlines involving riot gear and military crackdowns don't inspire
Fortunately, things have quieted down and it's back to business as
usual. For example, Thailand's CentralWorld shopping mall, damaged
during the protests, reopened last month and is now attracting more
than 100,000 customers daily.
Meanwhile, buoyant prices for agricultural commodities like rice
have boosted farm income and spurred domestic consumption. In fact,
consumer confidence has just rebounded to a 28-month high.
Accommodative monetary policies and $40 billion in investment in
railways and other infrastructure projects haven't hurt either. All
of these factors explain why Thailand's Finance Ministry has raised
itsGDP outlook so quickly.
Action to Take -->
More than a decade after thecurrency crisis, Thailand is back. At
this point, the Thai Capital Fund (NYSE:
) looks to be the bestoption for stateside investors. The
holds a cherry-picked portfolio of Thailand's top companies, and
it's the top performer in its class in the past year.
So far in 2010 the fund is up +64%. That's a massive run, but I'm
expecting good things ahead. Thailand's growth story is not limited
to a single year.
The best part of this: The fund is trading at a 12% discount to its
net asset value
. That means you're buying $1 worth of Thailand's best and most
dynamic companies (without leaving the U.S. markets) for $0.88.
That discount helps to make an undoubtedly aggressive play much
-- Nathan Slaughter
Nathan Slaughter's previous experience includes tenures at
AXA/Equitable Advisors and Morgan Keegan. In addition, he's
earned Series 6, 7, 63, & 65 certifications. Read more...
Disclosure: Neither Nathan Slaughter nor StreetAuthority, LLC
hold positions in any securities mentioned in this article.
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