Mark Mobius is bullish on Thai investments

Speaking yesterday at a seminar in Bangkok entitled "The Thai Economy: If It Can Recover", Mobius said the dividend yield of Thai shares averaged 5.5 per cent, well above that of other emerging markets, which are about 4 per cent.

As well, the baht is 14-per-cent undervalued against the US dollar.

Mobius is president of the Templeton Emerging Markets Fund, with a total size of US$20 billion (Bt708 billion), 10 per cent of which has been invested in Thai equities. The fund, managed by Mobius, had assets of $391.1 billion under management as of March 31, up from $371.6 billion in February but down considerably from $591.1 billion in March 2008.

PTT and Siam Commercial Bank are among Thai shares accumulated by the fund, he said.

The fund has snapped up Thai bank and energy stocks while avoiding the tourism sector, due to its low trading liquidity.

His fund has bought into Thai banks because they have not felt any pinch from the US sub-prime debacle, plus their financial position has remained strong since recovering from the Kingdom's financial meltdown in 1997.

Mobius said the recent political chaos in Thailand could happen anywhere and was not an issue for him.

"Thailand's overall politics remain peaceful," he said.

Regarding Thailand's gross domestic product, he said it would rebound from a contraction of 3-4 per cent this year to growth of 2-3 per cent next year.

Thailand is a top investment destination of the Templeton Emerging Markets Fund.Apart from shares in emerging markets, Mobius is bullish on commodities. Commodity prices are increasing, but their peaks will not reach recent record highs.

"The US economy will recover faster than many expect. Recessions don't last long," he said.

Given the US government's massive cash-injection plan for addressing its economic problems, a future challenge will be halting such a huge money supply, he said.