Jailing 'negative' analysts - Amazing

[JJsushi]

gummigut said:

 

jjsushi, you are bandying things about and making correlations that really don't make a lot of sense. Talking about the six-month slide in the SET, you say to put it in perspective and that foreign investors are profit taking. Umm, six-month long slide of profit taking? That doesn't figure. Your point about capital flight from riskier markets though is right on the money.

 

Financial markets are all about correlations Mr. Gummi. Everything is relative. You guys are all harping about a 6mo slide in an emerging market stock market that is still up over 20% in a 1 year period and had a 120% gain in 2003,as if it is some testament to the place going down the tubes and foreign investors running for the hills for fear of financial corruption and unsavory practices. Did it ever occur to you astute local expats that the freaking SET was overbought/overheated/overvalued to begin with?

 

 

The fact is that global investors are nervous for many reasons and they are pulling their capital out of emerging economies in favor of more stable developed economies, such as the USA and EU.

 

 

The point is that jailing negative analysts (who back up their assertions) is not the sign of a mature capital market. Making it a riskier investment and thus capital flight (though how much can be argued considering analyst reports here aren't the most in depth to begin with).

 

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When in the world was Thailand ever considered a mature capital market? I remember as an analyst I worked on the first yankee bond the kingdom of Thailand offered. Investors thought of the place as a bananna republic then and they look at it as a bananna republic now. Foreign investors have never in my experience valued local analyst research, especially when it concerns equities. Add jailing analysts to a long list of other stupid things. I am much more concerned about how the Thai government and the justice system handles the legal grievances of multinational corportations that invest directly in the infrastructure and economy of Thailand

 

You would have to be a fool to have any faith in any local research concerning the Thai stock market. There is little information available to analyze these stocks, transparency is about as clear as a block of lead, conflicting interests abound in both the business and political world. Cronyism reigned pre baht bust as it still does today.

 

The SET is a three ring circus and any investor knows that. I invested a year ago made very nice profits and cashed out. I invested with a very short term horizon in mind not as a long term buy and hold. I invested because i saw alot of hot money being poured into the SET, not because I saw fundamental value in Thai corporations. I followed the money basically not some local analysts research report. If thailand starts jailing analysts i will still invest according to the money movement, as lonf as the proper risk premium is there.

[Guest]

The point is that jailing negative analysts (who back up their assertions) is not the sign of a mature capital market. Making it a riskier investment and thus capital flight

Thank you. I thought the point was obvious, but apparantly not.

 

To elaborate slightly, threatening analysts with jail is bad because it will obviously have a chilling effect on their willingness to issue negative reports. It also suggests that the government is trying to hide something, particularly in this case, where the threat to jail analysts followed reports that KTB's (a government controlled bank) NPLs had increased dramatically because of connected (politically driven) lending. Putting the government - particularly this government - in the position of evaluating the "factual accuracy" of an analyst's reports raises even more red flags.

[JJsushi]

Gadfly1 said:

The point is that jailing negative analysts (who back up their assertions) is not the sign of a mature capital market. Making it a riskier investment and thus capital flight

Thank you. I thought the point was obvious, but apparantly not.

 

To elaborate slightly, threatening analysts with jail is bad because it will obviously have a chilling effect on their willingness to issue negative reports. It also suggests that the government is trying to hide something, particularly in this case, where the threat to jail analysts followed reports that KTB's (a government controlled bank) NPLs had increased dramatically because of connected (politically driven) lending. Putting the government - particularly this government - in the position of evaluating the "factual accuracy" of an analyst's reports raises even more red flags.

 

 

Dude the PM himself has enormous conflicts of interests in regards to the financial markets. Issuing statements such as possibly jailing analysts is EXPECTED from a bananna republic such as Thailand.

[bibblies]

jjsushi said:

If thailand starts jailing analysts i will still invest according to the money movement, as lonf as the proper risk premium is there.

What if it does a 'Malaysia' circa the last crash and puts in controls that stop you getting your money out?

 

This is a boring hobby horse of yours (and notice that no one else on the thread seems to be buying it).

 

As for comparing this situation with the 'crooked' US analysts of the dot-com era, there's some difference:

1. The dot-com analysts were censored for knowingly giving false postives. I doubt Thaksin cares about that.

2. A government did not prevent individuals from giving their opinions.

3. Authorities eventually took appropriate and proper action to put things right. There's no suggestion of this here (in fact, there's the opposite).

 

Despite your attempted comparison with western markets, here's the beef:

 

SET Index at the start of 1990 - above 1100.

SET Index today - just above 600

 

There's nothing like that in the western world - the US, the UK, France, Germany, etc, are all still well UP in that timeframe. That suggests something about trust, market

transparency and investment.

 

You can try to chase the money and hope to get off at the right point before the whole thing crumbles but, imo, your money'd be safer in a casino. With the level of corruption and manipulation here, you've more hope.

[JJsushi]

bibblies said:

jjsushi said:

If thailand starts jailing analysts i will still invest according to the money movement, as lonf as the proper risk premium is there.

What if it does a 'Malaysia' circa the last crash and puts in controls that stop you getting your money out?

 

This is a boring hobby horse of yours (and notice that no one else on the thread seems to be buying it).

 

As for comparing this situation with the 'crooked' US analysts of the dot-com era, there's some difference:

1. The dot-com analysts were censored for knowingly giving false postives. I doubt Thaksin cares about that.

2. A government did not prevent individuals from giving their opinions.

3. Authorities eventually took appropriate and proper action to put things right. There's no suggestion of this here (in fact, there's the opposite).

 

Despite your attempted comparison with western markets, here's the beef:

 

SET Index at the start of 1990 - above 1100.

SET Index today - just above 600

 

There's nothing like that in the western world - the US, the UK, France, Germany, etc, are all still well UP in that timeframe. That suggests something about trust, market

transparency and investment.

 

You can try to chase the money and hope to get off at the right point before the whole thing crumbles but, imo, your money'd be safer in a casino. With the level of corruption and manipulation here, you've more hope.

 

Dude get your facts rights. The main comparison on the SET was to the freaking S&P Asia emerging market index. What benchmark would you use? Read my previous posts in response to all of these doom and gloomers crying about the 6mo slide in the SET.

So what's your point?

 

 

Thailand is a freaking 3 ring circus as far as it's stock market is concerned. Why should the government threat of jailing analysts be such a freaking shock? Are you really surprised?

 

What is your point anyway?

[bibblies]

"What's my point?"

 

I've got two:

1. Annoying when people go off topic, isn't it?

2. "Who cares? Stock analysts have about as much integrity as lawyers in my book. Jail them all" is crass, off topic and, it appears, no one else agrees with, or is interested in your detour.

 

The point of the topic (on which everyone else seems to agree) is that international money is deterred by lack of transparency and lack of fair, trustworthy regulation that is enforced across the board, applies to all and isn't changed on the whim of a corrupt few.

[JJsushi]

bibblies said:

"What's my point?"

 

I've got two:

1. Annoying when people go off topic, isn't it?

2. "Who cares? Stock analysts have about as much integrity as lawyers in my book. Jail them all" is crass, off topic and, it appears, no one else agrees with, or is interested in your detour.

 

The point of the topic (on which everyone else seems to agree) is that international money is deterred by lack of transparency and lack of fair, trustworthy regulation that is enforced across the board, applies to all and isn't changed on the whim of a corrupt few.

 

And yet the money still flows in.

 

 

BTW- my "detour" or off topic opinion got your frothing at the mouth. Did it not? Although you claim you don't care I guess you did enough to comment.

 

 

[gummigut]

JJsushi: You are going way over the top.

 

All we are saying is that the government's statements that it will jail negative analysts (irrespective if they have data to backup their viewpoint) makes Thailand a riskier environment. They've never stated this before. Thus if the environment is riskier, all things being equal. Capital will flow out.

 

Your belabored point of "And yet they money came back, it always comes back." Doesn't negate this. Actually you statement is nonsensical. Why? It's just like saying "It's going to rain, it always will". Duh of COURSE it's going to rain. Even in the Mogabi. Just got to wait long enough.

 

So the money will come back, it DOESN'T negate the fact that all things being equal, the government coming out with statements like this doesn't CALM the market and leads to the opposite reaction.

 

"Financial markets are all about correlations" You know that in the short term this is bullshit and it has as much to do with sentiment and rumour.

 

I know the drop in the SET was cited, but it all goes back to the point that this is about the government's announcement. When that happened the SET didn't bounce up. Talking about what it did six months ago or a year isn't really the point.

 

What I WAS picking on is your assertion that the SET performance in the past six months is due to profit taking. You and I know profit taking doesn't take the form of six freak'n months. Six hours, 2-days, okay. THAT'S what I was talking about.

 

"Did it ever occur to you astute local expats that the freaking SET was overbought/overheated/overvalued to begin with?"

 

Okay, how about DID IT EVER occur to you that maybe a disproportionate amount of money is flowing out of the SET versus other developed nations because large institional players are getting there ass handed to them with the likes of PTT and most recently the write down of the BTS? This leads to a higher risk profile than what may have been perceived a year ago, or even six months ago?

 

"The point is that jailing negative analysts (who back up their assertions) is not the sign of a mature capital market." Didn't say Thailand is a mature capital market. I should have been clearer. This is not the sign of a good capital market or one that is improving. Thailand has never said this before. Stating it makes it take a step back.

 

"You would have to be a fool to have any faith in any local research concerning the Thai stock market."

 

You would have to be a FOOL to have faith in ANY research about any stock market. It should be used as a datapoint. I feel there are some decent research reports, but they are very few and far between and hampered by lack of information.

 

"I invested a year ago made very nice profits and cashed out."

 

Well la tee da. I invested three months ago and my stocks are up by 12.2%. Guess what? I didn't follow hot money. I based it on fundamental research. My own. Instead of investing on money movement (chasing after money movement can get you burned, look at the IT bubble), I prefer more long term investments based on inherent fundamentals. You know what JJsushi, who cares what are investment strategies are.

 

The whole point is that stating something like jailing negative analysts (irrespective if they have data to back their assertions) leads to capital flight assuming all things remain the same.

 

Spare us all the spurious side crap about profit taking and correlation.

 

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[JJsushi]

gummigut said:

JJsushi: You are going way over the top.

 

 

I am known to do that.

 

 

Doesn't change the fact that the money will continue to flow into this Mickey Mouse house of cards called the Thai market. Talk all you want about transparency and foreign investors sentiment or respect. Get your panties in a bunch over how Thailand is perceived in the Intl markets. They are a Banana Republic and until they change their basic societal infracstructure, they will always be a perceived as bananna Republic. Jail all of the analysts and make Thaskin PM for life. . . no one will be surprised and the money will still come.

[gummigut]

"Doesn't change the fact that the money will continue to flow into this Mickey Mouse house of cards called the Thai market."

 

Yah yah, and it's going to rain in the desert too.

 

"Get your panties in a bunch over how Thailand is perceived in the Intl markets. They are a Banana Republic and until they change their basic societal infracstructure, they will always be a perceived as bananna Republic."

 

Ain't no one arguing this, so where is it coming from?

 

"Jail all of the analysts and make Thaskin PM for life. . . no one will be surprised and the money will still come."

 

Gee, your just not getting it. No one is arguing that money will not flow back (at some point in time) into the system. But doing something and stating something is standard practice are two separate things. Let me see if I can make this simpler. We all know the police target farangs littering. But if the police department issued a public bulletin that said so, this would be picked up by the media and broadcasted throughout the world publicising what type of yahoo stuff is going on over here. This would make people think about coming here and would hurt tourism (if even so slightly). Same thing about jailing analysts.

 

What's so hard to understand about that?

 

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