<<baht>>
I had mentioned that the entire funding for the construction of the house on koh samui had been converted into baht and sitting on deposit. My conversion price was between 41 ad 42 baht to the USD/HKD proxy. The beast is now at 38.odd, 7% gain + interest (low 2%). The koh samui house just got cheaper, if the construction cost does not get revised up.
Even if construction cost does rise, small matter, since the original (Asian Financial Crisis) land investment had yielded 2x cash plus building site. A win - win trade now, via currency, is turning into a win-win-win trade :0)
I think the baht will continue to rise once the inconsequential (big picture foolish) politics are behind us, and it will be behind us. and I will likely buy baht within the week.
The latest report from bank staff who visited the place says:
Wednesday 29 March 2006
* Current political uncertainties are likely to be resolved by mid-June
* Unrest in the South remains an issue of concern, but shows no signs of spreading out of area
* We remain a seller of USD/THB and TWD/THB
Politics has dominated the headlines on Thailand of late. In the most recent (March) EMFX Roadmap we addressed the likely impacts on the market. Our conclusions were:
* Thailand has rarely had political stability
* The currency is cheap
* Foreign ownership of Thai assets is low
* Domestics are heavily restricted in their ability to take capital offshore.
Along with what is still a reasonably positive macro backdrop, the THB should, on this basis, continue to outperform the TWD and the USD. We heard little on our visit to dissuade us from this conclusion.
POLITICS
Wednesday 29 March 2006
* Current political uncertainties are likely to be resolved by mid-June
* Unrest in the South remains an issue of concern, but shows no signs of spreading out of area
* We remain a seller of USD/THB and TWD/THB
Politics has dominated the headlines on Thailand of late. In the most recent (March) EMFX Roadmap we addressed the likely impacts on the market. Our conclusions were:
* Thailand has rarely had political stability
* The currency is cheap
* Foreign ownership of Thai assets is low
* Domestics are heavily restricted in their ability to take capital offshore.
Along with what is still a reasonably positive macro backdrop, the THB should, on this basis, continue to outperform the TWD and the USD. We heard little on our visit to dissuade us from this conclusion.
The domestic consensus is that a Thaksin-headed Thai-Rak-Thai party would comfortably win an election held tomorrow.
Thai-Rak-Thai's provincial support still looks to be far too strong for any Bangkok-based opposition to overwhelm. While it appears increasingly likely that the election will go ahead as planned on April 2, it remains unclear whether the election will produce an actionable result.
Further domestic instability, therefore, cannot be ruled out.
Our credit strategists expect to see some further rally in the 5yr CDS.
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