Written on Jan 7, 2013
Given the risk of profit-taking by LTF unitholders and the back of a yellow-shirt group, I expect the Thai market to be more volatile and recommend long-position investors locking in some profits starting today. Details are:
The yellow shirts will be rally later this month, maybe on Jan 21, to pressure the government to reject any negative ruling by the international court against Thailand on sovereignty of land around Preah Vihear Temple. It’s the ownership issue that we have battled with Cambodia for a long time. Nowadays, the group is expecting to gather up around 1 million signatures to submit to the Supreme Court president and military leaders. They will also file a lawsuit against the Foreign Ministry at the Criminal Court on Jan 14, accusing the ministry of disseminating false information by saying Thailand could lose the legal battle over ownership of the 4.6-suuare kilometer plot around the ancient Hindu temple.
On the other hand, there was whisper that the BOT would cut its rate by 25 bps on the meeting this Wednesday, currently at 2.75%. I personally don’t think so. Thailand is currently the only country in TIP that the real policy rate is negative (see pic1), and the BOT just made a surprise move late last year (see pic2). Consequently, there is no need to be hurry at the moment, albeit I anticipate another cut later this year.
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