Time is still on the side of the Thai bull run
Timothy Teo says even after its gains, the Thai market is still cheap on a price-earnings basis compared to many other markets in the region
Timothy Teo runs a Thai equity fund that is one of the five best performing equity funds sold in Hong Kong. Indeed, four of the top five equity funds sold in Hong Kong are focused on Thai stocks, according to Lipper, a data firm.
The Amundi fund rose 19.7 per cent in the first three months of the year, and it more than doubled in value in the past three years.
And yet, the fund is experiencing cash outflows - it is down by about a quarter in size since the start of the year.
Teo says investors have been locking in their gains.
"It's a natural way of realising some profit. If you look at the one-year performance, the fund is up 38 per cent, and some of our investors have varying investment horizons" he says.
But the fall opens up the question of whether the Thai equities rally has run its course (the benchmark SET Index is close to passing its historic high) or whether there is more room to go. This is the nail-biting query that nags at every investor sitting on a hot asset that has performed well for a long time. Anyone in that situation would be tempted to cash in, but only at the risk of losing out on potentially bigger gains down the line.