It may be time to buy Thai equities - provided you are prepared to wait until the millennium for the payback, Goldman Sachs says The country, which has done to death many predictions of imminent recovery made over the past year, had made sufficient strides towards reform for investors to start moving back in, the US investment bank said.
'We are raising our weighting on Thailand to market weight from underweight in our regional portfolio,' Goldman said in its latest strategy update.
'We believe there is now a firm foundation on which to base a two to three-year recovery in the finance system and economy, versus a five to seven-year recovery if Thailand dragged out reforms.' The bank cited action on seven fronts as underpinning its change of stance.
Fifty-six of the 58 suspended finance companies had been closed for good, and there were signs that the finance system and corporate sector were starting to be recapitalised, it said.
There was a more responsive attitude toward reform and IMF advice from the Bank of Thailand officials and corporate heads, and a possibility that a private 'bad bank' may be established with foreign assistance.
Asset sales had started and, finally, there was increased interest in the country from institutional investors and foreign direct investors, it said.
