Interview with Bruce Bickerstaff for The Manual of Ideas (May 2012)

In April 2012 I was approached to participate in an interview with John Mihaljevic, Managing Editor, of The Manual of Ideas. The Manual of Ideas is a respected member-only web site for value investors. I thought I might share that interview here, and hope you find it to be of interest.

Question: Tell us about your background and what motivated you to write a book about investing in Thailand?

My initial career involved the planning and management of parks, recreation and community facilities. Then I moved sideways into the tourism sector, working in different roles within both public and private sectors. I specialized in research and policy development, and later moved into management. I launched my own business next, but before I did that I studied entrepreneurship and small business management. My interest in investment matters was ignited at around this time and I gradually steered myself in that direction. Years later I finally got around to completing a financial planning course, and soon afterwards began my love affair with Thailand.

Upon moving here I visited many bookshops and spent a lot of time trying to find potentially useful sources of information about local investment opportunities. I found very little of value, and an abundance of misinformation ... stuff that was either out-of-date or simply wrong. There was contradictory information everywhere, even within official sources. I am no novice when it comes to digging up information, in fact I am kind of good at it, but this was pretty heavy going. I began making notes to keep track of the contacts I made, and the useful facts that I uncovered. This then became the nucleus of the book that emerged some two or three years later. Fortunately I attracted the interest of a potential publisher at an early stage, and this provided further motivation to press on with a project that just grew and grew.

Question: What advice would you give to Western investors who want to start investing in publicly traded companies in Thailand?

My advice is probably little different from what others might suggest for any inexperienced player moving into a new market. I would suggest that they head online and start exploring and reading widely ... to learn all they can about the market before narrowing their focus to individual stocks, and to be in no rush to begin trading.

I would advise them to start at the beginning and build an investment strategy suited to their own circumstances, and to be open to the possibility that direct share trading may not be the best investment vehicle for them. I often hear about expats exasperated by the low interest rates on offer from Thai banks, who suddenly decide to move their money into stocks. Often these are retirees with little or no stock-trading experience, who get all fired-up by some up-tempo journalism in the mainstream media. The Thai share market is no picnic and the outcome can be quite unfortunate.

The most economical option, in terms of brokerage fees, is to establish an account with a Thai stock-broking firm. Some will accommodate non-resident clients, others won't, so check their web sites for details. There are also a few international trading companies, like Charles Schwab for example, who allow clients to trade in Thai shares. Investors should then put together their own model portfolio and spend time online watching trading taking place to begin to get a feel for the market.

An alternative means of investing in Thai equities can be achieved by way of ETF's or other mutual funds, with an example being the iShares MSCI Thailand Investable Market Index Fund (THD).

Question: What are the best sources of information on companies traded on the Stock Exchange of Thailand?

One of the helpful features of Your Investment Guide to Thailand, especially the e-book version, is the many dozens of hyperlinks it contains. These allow readers to drill down into both general financial market information, as well as information specific to particular types of investments. I also provide various lists, for example of stock-brokers, fund managers, government agencies, research organizations, etc. Chapter Four of my book is devoted to a discussion of the challenges of sourcing investment-related information in Thailand. This chapter alone is a quite useful primer for anyone who is about to begin researching this market.

Potential investors might also benefit from scanning the web sites of the English-language Bangkok newspapers - The Nation and the Bangkok Post - for general economic and finance news. Global or regional investment information sources like Bloomberg, AsiaMoney and others regularly provide some good articles on Thailand-related policy developments, industry trends, and information about particular securities.

The Stock Exchange of Thailand produces a plethora of publications about trading, although most of these have yet to be made available in English. Investors will, however, find useful English-language content in the Settrade web site (, including charts and analyst reports on many stocks.

Also explore the web sites of the better Thai brokers, for example, that of Phatra Securities ( or Kim Eng Maybank ( One of the problems here though is that information is lacking on many of the smaller and even medium-sized listed companies. These companies are mainly seen as too risky for the mainstream Thai investor and too plaid for the speculators, and consequently the brokers have their analysts focus on the larger companies. But there are nevertheless some great prospects amongst the small-medium company stocks. Readers might also wish to visit sources like to obtain public disclosure information about particular companies.

Just in the decade that I've been here it's been interesting to see the burgeoning number of Thai magazines and web sites related to personal finance and investment. This reflects the growing interest and involvement in this field by middle-class Thais. Given that the number of Thais who hold shares is still very small (less than 10%), there's still a long way to go. This will eventually benefit foreign investors as gradually more and more of this information will become available in English, partly due to the growing numbers of retired expats living in Thailand.

Question: Which publicly traded companies in Thailand do you consider to be the highest-quality businesses?

John, that's a difficult one to answer as there are many good, even great, listed companies in Thailand across most (if not all) of the various industry sectors. To nominate a few would risk being seen to shun others of equivalent potential. Certainly though there are companies whose names regularly appear in relation to various international awards or "best of" lists, with PTT, Siam Cement and Thai Oil being just three such examples. Most of the Thai banks are also well worth looking at.

Each year the Stock Exchange of Thailand operates an awards program, with one of the categories being company performance (see for example,

Many Thai brokers provide model portfolios within their web sites, identifying those companies whom they see as offering the best potential at a given point in time (see for example,$file/Daily+Story_Strategy_2012_04_02_e_th.pdf)

Question: How would you describe the corporate governance practices of Thai public companies?

I think there is a perception that the Thai share market is somewhat prone to insider trading and share price manipulation. And as an observer certainly, at times it's difficult to discern any logical reason for the degree and extent of fluctuation that occurs in the price of individual shares. The fundamentals of the companies in question sometimes appear to be of little consequence in this regard.

As a result of these concerns, agencies like the Securities and Exchange Commission, the Stock Exchange of Thailand, and relevant professional bodies have been pushing hard for improvements in this area for many years now. And they are making progress through a combination of 'carrot and stick' initiatives. The 'silver lining' to the Asian Crisis of 1997 was that it served as a giant 'wake-up' call about the need greater caution and vigilance within Thailand's capital market. This is certainly a factor behind Thailand's relatively limited suffering during the GFC.

With respect to corporate governance, there is a hardcore group of companies who take the issue very seriously. One sees their names regularly appearing amongst the lists of finalists for Good Governance awards run by groups such as the Institute of Directors and the Stock Exchange of Thailand. See for example:

But there are still many Thai companies content to stand on the sidelines or merely 'talk the talk' about more closely conforming to established principles of good governance.

This paper provides a good background on this issue: "Corporate Governance in Thailand: What Has Been Done Since the 1997 Financial Crisis?", by Obeua S.Persons (

Corporate Governance Thailand ( identifies good corporate governance as being associated with characteristics like accountability, responsibility, equitable treatment, transparency, long-term vision, and ethics. The author of one paper I read recently has suggested that perhaps CG may not even be realistic or appropriate in Thailand in the same manner or to the same extent that it is in a western country. (See "Corporate Governance in Family-Run Businesses in Thailand", by Wali-ul-Maroof Matin at

But cultural issues are not the only potential hurdle to the widespread adoption of good CG practices. One reason why the Thai market might be more susceptible to shady practices, and to small share-holders getting shafted, is that many listed companies have only a small number of shareholders-often a few hundred people or less. In the Guide I mention some articles by a blogger by the name of MA Wind ( as it sounds like there are probably a lot of similarities with the Thai situation. Perhaps Thailand's rigorous defamation laws are behind the fact that not more is written about this issue locally.

Some further reading on this issue:

SEC's expectation of the role of directors, A speech by Mr Thirachai Phuvanatnaranubala

Review of Corporate Governance in Asia, Corporate Governance in Thailand (2004)

An Investigation of the Corporate Governance of Thai Listed Firms during the Period 2000-2008, by Roy Kouwenberg Mahidol University and Erasmus University Rotterdam (2010)

Question: Please educate us on the political and economic landscape of Thailand. How hospitable would you say the country is to foreign investors?

Many readers would recognize this famous Winston Churchill quote of circa 1939:

"I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is Russian national interest."

To a westerner, perhaps to anyone other than a Thai, the actions of the Thai government often appear similarly unfathomable. A major factor here is that it's such a fundamentally different culture. Whether it's Buddhism, the deeply entrenched patron-client system of social order, the nature of the education system, the emphasis on family and collective-being rather than individuality and independence ... the differences roll on.

The Thai Government no doubt sees itself as welcoming foreign investment, and it would certainly like others to see it that way. And to a certain extent it is ... where their commitment is limited to investment roadshows, openings and announcements of initiatives, glossy reports, and sweet words. But when it comes to making policy decisions that could upset the status quo - that might be seen as ceding sovereignty in any shape or form - or allowing competition with foreign businesses on a truly equal footing. Well, then things tend to stall or at least kick down a few gears.

With regards to individual investors, for example working expats and retirees, I would say the attitude was one of ambivalence. This is a point of contrast to, for example, Malaysia's approach to attracting cashed-up western retirees. I don't think the Thai government fully realizes the financial clout of this segment of the population, focusing instead on short-term tourists. On the other hand, playing host to thousands of (mainly) opinionated middle-aged to elderly western men is not all sweetness and light - there are some negatives in the mix.

The Thai government is under no illusion concerning the nature of public sentiment towards foreigners buying up assets, and to some extent fosters it. Indeed, one of its less endearing traits is a propensity to use foreigners as scapegoats to shift accountability and/or divert attention by appealing to populist feelings. There have been several recent examples of this occurring, and these are discussed in the Guide.

For large corporations considering the establishment of a factory or regional office in Thailand the Thai government goes through the motions of encouraging and welcoming investment. Again, though the reality is that despite various upbeat announcements and some tinkering around the edges, only glacial progress in being made in dismantling remaining substantial bureaucratic obstacles. Other important reforms that are needed to support locally-invested foreign companies call for a co-ordinated whole-of-government approach that thus far appears unachievable given the current system of public administration.

The sweet spot for foreign investors though is that Thailand is a country that has absorbed so many knocks but just keeps getting back up again. Shocks and events that would flatten any other economy for years are just bumps in the road here. More than thirty coups? Airport blockades? Tsunami ? Massive flooding? Violent civil unrest in the capital? Southern insurgency? Widespread corruption? Sure there has been plenty of sideways zig-zagging, but it seems to be mostly onwards and upwards. Look at the Stock Exchange now. Look at tourist visitation. And new transport infrastructure, shops and housing estate springing up everywhere.

What's more, if the Thais can somehow find political stability, capable and ethical leadership, and reform their existing sub-standard education system, then I suspect we "ain't seen nothing yet".

Question: What is the biggest mistake foreign investors tend to make in Thailand?

To quote myself from the first chapter of the 'Guide':

"The Thai investment environment is such that foreigners must exercise a higher level of due diligence than they would in their country of origin. What often happens though is the complete opposite."

There tends to be a combination of related big mistakes:

  1. Initial over-optimism (viewing the market through 'rose-colored glasses') often combined with a certain degree of gullibility
  2. Assuming that things function here the same way they do back home/not taking the time to see how things actually do work
  3. Failure to undertake adequate due diligence, generally, and
  4. Meeting and marrying the wrong sort of woman

And then of course all the usual sorts of mistakes that are made back home still apply in Thailand, things like:

  1. Making investment decisions in isolation from a consideration of an individual's (or company's) 'big picture', for e.g. ad hoc decision-making with no personal financial plan or strategy in place, often involving people without the necessary skills and experience to have a reasonable chance of success
  2. Trying to go from zero to 100 miles per hour in one step, e.g. stockmarket novice to day-trader in the space of days
  3. Failure to recognize, or to act on that recognition (until too late), when specialist advice and assistance is required

Bruce Bickerstaff is the author of 'Your Investment Guide to Thailand' which is available in both hard-copy and e-book format. Further details at