Barings’ Lim seeking out opportunities in Thailand

Barings’ SooHai Lim believes ongoing political unrest in Thailand could create attractive opportunities for investors.

Lim, who manages the $166.1m Association of South-East Asian Nations (Asean) Frontiers fund, says Thailand’s economy has grown resilient to the ongoing protests by anti-government campaigners since the coup in 2006, but suggests the escalating violence seen in the past two weeks could harm consumer confidence.

The fund is already overweight Thailand against the MSCI benchmark but Lim will use any sign of a sell off as an opportunity to add to his fund.

“Thailand now offers some interesting opportunities given the political uncertainty, and if the markets do sell off we might look to switch some of our existing holdings for some more interesting opportunities which get thrown up,” Lim says.

“If you look at the underlying economy it is actually quite strong. Property sales have been doing very well and the banks are showing very strong growth too.

“The question is whether this situation creates any doubt in consumer confidence and the economic outlook.

“At the moment it is contained in Bangkok but the city is the main contributor to GDP and the protests have affected tourism, which is very important.”

Longer term, Lim is also optimistic about Indonesia’s prospects, and has recently increased his weighting there. The country, which became a democracy in 2004 after 30 years of dictatorship, has a population of about 230 million and GDP per capita of $2,800 so offers vast scope for growth, says Lim.

 “Indonesia managed to grow 4.5% last year and will continue to be one of the better performing markets,” he adds. “In the aftermath of the Asian financial crisis in 1998 it was the worst performing market, but in the aftermath of the global financial crisis it was the best performer, with the MSCI Indonesia Index up over 100%.

“They didn’t just restructure the economy but also became more stable politically, and with the re-election of the president reforms will continue.

“It is also enjoying the secular rise of commodities as a huge exporter of coal, crude palm
oil and tin. With the huge rise of emerging economies, demand in these materials should increase and this will benefit Indonesia further.”