Daniel Fineman had a deep background in the history, politics and culture of Thailand — all of which he needed to draw on as a financial analyst covering the country during the tumultuous and violent clashes that marked the country in 2010.

“Politics have played a very important role in shaping the financial markets in Thailand, and we have focused on that relationship,” says Fineman, who wrote a book on Thai politics and diplomacy and also holds the title of CFA.
He learned finance on the job in Bangkok. Prior to Credit Suisse, he spent five years as Jardine Fleming's Thailand and Southeast Asia strategist, and three years in Hong Kong and Singapore as JPMorgan's Asia Pacific regional strategist. Fineman was ranked the number two country analyst for Thailand in II’s poll in 1998. II ranked him the #3 Asia Pacific strategist in 2000.
He brought that experience to bear during the bloody and dramatic conflicts that have torn Thailand over the last year. In April 2010, the Red Shirt opposition, which possible links to ousted prime minister Thaksin Shinawatra, clashed with the Army in protests that left about 90 people dead and more than 1,300 injured. Yet despite that crisis, the Bangkok SET index rose 32.9 percent, the sharpest gain in the region.
But Fineman believed that despite the bloody clashes of 2010, the country’s once wobbly governance had improved enough to withstand the political shock. Corporate governance and financial regulatory structures were bolstered after the Asian financial crisis of 1998. And he believed they were sound enough to help the financial system make it through the crisis of last year.
Fineman remained confident in Thai companies, especially banks. The markets also were trading at a discount to other emerging markets and were primed for a comeback.
Thailand’s economy took a bigger hit than that of its neighbors during the recent global recession. And it has bounced back harder as well. The SET has gained 3.8 percent for this year to date, and Fineman expects gains to continue this year. While last year’s economic growth of 7.2 percent, the economy is expected to gain a solid 4 percent in 2012. The country is the world’s largest rice exporter, and the soaring value of food and other commodities gave Thailand’s agricultural exporters a boost. And with a PE of 12, Thai stocks remain reasonably priced by regional standards. It is about average for the region, and lower than the PE of other exchanges in India, Malaysia and Indonesia.
He doesn’t think the bull market has quite run its course.
“I think there are a number of quarters of expansion left. Towards the end of the year, interest rates will increase and that can be drag on multiples through the end of the year. But Thailand is still a pretty good story,” Fineman said.
He is particularly interested in large Thai banks. After the Asian financial crisis, Thai regulators wanted to make sure that banks had a diversified stream of revenue. So they allowed banks to supplement their lending with fee-based businesses such as insurance. “If anything, the commitment of Thai regulators to the idea of diversified bank revenue only grew after the financial crisis of 2008,” Fineman said. While regulators in the U.S. and Europe were responding to the financial crisis by imposing more limits on the activities of large banks--no proprietary trading, please--Thai authorities were moving in the opposite direction.
“Banks have not had much loan growth and they have had to live by their wits,” Fineman said.
Fineman also expects the country’s medical tourism industry to continue to do well. The growth of the overall tourism market--with a 7.5 percent increase in the number of visitors expected in 2011--should benefit Thai Airways, the country’s only airline, Fineman said.
Real estate is still scraping along the bottom in many parts of the world, but Fineman says property in Thailand remains relatively cheap. The boost in the number of Thai households is creating a structural increase in demand which should support prices, he says.
Utilities also might benefit over the course of this year. The country had planned to use nuclear power to meet a significant amount of its power generating needs. But the nuclear meltdown in Japan has raised new questions about the safety of nuclear power. That means nuclear power will play a smaller role than expected, creating new opportunities for Thailand’s existing utilitiies.