Thai Stocks Get Another Look After Protests

BANGKOK (TheStreet) -- Thai stocks are a "buy" as political unrest temporarily dragged down prices, says Vijchu Chantatab, manager of the Thai Capital Fund(TF).

The closed-end fund has risen 11.9% in the past month, beating the Bangkok SET Index's 10.6% gain. The Thai Capital Fund has more than doubled the index's 3.3% increase over three months. Over one year, the fund has climbed 34%, trailing the Bangkok SET Index's 48% advance.

Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks and views on the market in a five-question format.

There has been a great deal of turmoil in Thailand. What is the political situation now?

Chantatab: The situation right now is stable compared to what it was in the spring. And I think it will remain that way for the next six to 12 months until we have a new election next year. The mob protests certainly affected business at the end of March until the middle of May. At that time, shopping, manufacturing and tourism were all interrupted.

Despite the riots, your fund has done well this year.

Chantatab: Most of the time when we have political issues in Thailand, it's short term. And by now, most foreign investors, and even local investors, see political uncertainty as an opportunity to buy. And even with the political unrest, I still think that Thai GDP will come in around 3%.

Now about 20% of your portfolio is in energy.

Chantatab: Actually, we are underweight the energy sector because in the Thai market, energy stocks are about 35%, almost 40%, of the benchmark. We are underweight the energy sector because we saw something wrong with the trading in the underlying commodity. We did not have faith in global oil prices.

Now you also have a big stake in the banking sector.

Chantatab: Because right now the situation in Thailand is low interest rates. And banks do well in low interest-rate environments because it's easy to lend money to people. Also Thai banks are much better compared to the rest of the world because the banking sector generally was not involved in any property bubble.

What is Thailand's relationship with China and the U.S.?

Chantatab: The relationship is quite good with China. Thailand trades a lot with the China. We shifted our export sector from the U.S. and euro-zone after the crisis in 2006 and 2007 in favor of China and Middle East, so the relationship with China has really improved.