• 
• 

Published on September 5, 2007

It is a pity that the Bank of Thailand has decided not to exempt the new Thai exchange-traded fund (ETF) from capital controls, thereby preventing non-resident investors from investing in it. If the exemption had been granted, it is extremely unlikely that the fund would have attracted such a huge inflow of foreign funds that it would have driven up the value of the baht, the concern cited by the central bank.

Single-country ETFs, such as the one being launched in Thailand, are not used much by the large foreign institutional investors who might have the power to move currencies, since they are paid by their clients to pick individual stocks. They are largely used by retail investors and private bankers managing portfolios for high net-worth individuals as a simple tool to gain broad exposure to a market without the need for any in-depth knowledge. The most successful single country ETFs are those listed on the New York Stock Exchange (NYSE) because they allow investors to trade conveniently in US dollars at low commission rates without having to open accounts with brokers in different countries around the world or figure out complex settlement and foreign-exchange regulations of the type we have in Thailand. Where there are ETFs listed in local markets, such as in Hong Kong and Singapore, they tend to attract local investors far more than foreign institutions.

In any case, the overseas demand even for a NYSE-listed Thailand ETF is probably quite limited. Take the Thai Fund Inc, a NYSE-listed fund managed by Morgan Stanley, as an example. It has assets of only US$147 million (Bt5 billion) after 20 years in existence, compared to Barclays Global's NYSE-listed Brazilian ETF that has assets of over $2 billion and is one of several NYSE-listed Brazilian ETFs. Admittedly the Thai Fund is not a passively managed ETF of the type that is popular today but, as the only liquid Thai ETF listed in New York, it does give a fair indication of demand. We can be quite sure that an ETF listed in Bangkok would have far less appeal to foreign investors who use ETFs for the very reason that they don't want to trade directly in overseas markets.

Even though the demand would not have been great, I personally think it is a shame that the Bank of Thailand is not more supportive of the efforts of the Stock Exchange of Thailand and Thai fund managers working to develop a worthwhile new product for capital markets. With such an inauspicious beginning in the minds of foreign investors the fund is likely to remain off their radar screens permanently.

George Morgan

BANGKOK

---------------------------

Govt must put to rest doubts about GM crops

A controversy has arisen lately over the use of genetically modified organisms (GMO). The issue has created conflicts in society over the potential impact on the environment, health concerns, and possible economic benefits.

A recent study of the use of herbicide-tolerant maize in Thailand - conducted by Nicholas Kalaitzandonakes of the University of Missouri, Pasu Suntornpithug, a research fellow, and Sutonya Thongrag, an associated professor at Prince of Songkhla University's Economics Department - said that Thai farmers place a high value on biotech maize, which is produced to be resistant to herbicides and has been adopted by export-oriented countries such as the US, Canada, Argentina, and Brazil. The report also claims Thai farmers would benefit with a higher yield and lower production costs.

Such reports have been used to persuade the government to allow field trials of GM seeds. However, they are giving a distorted viewpoint to Thai people, especially local farmers who are resource-poor producers living and farming in marginal environments with few alternative cash crops, and most of them are not highly educated.

It's so sad that there is no clear indication on the safety of consuming GM food, its acceptability in the EU, the necessity to raise GM production standards, and the possible impact this could have on the environment.

The government should ensure that any field trial is done according to rigid safety standards and highly controlled, and make absolutely certain humans will not be harmed by consuming what biotechnology produces. This is more important than figures showing potential economic gains, and competitive advantages that may arise from the adoption of GMOs. The planting of GM crops is now done in government laboratories or in restricted areas for papaya, chillies, and eggplants, while imports of GM soybeans and maize for animal feedstock and other commercial uses are legal.

I will never call for an end to this genetic experiment on the grounds that GMO are uncontrollable or might pose a risk to human health and the environment. But the government must investigate and take a close look at the issue and not kow-tow to external pressure from US seed firms and the US, which is the world's leading producer of biotech crops.

Meanwhile, scientists and bio-researchers have to provide reasonable grounds for our society to accept GM foods as safe for consumption, and for the environment. Varying green activists and scientists have argued that it could lead to a more secure future for food, and on the other hand that it could produce new toxins and allergens that would affect the health of consumers. At the same time, public participation is also important in order to establish a balance.

Rangsan Srirat

BANGKOK

---------------------------

EU's presence at elections would boost credibility

I agree with Gothom Arya, a former election commissioner, that we should reconsider our out-of-hand rejection of the European Union's bid to observe our upcoming election. As the EU noted, such a mission "does not interfere in the electoral process ... and has no authority to change, improve or correct any shortcomings to request changes during the electoral process ...[it] has only the mandate to collect and verify information concerning the election process, to analyse the observations, and then, after the elections, to publish its findings".

Our next election is a go-for-broke one for both the government and the Thaksin forces, also known as the People Power Party, with very strong incentives to misuse state power, buy votes and engage in other unethical activities. Having a neutral, highly credible body such as the EU observe what's going on will put a brake on some of the worst abuses and, if approved, add immense credibility to the election results and thus to our credibility as a democracy.

Invite the EU mission in, under the terms of reference outlined above.

Burin Kantabutra

BANGKOK

---------------------------

No need to indicate marital status on driver's

Re: "'Miss' proposed for transsexuals, transvestites", News, August 28.

It's nice that transgender individuals may soon be able to choose their title. Now can we go one step further and allow women the same right?

Recently the driver's licence bureau randomly changed my name from what was legally stated on the certificate of domicile from the Immigration Bureau. My decades-long title of "Ms" was suddenly changed to "Mrs".

I do not want my title to be based on my marital status, which is a privilege that men certainly enjoy.

The driver's licence bureau refused and said that it was not within their computer capabilities and besides, I was asked, "Do you want people to think you're unmarried?"

Horrors!

My marital status is nobody's business. The act of legally forcing women to change their titles (and their last names) is blatantly sexist and allows for discrimination based on whether you're perceived as sexually available, or not.

Christy K Sweet

BANGKOK

Send us your views in an instant

E-mail your opinion, with 'Letters to

the Editor' in the subject box, to:

letters@nationgroup.com