The Thai stock market fell 2.35% today on foreign dumping of shares in the market.
You may ask so what. In fact, the Thai stock market is just a piddily little tee-niny market on the other side of the world. Okay, so what?
I was asking some clients today WTF happened and they said that US funds are dumping shares in Asia as they are facing redemptions. Funny isn’t it that I haven’t read much of anything about it in the MSM.
Well, I can see that some developing market funds and particularly some hedge funds are having trouble, especially with the huge losses with the bursting of bubble markets in China and India. They are just taking profit or relatively smaller losses on selling shares in markets elsewhere in Asia.
It’s a pity though because Southeast Asia has relatively strong fundamentals and cheap valuations. Okay, I did just lower my GDP growth forecast for Thailand for this year to 4.5%.
Going back to the redemptions issue, WTF? So, someone sent me an email about a WSJ article about some hedge fund not allowing redemptions. How can they do this?
http://online.wsj.com/article/SB121495893887021511.html
Wouldn’t denying unit holders the right to sell pretty much destroy confidence in the industry and speed up redemptions elsewhere, or scare the other funds to go ahead and dump investments in anticipation of imminent redemptions? How can this ever be justified beyond the age old “self preservation”, “every man for himself” and “it’s a dog-eat-dog world out there” philosophy? Oh besides that, did I ever mention that I think unregulated hedge funds are evil?
Where is the outrage? Where is the MSM in reporting this? Or, is it like reporting on a bank run or yelling “fire” in a cinema? If so, who is in the know and redeeming units?
I’ve always said that individual investors should rely on professional fund managers. But, in these cases, I’m starting to have doubts.
Why do I feel like someone is turning on the tap to our bloodbath?