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In Thailand, the government's drive to boost investment and growth after massive flooding decimated industry last year has helped to make it a favorite of stock investors. Thailand's economy shrank 10.7 percent in the last quarter of 2011 after the country's worst flooding in more than half a century disrupted operations at more than 1,000 factories, bringing the country's key automotive and computer parts industries close to a halt. But ever-resilient Thailand is bouncing back. The Asian Development Bank predicts Southeast Asia's second-biggest economy will grow 5.2 percent this year and 5 percent in 2013. Investors view positively measures Thailand has taken to increase domestic consumption, such as raising the daily minimum wage to 300 baht ($10) and offering rebates to first-time car buyers. "It's enabled households to have more disposable income and spend more," said Frederick Gibson, associate economist at Moody's Analytics. "I think the market has taken that as a positive sign, that households will have the ability to spend and that hopefully will have a positive impact on growth." Thailand's public debt load as a percent of the economy -- relatively low at 40 percent
-- means the government has the leeway to undertake expansionary fiscal policies, such as corporate tax cuts and other measures, said economist Eugene Leow of DBS Bank Ltd. in Singapore. The country also has mapped out major infrastructure projects, including flood prevention measures, in the next few years. "There are a lot of projects in the pipeline," Leow said. "All these projects will cushion any slowdown." So of the two stock markets, which might be the better bet for investors wanting to take the plunge into Southeast Asian equities? Herald van der Linde, head of equity strategy for Asia Pacific at HSBC, said he believes the Philippines stock market has become one of the most expensive in the world. Van der Linde especially likes Thai banks since demand for financial services is growing fast. Like elsewhere in Asia, Thais have begun to invest in their own local markets and investment products, breaking from the traditional way of stashing wealth into houses and land, van der Linde said. "Thailand, coming from a low base, is not that expensive yet. So if I had to put my money somewhere, I would put it in Thailand," he said.
[Associated
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