The Thai stock market has been the best performing of the biggest Asian markets since May. The SET index has increased by more than 20 percent since its May low.
“Foreigners are starting to invest in Thai equities again on strong earnings and economic growth,” Supakorn Soontornkit, chief investment officer at MFC Asset Management Pcl, which oversees $7.5 billion, said in an interview in Bangkok with Bloomberg.
Khun Supakorn adds that the return of overseas investors will be the main factor driving share prices.
Overseas investors bought a net 8.1 billion baht ($252 million) of Thai shares in the past six trading sessions, the largest six-day purchase in almost four months, according to data compiled by Bloomberg. Foreigners sold 58.7 billion baht of domestic stocks in May, a record monthly selloff.
Thailand’s finance ministry said last week it expects the economy, Southeast Asia’s largest after Indonesia, to grow 8 percent in the second quarter, even after clashes between troops and anti-government protesters in April and May claimed 89 lives in the nation’s worst political violence in 18 years.
Investors should buy the “under-owned” stock markets after India led foreign investment into Asian emerging markets, according to Credit Suisse Group AG analysts led by Sakthi Siva.
“If we aggregate net foreign buying over the past three months, Thailand appears to be the most under-owned market,” followed by Taiwan and Korea, said Siva, the top-ranked strategist in Institutional Investor’s 2010 Asian poll.
Thailand’s consumer price annual inflation accelerated in July, the Commerce Ministry reported Monday. Consumer prices rose 3.4% in July on an annual basis, after increasing 3.3% in June. However, annual inflation was weaker than consensus forecast of 3.6%.
Stripping out volatile energy and food prices, core inflation came in at 1.2%, up from 1.1% in the prior month. This was also smaller than the expected 1.3% growth.
The Bank of Thailand had raised its interest rate in July for the first time in almost 2 years. The interest rate was increased by 25 basis points to 1.5% per annum from a record low.
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