Thais flock to foreign markets

Thais flock to foreign markets

Outward portfolio investment increased by almost 41% from January-October, a sign that local investors were flocking to other markets which yield higher returns but lower risks than the Thai markets.

Securities and Exchange Commission (SEC) data show portfolio investment abroad at the end of October amounted to US$35.2 billion, up $10.2 billion from $25 billion at the end of January.

Of the total $35.2 billion, $34.5 billion was invested through mutual funds, $176 million via provident funds, $198 million via property funds, $231 million via brokers, and the remainder was proprietary portfolios of brokers and asset management companies.

Deposits and certificates of deposits dominated the largest portion of 41.7%, other debt instruments at 18.8%, unit trusts at 18.4%, corporate, subordinated bond and convertible bonds at 12.6%, government bonds and Treasury bills at 4.47%, equities at 1.78% and others making up the rest. 

Hong Kong was the main investment destination for portfolio investment at 27.1% of the total foreign investment, followed by Macau at 13.1%, Turkey at 11.8%, China at 9.62%, Luxembourg at 8.39%, Brazil at 6.46%, Indonesia at 4.42%, the US at 4.13%, Switzerland at 2.31%, Singapore at 2.16% and others for the rest.

Charuphan Intararoong, the SEC's executive director of intermediaries supervision and development department, said the investment amount as of October represented 83% of the approval amount by the securities watchdog at $42.7 billion.

Mutual funds, which won the SEC's quota for offshore investment at $41.6 billion, put $34.7 billion into the markets, and $25.3 billion of the total investment was invested through foreign investment funds.

Viwat Techapoonpol, deputy managing director and head of technical analysis at Tisco Securities, said 2014 was a golden year for investment in risk assets and a volatile year for currencies on speculations of further monetary policy easing by major central banks in China, Japan and the European bloc.

Bank of Japan is expected to continue pumping more money into the system to stimulate economic growth, a policy that could lead to further pullback in the yen and bolster Japanese equity market. China is also expected to launch an economic stimulus to spur its slowing economy.

"European monetary policy will be eased more to boost economic in euro zone, so liquidity is expected to still flood the market in 2015, " Mr Viwat said.

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