Thai stocks rose nearly one percent on Friday in line with gains in Asian markets amid signs that China's growth is rebounding, while the Bank of Thailand raised its growth forecast for the country.
The Stock Exchange of Thailand Index rose 13.49 points or 0.95% to close at 1,434.44 up 1.6% from the previous Friday's close of 1,296.98. Turnover was 60.33 billion baht, with 35.86 billion shares traded.
The central bank said rising exports, domestic consumption and investment would lift Thai GDP this year by 4.9%, compared with a forecast of 4.6% in October.
Foreign investors were net buyers on Friday of 1.48 billion baht worth of Thai shares, local brokers bought 829.91 million and local institutions 908.91 million baht. Individual investors were net sellers of 3.22 billion.
For the month to date, foreign investors have bought 10.5 billion baht more in Thai shares than they have sold. They account for 20% of total turnover on the SET, which has averaged more than 50 billion baht since the start of the year, compared with about 32 billion in 2012.
World markets responded to upbeat news from China, while in Tokyo the Nikkei continued its surge as the yen weakened, improving prospects for exports.
China's economy grew 7.9% in the fourth quarter of 2012, up from 7.4% in the third quarter.
European stocks rose in early trading. Britain's FTSE 100 rose 0.3% to 6,150.63. Germany's DAX rose 0.2% to 7,748.77 and France's CAC-40 added 0.4% to 3,757.85.
A day after Standard and Poor's 500 index hit a five-year high, S&P 500 futures rose nearly 0.1% to 1,476, signalling more gains to come on Wall Street when trade opens in New York.
Japan's Nikkei 225 soared 2.9% to close at 10.913.30, the highest finish in nearly three years. The US dollar rose above 90 yen for the first time since June 2010 as expectations intensified that the Bank of Japan will take steps to ease credit next week.
Hong Kong's Hang Seng rose 1.1% to 23,601.78. South Korea's Kospi added 0.7% to 1,987.85. Australia's S&P/ASX 200 rose 0.3% to 4,771.20. The Shanghai Composite Index rose 1.4% to 2,317.07 while the smaller Shenzhen Composite gained 1.5% to 935.7. Benchmarks in Singapore, Taiwan and Indonesia rose. Malaysia and New Zealand fell.
In Bangkok, the SET50 index of blue chips ended at 959.56 points, up 9.72 points, with total trade value of 31.42 billion baht. The SETHD index of high-dividend shares rose 5.97 points to 1,245.42, with turnover of 9.7 billion baht. The Market for Alternative Investment gained 7.55 points to 445.33, with transaction value of 3.44 billion baht.
The five most active shares by value were Shin Corporation (INTUCH), rising 2 baht to 68.25; Bangkok Land, up 3 satang to 1.81 baht; ADVANC, up 7.50 baht to 206 on optimism about its aggressive 3G rollout plans; TRUE, up 45 satang to 5.60 baht; and ESSO, up 80 satang to 11.20 baht.
In the currency markets, the baht rose following a brief retreat after Finance Minister Kittiratt Na-Ranong said that exporters would face difficulties if it strengthened further.
The baht had its biggest weekly advance since December 2011, and government bonds rose, as global funds increased holdings of Thai assets that offer higher yields.
The baht was trading late Friday in Bangkok at 29.74/76 to the dollar, a 17-month high, compared with 29.76/79 on Thursday and 30.26/28 a week earlier. The currency appreciated 3.1% in 2012.
The recent gains in the baht reflect continued heavy buying by overseas investors of Thai stocks and bonds. On the Stock Exchange of Thailand, foreign funds have been net buyers so far this year of 10.5 billion baht worth of shares. They have also bought $2.6 billion more in government bonds than they sold this month, according to the Thai Bond Market Association.
The 10-year Thai government bond yields 3.7%, compared with 1.88% in the US and 0.75% in Japan.
"Funds are flowing into the whole of Asia, especially Southeast Asia, and Thailand is one of the most attractive places," said Tohru Nishihama, an economist at Dai-ichi Life Research Institute in Tokyo.
"It's possible to see smoothing operations to slow the pace of the appreciation, but [the Bank of Thailand] may not aggressively intervene to weaken the baht."
The central bank on Friday raised its growth forecast for this year, citing rising exports, domestic consumption and investment. Gross domestic product will increase 4.9% from the 4.6% predicted in October, assistant governor Paiboon Kittisrikangwan told a news conference in Bangkok.
Bank of Thailand Governor Prasarn Trairatvorakul said capital inflows into short-term securities were driving the currency higher.
"The central bank is closely watching the situation and has measures to deal with the issue if needed," he said.