Outflows echo regional trend
Foreign fund outflows continue their exodus from the Stock Exchange of Thailand (SET), bringing year-to-date net outflows to 7.5 billion baht.
The trend is in line with offshore outflows seen in other emerging stock markets in the region such as the Philippines and Indonesia, said SET president Pakorn Peetathawatchai.
According to SET statistics, offshore fund inflows to the Thai bourse were 61.2 billion baht during the first seven months.
But foreign investors started to sell their holdings of Thai equities in August and September, with year-to-date net outflows registering 7.5 billion baht.
Earlier, the Federation of Thai Capital Market Organizations reported stock investor confidence for the three months through November dipped into neutral territory from bullish in the previous survey, dampened by worries about trade tensions, the country's sluggish economy and listed companies' profitability.
Sombat Narawuthichai, secretary-general of the Investment Analysts Association, said the majority of analysts and fund managers from 26 companies based in Thailand suggest the SET index will move sideways this quarter.
Positive factors supporting market sentiment are the lower US interest rate outlook and a 25-basis-point rate cut by the Bank of Thailand's Monetary Policy Committee, while the global economic slowdown and Sino-US trade dispute are identified as the main negative factors denting investor confidence, said Mr Sombat.
"Analysts and fund managers have not weighted domestic politics as a key factor influencing market sentiment in the final quarter," he said.
Analyst and fund managers have lowered their projections for earnings per share (EPS) growth among SET-listed companies to 3.3% from 7.9% previously. The average EPS of the SET index is forecast at 99.68 baht.
Yesterday, several banking equities saw a sell-off as concerns were fanned about banks' profits being affected by a move to lower their loan rates.
Deja Tulananda, executive chairman at Bangkok Bank, said the bank's interest income for the third quarter is expected to be affected by the impact from a cut in the minimum overdraft rate (MOR) and minimum retail rate (MRR).
Digital disruption is poised to lower revenue and profitability for banking, said KBank co-president Predee Daochai.
Local banks have passed on the central bank's 25-basis-point policy rate cut in August by slashing their MRR and MOR by 12.5-25 basis points.