SET foresees foreign return
Strong fundamentals, forex gain are lures
Despite heavy equity sell-offs earlier this week, foreign funds are expected to return to invest in Thailand's stock market, buoyed by the strong fundamentals of listed companies and return on investment as well as foreign exchange gain, says the Stock Exchange of Thailand (SET).
The SET index can still attract foreign fund inflows as it is the most liquid in Southeast Asia, while listed firms have more sustainable growth than in the past, said SET president Pakorn Peetathawatchai.
Thailand's economy still has good growth potential and the strong fundamentals of SET-listed firms can generate greater profit, said Mr Pakorn.
Some 30% of foreign funds have invested in passive assets and track equity investment based on the MSCI benchmark indices, he said.
SET-listed firms listed on the MSCI Thailand index total 41 companies, with nine on the MSCI ESG.
Foreign exchange gain is another incentive, said Mr Pakorn.
Foreign investors earned capital gains from the SET of around 1% in baht terms, but gains from foreign exchange were 7-8%, for a total of around 9%, he said.
The proportion of foreign investors investing in Thailand's bourse has increased to 30% from 28-29% registered in 2019.
Foreign investors were net buyers of Thai shares worth 4 billion baht on a year-to-date basis as of Jan 8, according to SET data.
Pakorn: Strong fundamentals among listed firms. NO PHOTO CREDIT
The recent plunge in the SET index came from external global impacts on market sentiment, said Mr Pakorn.
The SET index opened the week with a 1.66% decline on Monday, followed by a 1.1% recovery on Tuesday before seeing another sell-off to end Wednesday with a 1.64% plunge.
"We cannot control external risk factors, but we can invest based on selective assets with limited exposure [to risk factors] and a potential to generate higher returns amid growing uncertainties," he said.
Sectors that have limited exposure to flaring geopolitical conflicts and offer high dividends are good choices in such an environment, said Mr Pakorn.
The SET has an average dividend payment of 3.26% compared with 1.3% offered by the 10-year yield on a government bond.