Pandemic leads to exodus of B95bn from Thai bourse

Pandemic leads to exodus of B95bn from Thai bourse

People wearing masks queue outside Bang Sue Grand Station as it opens walk-in first dose of the AstraZeneca vaccination scheme for elders, people with a minimum weight of 100 kg and pregnant women in Bangkok on July 22, 2021. (Reuters photo)
People wearing masks queue outside Bang Sue Grand Station as it opens walk-in first dose of the AstraZeneca vaccination scheme for elders, people with a minimum weight of 100 kg and pregnant women in Bangkok on July 22, 2021. (Reuters photo)

More than 95 billion baht in capital flowed out of the Thai stock market in the first seven months of the year, partly because of the worsening pandemic, sputtering attempts to revive foreign tourism, and possibly a second year of economic contraction.

The pandemic situation in Thailand has rapidly worsened, with daily new infections exceeding 20,000 cases yesterday.

Amid uncertainty during the pandemic, the SET Index in July dropped by 4.1% from the preceding month. The worsening pandemic has undermined plans to reopen to vaccinated tourists and led to an exodus of funds from the Thai bourse this year, said Pakorn Peetathawatchai, president of the Stock Exchange of Thailand (SET).

However, the baht depreciation should help Thai exports to improve in the second half this year, he said.

Mr Pakorn said at the end of last year, there were about US$400 million of capital inflows to the Thai stock market thanks to the country's good control of the pandemic.

Last year the SET also recorded a huge amount of capital outflows, totalling 263 billion baht. Total outflows were only 95.6 billion baht in the first seven months of 2021 and 17.7 billion in July despite the negative factors.

SET senior executive vice-president Soraphol Tulayasathien said even with the global pandemic, the IMF maintained its estimate of worldwide economic growth at 6% in 2021.

The IMF upgraded the growth rate forecasts for developed economies, but downgraded those of developing countries because they have less access to Covid vaccines and therefore a reduced chance to achieve herd immunity.

The downgrade and the prospect of a US interest rate increase are other factors that caused fund outflows, he said.

Mr Soraphol said the SET Index in July gained 5% from the end of 2020, eclipsing regional peers.

The SET's average daily trade for the first seven months stood at 96.4 billion baht.

Local investors were net buyers of 129 billion baht.

He said while some industries may enter a slump, those expected to outperform are agriculture and food, technology, property and construction, and the service sector.

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