Fund inflows into Thailand's stock market are expected to continue increasing given greater perceived stability of the new coalition government and reduced trade friction, with year-to-date inflows registering 5.36 billion baht, says the Stock Exchange of Thailand (SET).
The proportion of foreign investors' trading value continued to increase from 36% at the end of last year to an average of 42% as of May, said SET senior executive vice-president Soraphol Tulayasathien.
The upsurge is attributed to reduced domestic political friction after Gen Prayut Chan-o-cha retained his premiership, an increased weighting of Thai equities by the MSCI Emerging Markets index, and the outlook of lower global interest rates revving up economic growth momentum, said Mr Soraphol.
The most attractive markets for fund inflows during the first five months of 2019 were India (US$10 billion), Indonesia ($4.09 billion) and Taiwan ($2.39 billion), while the two regional stock markets recording net sales between January and May were Malaysia ($1.16 billion) and Thailand ($187 million), according to the SET.
Foreign investors have returned to become net buyers of Thai equities for two straight months, from May to June, with a current net buying position worth 5.36 billion baht.
"If domestic politics becomes more stable, the new government continues its investments on infrastructure projects and tensions over the Sino-US trade war ease, these could help market sentiment to become positive in the second half," he said.
Mr Soraphol said the four key strategies that will drive Thailand's stock market for long-term sustainable growth comprise expanding business into neighbouring countries, the growth of the SET's THSI index, which offers an alternative investment in high-performance ESG stocks, offering high-dividend yield stocks, and supporting listed firms operating well-being businesses.
SET-listed firms can invest in overseas markets to diversify and capture growth opportunities and simultaneously reduce risks experienced in the domestic market, he said.
In 2018, there were 231 SET-listed firms having investment exposure in the global markets, or 44% of total listed firms, a rise from 226 companies registered in 2017.
Attractive investment destinations remain in Europe and neighbouring countries, with Myanmar drawing the most investment flows, followed by Vietnam and Indonesia.
Some 133 listed firms had a combined global investment sum of 199 billion baht last year, while total domestic investment amount was logged at 818 billion.
