Institutional investors eye bond market, not stocks
Institutional investors have shrugged off investing in the Thai stock market by shifting their focus to the bond market. However, the SET Index still has a chance to rise in a range of between 1,085-1,251 points.
Tientip Subhanij, director of the Capital Market Research Institute of the Stock Exchange of Thailand, revealed that after he had interviewed both local and foreign fund managers, most of them said they had no policy to add more investments in the Thai stock market. Some of them had not focused on investments in stocks, especially mutual funds. They preferred investing in debt instruments because of low risk.
“Normally, institutional investors are interested in blue-chip stocks. But, it’s not easy to find large companies to list on the stock market. In the meantime, foreign investors have been interested in the bond market rather than the stock market, as we can see from the Thai bond market’s size of Bt600 billion,” he said.
The SET said in the latest report that at the end of October, institutional investors comprised 9.03 per cent of total investments in the Thai stock market, the lowest proportion among investor types. Individual investors accounted for 55.48 per cent, followed by foreign investors with 22.84 per cent and proprietary (brokerage trading for their own accounts) with 12.65 per cent.
Between early this year until October, the institutional investors were net sellers in the Thai stock market with net sales position of Bt26.6 billion, followed by foreign investors with net sales of Bt4.78 billion. The proprietary investors also sold Bt4.54 billion in stocks more than they bought, while individual investors were only net buyers of Bt35.93 billion.
Tawatchai Asawapornchai, first vice president for research of Globlex Securities, said he was confident the SET Index would record a new high after the European debt crisis eases. He looked at a range of between 1,085 and 1,251 points. He believed the government would speed up rehabilitation after the flooding, while the private sector would also hasten production to keep their clients.
“Investing in the Thai stock market is still mainly governed by the international factor. Though the flooding situation will impact the overall Thai economy, declines in stock prices are not a result of the floods. Some stocks will be gainers while some will be losers,” he said.
