More foreign investment in Thai shares anticipated

Yesterday, their net-buy was valued at Bt1.7 billion though the composite index lost 1.51 points or 0.11 per cent to end the day at 1,392.15 points, according to the Stock Exchange of Thailand data.

In contrast, the sharp fall in the stock market in September apparently continued to spook local non-institutional investors. Yesterday, they sold shares for Bt2 billion net, boosting the month-to-date net-sell to Bt10.4 billion. Still, so far this year, they remained the net-buyers with net-buy position of Bt51 billion.

Stock markets across Asia Pacific lost 0.5 per cent yesterday, ending the 6-day winning streak that was propelled by a global surge in risk appetite as expectations of the US Federal Reserve hiking interest rates this year ebbed.

In a related development, a monthly survey by the Federation of Thai Capital Market Organisations (FETCO) showed an increase in foreign investor confidence in the Thai stock market in the next three months.

The FETCO NIDA Investor Sentiment Index for December shows foreign institutional investors confidence at 101.48 points, the highest score in five months. The survey was conducted in September. It showed a sharp improvement from 59.57 point.

Confidence rose in all sectors particularly construction and steel, as the government’s economic stimulus package is expected to boost the economy. Yet, downside risks persist including weak global demand, low commodity prices, the recovery in the tourism industry as well as political stability.

FETCO chairman Vorawan Tarapoom said foreign investors have shown stronger confidence in the Thai economy.

Thiti Tantikulanan, head to Kasikorn Assets Management, said Thai economy has almost passed the lowest level though downside risks remain. Possible to disrupt the economy are China’s slowdown, US rate hike and currency depreciation in emerging markets.

"The Thai economy will recover in a ‘U-shape’. The slow growth period could stay for a while," he said.