Investors assured of Thai resilience
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FOREIGN and local investors have been assured that the Thai economic outlook will improve despite global challenges.
At the stock exchange’s annual “Thailand Focus” event, which was attended by 112 foreign and 98 local institutional investors, Finance Minister Apisak Tantivorawong stressed the country’s economic resilience thanks to policies in three key areas: measures to help the underprivileged and SMEs; investment in infrastructure and an e-payment system; and measures to enhance productivity through research and development.
He expressed his conviction that the Stock Exchange of Thailand would further rise on the back of economic improvement, after the 20-per cent year-to-date gain in the SET Index against a 14-per-cent drop last year.
“The number of foreign investors attending this year’s event surpassed that of previous years. This shows the Thai market’s attractiveness to global investors. The stock market itself is an indicator of the economic condition: The market will advance ahead of favourable economic stories or fall ahead of economic declines,” he said.
In a speech, Bank of Thailand Governor Veerathai Santiprabhob admitted that challenges to the Thai financial system remained huge, but said the system had so far been resilient.
He said the Thai economy had felt the ripple effects of global anxiety. While last year Thailand experienced a net portfolio outflow of around US$7.6 billion, the first seven months of this year recorded a net inflow of more than $5 billion to bonds and equities. The 10-year bond yield hit a record low at 1.54 per cent.
“Despite volatile asset-price movements, the Thai financial system remains resilient thanks to our sound external position and sound financial system,” Veerathai said.
Foreign holding of Thai bonds remains at less than 10 per cent while holdings in the stock market are around 30 per cent of the market capitalisation. To him, this suggests that Thailand is relatively immune to abrupt capital flights.
Meanwhile, the current-account surplus is expected to grow further and the aggregate rate of non-performing loans remains manageable at around 2.7 per cent.
