Stronger baht will help push SET up by 3-4%, says analyst
The appreciation of the baht will help push the Stock Exchange of Thailand (SET) Index up by 3 to 4 per cent as foreign investors are making profits from speculating on the exchange rate, an analyst at Asia Plus Securities said on Friday.
He said the baht is likely to strengthen further due to US move to place Thailand on its monitoring list for currency manipulation, resulting in foreign investors speculating on the foreign exchange rate in Thai stock market.
The baht opened at 29.79 to the US dollar on Friday, strengthening from 29.84 at close on Thursday, the strongest in seven years.
"Funds are expected to flow from the bond market to the stock market as Thailand's one-year bond yield dropped to 0.42 per cent, lower than policy interest at 0.5 per cent," he said.
According to statistics in the past, he said funds often flow into the stock market when the baht strengthens, resulting in a boost in the stock index.
"Every Bt10 billion fund that flows into the stock market is likely to push the index up by 3-4 per cent," he said.
He has advised investors to buy large-cap stocks that benefit from foreign fund flows such as PTT, Advanced Info Service, including stocks that benefit from the strengthening of the baht, such as Thaifoods Group.
