Thailand well placed for short-term capital inflows
SOME OF the expected additional capital injected by various central banks will find its way to emerging markets (EMs) in the short term, and Thailand is looking better than most Southeast Asian countries in this regard, said the president of the Stock Exc
Meanwhile, most markets now expect the US Federal Reserve to raise interest rates next year because the US economy has recovered somewhat, though some of its economic numbers are still missing their targets, she said.
“Investors in the United States and Dubai have voiced the same [opinion] that among the EMs in the region, Thailand is currently in a good position,” she told reporters at the “Thailand CG Forum” that was jointly hosted by the SET, SEC and IOD yesterday.
She recently went on a roadshow to the US and the United Arab Emirates.
Kesara explained that it was necessary to look at the performance of emerging markets under the “new normal” – a period of global low interest rates and commodity prices. EMs that mostly export commodities will be affected the most, and even though Thailand’s exports are mostly commodities (agricultural products), a large part of the country’s imports are also commodities, such as oil.
She noted that while Thailand’s exports in terms of US dollars had contracted by around 5 per cent by September year on year, they actually expanded by 5 per cent in baht terms.
“Our financial numbers are stable and our listed companies’ performances are also better when compared with other EMs,” she said.
“Nevertheless, this is the period when people close their books and foreign fund managers are not doing anything much towards the end of the year. Most of them will wait to see our [economic] numbers for the third and fourth quarters before they make any decisions, so we have to wait and see how much of the capital will come this way.”
Kesara said Thailand’s economic expansion should be better next year thanks to government spending on stimulus measures and investment projects and the expected continued excellent performance of the tourism sector. The latter is expected to expand by around 30 per cent this year, which will be positive for listed companies.
“We also have to keep in mind that around 45 per cent of the listed companies’ profits are from abroad.
“We expect the domestic economy to improve in 2016 and since most of the listed companies have spread out their investment abroad, it can be said that things should improve next year,” she concluded.
