Foreign sell-off carries on in Thailand

Foreign net outflows from Thai equities were 20.1 billion baht for the first 11 months. The second quarter was the only period where foreign investors were net buyers of Thai shares this year.  PORNPROM SATRABHAYA. Sketched by the Pan Pacific Agency.

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BANGKOK, Dec 4, 2019, Bangkok Post. Foreign investors continued to be net sellers of Thai equities worth 7.7 billion baht last month, a trend seen across most Asian bourses, says the Stock Exchange of Thailand (SET), Bangkok Post reported.

Despite capital outflows continuing unabated, November’s offshore fund outflows were milder than October’s net outflows of 7.8 billion baht.

For the first 11 months, foreign net outflows from Thai equities were registered at 20.1 billion baht.

On a quarterly basis, foreign net outflows were 13.3 billion baht in the first quarter and 45.3 billion in the third quarter. The second quarter saw foreign net inflows worth 54 billion baht.

“We are not worried about foreign fund outflows this year as they are still much lower than last year,” said SET senior executive vice-president Soraphol Tulayasathien.

“Although there has been a sell-off of Thai bonds, these outflows from the bond and debenture market have not been substantial enough to have an impact on the local currency.”

Offshore net outflows during the first 11 months of 2018 totalled 287 billion baht. Foreign investors were net sellers of Thai equities in every quarter of last year.

Mr Soraphol said the value of funds raised from initial public offerings (IPOs) in November was Asean’s highest at US$419 million. The 11-month IPO value in Thailand’s stock market was valued at $2.55 billion.

From the beginning of 2014 to November 2019, IPO value raised in Thailand’s capital market was $16.1 billion, besting Singapore’s $7.2 billion.

The average daily trading value on the SET index and Market for Alternative Investment index was worth a combined 52.8 billion baht in November, up 27% year-on-year.

The SET index closed at 1,590.59 points at the end of November, down 0.7% from the previous month but an increase of 1.7% from year-end 2018. The decline in the SET last month was the lowest among Asean bourses thanks to a greater weighting of Thai shares in the MSCI Global Standard index, said Mr Soraphol.

“We have 41 Thai securities listed on the MSCI Global Standard index, up from 37 in May,” he said.

The SET’s market capitalisation stood at 17 trillion baht at the end of last month, up 5.1% from year-end 2018.

Forward and historical price-to-earnings ratio of the Thai bourse stood at 17.1 and 19.5 times, respectively, higher than Asia’s average at 14.7 and 15.7 times. The SET’s dividend return registered 3.16% in November, higher than Asia’s average return of 2.92%.

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