Foreign investors continue to inject money into Thai equities

Foreign investors continued to inject money into Thai equities throughout July, with net inflows exceeding 11 billion THB (about 339 million USD) as the Thai stock market became more attractive due to a weaker US dollar and hopes of a favourable outcome from US-Thai trade negotiations.

Koraphat Vorachet, assistant managing director and head of research at Krungsri Securities (KSS), said foreign fund flows into Asian stock markets remain positive, with clear buying signals seen in the Republic of Korea (RoK), the Philippines and Thailand.

He said this trend reflects bullish investor sentiment and KSS expects continued net foreign buying across the region for the rest of this month.

According to data from SET Smart, foreign investors were net buyers on 11 out of 12 trading days through July 23, bringing total net inflows to more than 11 billion THB for the month. However, on a year-to-date basis foreign investors recorded net outflows of 67.5 billion THB, while Thai retail investors remained net buyers with more than 93 billion THB.

KSS recommends focusing on large-cap stocks in the spotlight for foreign investors, such as Advanced Info Service (ADVANC), Bangkok Dusit Medical Services (BDMS), Bangkok Bank (BBL), CP All, Gulf Development (GULF), Siam Commercial Bank (SCB) and PTT.

Having a similar view, Finansia Syrus Securities noted that the continued foreign inflows are being driven by the weakening US dollar, which has strengthened Asian currencies and attracted more capital into regional markets.

Investor optimism has also been fuelled by expectations of a potential tariff agreement between Thailand and the US following successful negotiations with Vietnam and Indonesia, which resulted in rallies in their stock markets.

According to Finansia Syrus, speculators are betting Thailand could follow a similar path, prompting early capital inflows in anticipation of a deal./.