Thailand’s exchange chief unfazed by US$6 billion foreign investor outflow

July 12, 2018 | By | Reply More

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Thai stock exchange president Pakorn confident the market will rebound in 5 years with the nation’s “sound” economic fundamentals and corporate-earnings growth.

An investor looks at an electronic board at a Thai brokerage in Bangkok (Reuters pic)

BANGKOK: Foreign investors have pulled more than US$6 billion from Thai stocks this year. But that’s no reason for concern, says the president of the nation’s main bourse.

Thailand’s “sound” economic fundamentals and corporate-earnings growth will attract domestic investors, and those will make up for the biggest foreign withdrawals in about five years, Pakorn Peetathawatchai, the president of the Stock Exchange of Thailand, said at the Bloomberg’s Asean Business Summit in Bangkok Thursday.

It’s also thanks to the locals that the nation’s shares have done better than regional peers, he said. While the benchmark Stock Exchange of Thailand Index hasn’t been immune to escalating US-China trade tension and rising interest rates – it’s down more than 6% this year – it’s outperforming markets such as Indonesia, Vietnam and the Philippines, whose national gauges have plunged as much as 14% in the same period.

“The stock market hasn’t dropped that much because of the depth and trading liquidity thanks to domestic investors,” Pakorn said and added that foreigners hold about 30% of the Thai stock market.

Export growth, a rebound in domestic private consumption and investments, as well as increased government spending will accelerate the expansion in Southeast Asia’s second-biggest economy, bolstering corporate earnings, he said. The nation is forecast to grow at a 4.2% rate this year, up from 3.9% in 2017.

Pakorn, who took over at the exchange on June 1, is seeking to boost trading on the Thai bourse. He reiterated his plan to increase the number of new products available to companies already public elsewhere in Southeast Asia, with a focus on dual and cross listings as well as depository receipts. The bourse expects to attract its first foreign-stock listing this year, he said in June.

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