Foreign investors sell 100 billion baht in Thai stocks and shares amid global rate rise

Photo Courtesy of Bangkok Post

In the first five months of this year, foreign investors offloaded almost 100 billion baht worth of Thai shares, with 33.4 billion baht sold in May alone, due to increasing global interest rates and uncertainties surrounding the formation of a new government. Despite this, the Stock Exchange of Thailand (SET) expressed optimism yesterday, believing that the recent easing of the US debt ceiling could improve global sentiment and lead to increased investment in Thai stocks, supported by a rebounding Thai economy.

Soraphol Tulayasathien, Senior Executive Vice-President at SET, stated that the outflows from Thailand’s bond and equity markets after the May 14 General Election are likely to be temporary, as investors are concerned about the establishment of a new government and potential changes in economic policy. He said…

“Investors are closely monitoring the situation, and analysts are optimistic that foreign fund flows will be reversed if the new government policies do not affect the country’s competitiveness and push operating costs higher.”

Furthermore, the SET’s forward price-to-earnings ratio (P/E) remains below the historical average, encouraging individual and local institutional investors to maintain a net position for the January-May period. However, Soraphol also highlighted that the reduction of the Organisation of Petroleum Exporting Countries (Opec) output could increase pressure on the economy and investor sentiment.

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By the end of May, the SET index had increased 0.3% from the previous month but had fallen 8.1% from the end of 2022 to 1,533.54 points, in line with other market indices in the ASEAN region. Outperforming the SET when compared with the end of 2022 were industry groups such as technology, consumer products, financials, services, and property and construction reported Bangkok Post.

The average daily trading value for the SET and the Market for Alternative Investment dropped 31.6% from the same period last year to 54.1 billion baht (approximately US$1.58 billion). The trading volume for both markets averaged 60.9 billion baht per day during the first five months. Foreign investors were net sellers for the fourth consecutive month in May, offloading 33.4 billion baht. However, their trading ratio remained higher than any other type of investor for 13 straight months.

The Thai stock exchange’s forward P/E ratio stood at 16.1 times, above the Asian stock markets’ average of 12.5 times. The historical P/E ratio was 20.8 times, surpassing the Asian stock markets’ average of 14.1 times. The dividend yield ratio was 3.17%, below the Asian stock markets’ average of 3.46%.

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Alex Morgan

Alex is a 42-year-old former corporate executive and business consultant with a degree in business administration. Boasting over 15 years of experience working in various industries, including technology, finance, and marketing, Alex has acquired in-depth knowledge about business strategies, management principles, and market trends. In recent years, Alex has transitioned into writing business articles and providing expert commentary on business-related issues. Fluent in English and proficient in data analysis, Alex strives to deliver well-researched and insightful content to readers, combining practical experience with a keen analytical eye to offer valuable perspectives on the ever-evolving business landscape.

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