Asia Plus Securities stated that Thailand’s capital market is facing several challenges in the third quarter, with foreign fund inflows slowing down. Nevertheless, supportive national policy measures remain in place to help stabilize the country’s economic framework.
Foreign investors have been rapidly reducing their risk exposure by selling Thai bonds at a net value of up to THB 37 billion in the third quarter. This has resulted in a cumulative year-to-date net outflow of THB 7.95 billion. In the equity market, foreigners have been net sellers, offloading nearly THB 20 billion of Thai stocks within just six trading days and accumulating a net short position of 33,000 contracts in the TFEX market.
A key pressure point has been the widening gap in 10-year government bond yields between the U.S. and Thailand, which reached a year-to-date high and has driven continued depreciation of the baht, with the possibility of breaching the 34-baht-per-US-dollar mark.
Despite the sustained weakness in the Thai baht, opportunities persist for Thai businesses with significant foreign income exposure. Beneficiaries include: (1) electronics component makers (DELTA, HANA, KCE); (2) food and agricultural exporters (TU, ITC, CPF, GFPT, STA, NER); and (3) companies in tourism, hospitality, and medical services (MINT, CENTEL, ERW, AOT, BH, BDMS, PR9).
