Thailand Becomes Bull Market as Investors Return
Thailand Becomes Asia’s Second Bull Market on Foreign Buying
Udo Weitz/Bloomberg
An investor monitors electronic stock boards at a brokerage in Bangkok. The benchmark SET Index rose as much as 0.6 percent to 867.94, a 20 percent increase from the May low.
An investor monitors electronic stock boards at a brokerage in Bangkok. The benchmark SET Index rose as much as 0.6 percent to 867.94, a 20 percent increase from the May low. Photographer: Udo Weitz/Bloomberg
Thailand’s stocks briefly entered a bull market, the biggest gain among Asia’s 10 biggest markets, as the end of deadly political protests and rising corporate earnings prompt overseas investors to return.
The SET Index rose as much as 0.8 percent to 870.42, more than a 20 percent increase from the May low that analysts define as a bull market. The gauge gained 0.2 percent to close at 864.48, a ninth day of advance and the highest level since May 23, 2008.
“Foreigners are starting to invest in Thai equities again on strong earnings and economic growth,” Supakorn Soontornkit, chief investment officer at MFC Asset Management Pcl, which oversees $7.5 billion, said today in an interview in Bangkok. “The return of overseas investors will be the main factor driving share prices.”
The SET gained 18 percent this year, overtaking Indonesia today as the best performer among the region’s biggest markets, as surging exports limited the impact of the political turmoil. Companies including Bangkok Bank Pcl and Siam Cement Pcl reported higher-than-expected profit in the second quarter amid the nation’s deadliest unrest in almost two decades.
Overseas investors bought a net 8.1 billion baht ($252 million) of Thai shares in the past six trading sessions, the largest six-day purchase in almost four months, according to data compiled by Bloomberg. Foreigners sold 58.7 billion baht of domestic stocks in May, a record monthly selloff.
PTT Exploration & Production Pcl rose 1.3 percent to 153 baht, a three-month high. Land & Houses Pcl climbed 4.4 percent to 6 baht, the most in one month.
Following Indonesia
Indonesia’s Jakarta Composite Index last month became the first benchmark in the region to enter a bull market since the peak of the European debt crisis in May.
Thailand’s finance ministry said last week it expects the economy, Southeast Asia’s largest after Indonesia, to grow 8 percent in the second quarter, even after clashes between troops and anti-government protesters in April and May claimed 89 lives in the nation’s worst political violence in 18 years.
“There is optimism that foreigners will buy more Thai shares after companies reported strong earnings growth and the political situation became more stable,” said Songyos Kulvichien, senior executive vice president at Country Group Securities Pcl, the nation’s second-biggest stock brokerage by trading volume.
Thailand’s exports jumped 47.1 percent in June from a year earlier to a record $17.9 billion, the central bank said on July 30. Automakers Ford Motor Co., General Motors Co. and Mitsubishi Motors Corp. all announced plans to build factories in Thailand in the past month.
Emergency Decree
The benchmark SET Index may rise to 890 this year, said MFC’s Supakorn. That would be the highest level since November 2007. Supakorn’s MFC Islamic Long Term Equity fund has risen 27 percent this year, the fourth-best performer among 228 stock funds based in Thailand, according a data compiled by Bloomberg.
Thai government spokesman Panitan Wattanayagorn said today that the government will allow peaceful protests that only last for a short period of time, signaling it may soon lift a state of emergency imposed in Bangkok about four months ago.
The emergency decree, in force in 10 of Thailand’s 76 provinces, gives authorities immunity and lets them close media outlets, freeze bank accounts and detain suspects for 30 days without charge. It also prohibits gatherings of five or more people.
Thailand ‘Under-Owned’
Investors should buy the “under-owned” stock markets after India led foreign investment into Asian emerging markets, according to Credit Suisse Group AG analysts led by Sakthi Siva.
“If we aggregate net foreign buying over the past three months, Thailand appears to be the most under-owned market,” followed by Taiwan and Korea, said Siva, the top-ranked strategist in Institutional Investor’s 2010 Asian poll.
Thailand has seen overseas investors withdraw a net $311.6 million this year, the only net outflow in Asia, according to data compiled by Bloomberg.
Bangkok Bank, the nation’s largest commercial lender, last month said second-quarter net income rose 41 percent to 6.83 billion baht. Siam Cement, the third-biggest publicly traded company by market value, had a 6.6 percent increase in quarterly profit to 7.29 billion baht.
The following were among the most active on the exchange:
Delta Electronics (Thailand) Pcl (DELTA TB), a Thai maker of electronics parts, gained 0.9 percent to 26.75 baht, its highest close since April 2004. The company was raised to “outperform” from “neutral” at KGI Securities by equity analyst Aungkana Tungwikromkrai.
Halcyon Technology Pcl (HTECH TB), a maker of diamond cutting tools, jumped 10 percent to 3.48 baht, the steepest gain since Sept. 24. The company’s net income more than doubled to 29.4 million baht ($913,498) in the second quarter from 12.1 million baht in the same period a year earlier.
Thai Tap Water Supply Pcl (TTW TB), a water producer, climbed 5 percent to 5.25 baht, the highest level since Aug. 6, 2008. The company will raise its daily output by 38 percent to 440,000 cubic meters this month after completing a new facility, Kao Hoon reported, citing Managing Director Sompodh Sripoom. The increased production will boost earnings in the second half, the report said. Sompodh wasn’t immediately available for comment.
To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net
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