Thailand’s Stocks Head for Longest Gain in 16 Years on Economy

Thailand’s stocks extended gains after entering a bull market this week, set for the longest winning streak in 16 years as accelerating economic and earnings growth lures overseas investors.

The SET Index rose for an 11th day, climbing as much as 0.9 percent to 875.05, and traded at 874.15 as of 12 p.m. local time. That’s the longest stretch of gains since May 1994. The measure has climbed more than 20 percent since its May 25 low, an increase that analysts define as a bull market.

Thailand’s economy, the second biggest in Southeast Asia, may expand as much as 8 percent this year, more than previously forecast, as exports and spending gather strength, Finance Minister Korn Chatikavanij said yesterday. Companies including Sri Trang Agro-Industry Pcl and KCE Electronics Pcl this week reported earnings jumped on higher overseas demand.

“Foreign investors have begun to purchase Thai equities again on confidence in the economy,” Sopawadee Lertmanaschai, secretary general of the Government Pension Fund, which manages about $14 billion of assets, said in an interview today. “Most companies also reported very good earnings in the second quarter even as the country suffered a political crisis in the period.”

Banks led gains today on the outlook for the economy. Bangkok Bank Pcl, the biggest lender, climbed 1.8 percent to 140 baht, the most in two weeks, while Kasikorn Bank Pcl rose 2.4 percent to 106 baht, the highest in almost 14 years.

Second-Best Performer

The SET has gained 19 percent this year, the second-best performer among Asia’s 10 biggest markets, as surging exports limited the impact of the political turmoil. Clashes between troops and anti-government protesters in April and May claimed 89 lives in the nation’s worst political violence in 18 years.

Overseas investors bought a net 11 billion baht ($343 million) of Thai shares in the past eight trading sessions, the largest eight-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.

“We are surprised by the rebound in exports and also the level in private investment and consumption as well,” Korn said in a speech in Bangkok late yesterday. “Even with the political crisis, we can expect 7 percent. If things hum along the way they are, perhaps 8 percent will be achievable.”

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.

Sri Trang, KCE

Sri Trang, the nation’s largest publicly traded rubber producer, gained 5.1 percent to 22.7 baht after it said yesterday second-quarter profit jumped fourfold to 1.39 billion baht. KCE, the biggest publicly traded exporter of printed circuit board, climbed 4.6 percent to 10.2 baht, headed for the highest close since March 2004. The company said this week net income in the quarter surged 33-fold to 161 million baht.

Thai government spokesman Panitan Wattanayagorn said this week 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.

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