Thai stocks jumped, driving the benchmark index to its highest level in more than 16 years, as overseas funds added to their holdings of domestic shares amid improving economic growth prospects.
The SET Index climbed 1.1 percent to 1,397.19 in Bangkok, the highest close since Feb. 7, 1996, and the biggest gainer in Asia. Turnover was 37.2 billion baht ($1.2 billion), 6 percent more than the three-month daily average, data compiled by Bloomberg show.
Foreign funds bought a net 2.54 billion baht of stocks today, the biggest purchase since Dec. 12, according to stock exchange data. Overseas investors have plowed a net 22 billion baht into local equities this month, compared with 6.2 billion baht in November, data show. Gross domestic product will increase 5.7 percent this year, exceeding a previous forecast of 5.5 percent, the Finance Ministry said yesterday.
“Trading volume increased significantly today as several overseas investors returned to work after holidays,” Petcharat Powattanasatien, head of equity investment at Bangkok-based Kasikorn Asset Management Co. Ltd., which manages more than $26 billion of assets, said by phone. “Thailand’s strong economic prospects boosted the attractiveness of domestic equities.”
Local institutional investors, including mutual funds, bought a net 2.3 billion baht of Thai equities today, the most since Oct. 10, according to Stock Exchange of Thailand data.
Thai individuals also increased their investments in so-called long-term equity funds before the end of the year to save on taxes, according to Petcharat. The government offers tax breaks of as much as 500,000 baht on such investments.
The SET Index has gained 36 percent this year as domestic investments and consumption recovered from floods in 2011 that were the worst in almost seven decades. The government also raised minimum wages and offered tax incentives for automobile purchases to boost growth.
-- Editors: Ravil Shirodkar, Shamim Adam