Baht Posts Biggest Weekly Gain Since January as Inflows Surge

  • Foreign funds bought a net $240 million of stocks this week
  • Stability in Chinese financial markets also helping: economist

Thailand’s baht had its biggest weekly advance since January as overseas funds boosted holdings of the nation’s stocks amid a pick up in the global growth outlook.

Foreign investors pumped a net $240 million into Thai equities in the last four days, headed for the largest weekly inflow since January 2015, according to data compiled by Bloomberg. A rebound in oil prices, an improvement in U.S. data and optimism that China will increase stimulus to spur its economy revived demand for emerging-market assets. JPMorgan Asset Management this week said it favors stocks in Thailand and Indonesia.

The currency snapped a three-week loss and climbed 0.9 percent from Feb. 26 to 35.418 a dollar as of 4:07 p.m. in Bangkok, according to data compiled by Bloomberg. It rose 0.2 percent on Friday and is up 1.8 percent in 2016.

“There will probably be more inflows into assets, especially equities, in Thailand and most Southeast Asian countries because their economies will greatly benefit from higher prices of energy and commodities,” said Usara Wilaipich, a Bangkok-based economist at Standard Chartered Plc. “The stability in Chinese financial markets has also removed pressure on their currencies.”

Thailand’s economy is dependent on exports and the U.S. and China are its biggest markets. The baht’s current level is not an obstacle to the economic recovery, central bank Deputy Governor Mathee Supapongse said on Wednesday.

Sovereign bonds climbed, with the yield on notes due December 2025 slumping 20 basis points this week and four basis points on Friday to 1.91 percent, data compiled by Bloomberg show. Foreign funds bought a net $207 million of Thai corporate and government bonds in the week through Thursday.

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