- Earnings growth and dividend payouts to lure investors
- Valuations led to technical correction, Thai bourse head says
Thai stocks, the worst performers in Asia this month, offer “good value” as the nation’s economic recovery bolsters corporate earnings and dividend payouts, according to the stock exchange’s president.
The country’s equities will continue to attract foreign funds, Kesara Manchusree, the president of Stock Exchange of Thailand, said in an interview with Bloomberg Television in Bangkok. Thai stocks have dropped more because their valuations led to a “technical correction,” she said.
“What we are seeing is that a lot of companies have growth potential,” Kesara said. Thai stocks “may not be the cheapest ones. I believe that we offer good value to investors with earnings growth and dividend yield,” she said.
Thai equities have retreated more than 4 percent this month through Friday. Stimulus measures to help shield Thailand from China’s slowdown had made the nation’s shares a haven for foreign investors this year. Bets that the U.S. will delay raising borrowing costs also boosted fund flows into the country and its developing-nation peers. The benchmark SET Index entered a bull market in July and reached the highest level in 15 months in August, sending valuations to near the most expensive in at least 10 years.
Earnings at companies on the SET Index are projected to rise 37 percent in the next 12 months, the second-fastest growth in Southeast Asia. The gauge’s dividend yield of 3.25 percent compares with 2.7 percent for the MSCI Asia Pacific Index. Overseas investors bought a net $568 million of domestic equities this month, set for a fifth month of net buying, the longest streak of inflows since 2012, according to data compiled by Bloomberg.
The SET Index climbed 0.9 percent to 1,492.73 at the close on Monday in Bangkok, its fifth day of advances.
Thailand’s central bank on Sept. 14 revised its economic growth forecast for this year slightly higher to 3.2 percent from 3.1 percent due to a temporary pick-up in private consumption in the second quarter. It also kept its benchmark interest rate unchanged for an 11th consecutive meeting, the longest streak on record, as the economic recovery gained momentum.
The Thai stock exchange may see the first listing of either shares or real estate investment trusts by foreign companies in 2017, said Kesara.
“We are open for listings of foreign assets such as stocks and real-estate investment trust,” said Kesara. “We are doing a lot of marketing.”