Thai institutional investors are picking up stocks at a record pace as an exodus of foreign money sends valuations to a nine-month low.
Domestic funds bought a net 32 billion baht ($1.03 billion) of Thai stocks this month through June 26, on course for the biggest monthly inflow since Bloomberg began compiling exchange data in 1999. Foreigners sold a net $2.15 billion of shares this month, heading for a record outflow.
Thailand’s SET Index has dropped 12 percent since Fed Chairman Ben S. Bernanke said on May 22 that policy makers may consider paring stimulus if the U.S. labor market improves, prompting investors to wipe as much as $5.3 trillion in value from global stocks. The slump drove the Thai gauge’s valuation to 11.8 times projected 12-month earnings on June 24, the cheapest since Sept. 5. The SET climbed 1.6 percent yesterday to close at its highest level since June 17.
“With the current valuation and corporate earnings outlook, equity investment may offer spectacular returns,” Saharat Chudsuwan, senior vice president of Tisco Asset Management Ltd., which oversees about $5.5 billion of assets, said by phone on June 26. “This is a great opportunity because the fund outflow hasn’t changed the fundamentals of the Thai economy and companies.”
Southeast Asia’s second-biggest economy may expand 5.25 percent in 2014, accelerating from a forecast 4.75 percent growth in 2013, the International Monetary Fund said on June 17. Earnings of companies in the SET Index may climb 32 percent over the next 12 months, according to data compiled by Bloomberg. That’s double the 16 percent growth forecast for companies in the MSCI Emerging Markets Index.