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Thailand: Foreign inflows jumped following improved political climate – EPFR

Posted on: June 26, 2009

Source: Emerging Portfolio Fund Report

26 June 09

Foreign inflows surged significantly in May 09, following improved political climate after the government suppression of the red-shirt protestors during Songkran festival in mid Apr 09.

According to Emerging Portfolio Fund Research (EPFR), which collates data from over 600 international funds, the net inflows in May 09 jumped more than nine folds to US$127m from just only US$14m in Apr 09.

We believe that net foreign inflows would increase even further in Jun 09. According to Stock Exchange of Thailand’s (SET) statistics, net foreign inflows have amounted to US$310m month-to-date, which is almost 2.5 times of May’s figure.

Although Thailand has seen more foreign inflows, % of Thai weighting in Emerging Market Asia is still pretty low. That is, it stood at 3.1% as at end-May 09, same as in Apr 09, but lowered from 3.3% as at end-2008, according to the EPFR.

Therefore, we believe that most foreign investors are still Underweight the Thai market. Thus, if political situation in Thailand remains calm and foreign investors becomes more confident in Thailand’s economic outlook, then more foreign inflows can be larger.


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