Thai stocks are a safe zone for emerging markets, with foreigners buying 4.2 billion baht.
Thai stocks are a safe zone for emerging markets, with foreigners buying 4.2 billion baht, outpacing other ASEAN countries. Analysts reveal that the money is fleeing the AI bubble, flowing out of India and Indonesia, and global financial institutions are adjusting their portfolios with a focus on Thailand.
18 Feb. 2569 – The Thai stock market in early 2569 showed significant recovery. This was primarily driven by the most outstanding foreign capital inflows (fund flows) in Southeast Asia.
Finnomena revealed that Foreign investors have made net purchases of the Thai stock market year-to-date (YTD) totaling 4.2 billion baht (approximately $1.49 billion), a record that significantly surpasses other ASEAN countries such as Malaysia and the Philippines.
While major emerging markets like India and Indonesia are facing net capital outflows, reflecting a shift in investment rebalancing by global financial institutions targeting assets in Thailand.
Finnomena I think that Structurally, while the large-cap stock index (SET50) has risen strongly by 16% since the beginning of the year, there are signs of investment funds diversifying into asset classes that have not lagged behind the market (laggard stocks), particularly in the sSET and mai indices.
Data from the past three years shows that mid-cap and small-cap stock indices have declined by 44% and 62%, respectively, while the SET50 index has fallen by only 2.6%. This wide margin, coupled with positive seasonal factors following the Chinese New Year, has accelerated investors' search for additional returns in fundamentally sound mid-cap and small-cap stocks.
In the current bull market in Thai stocks, especially following the election where the Bhumjaithai Party won an overwhelming majority, many analysts have revised their 2569 target for the Stock Exchange of Thailand (SET) index upwards to 1,500 points.
Today (February 18), Asia Plus Securities Research was the first brokerage to revise its target for the Thai stock market above 1,500 points to 1,510 points (from the previous 1,440 points), after observing clear signs of shifting investment funds since the beginning of February. The U.S. technology stock market faced selling pressure due to concerns about an AI bubble and the unprofitability of massive investments, resulting in declines in the NASDAQ and S&P 500 indices.
As that money flows into... "Safe Zone" Emerging Markets More specifically, the Thai stock market has risen remarkably by over 10% (MTD), going against the global market trend.
There are four main reasons supporting the Thai stock market (SET Index) towards its target of 1,510 points.
- Fund flows: The de-dollarization phenomenon has weakened the dollar and caused capital to flow out of the United States into Asia.
- The favorable policy interest rate: Thailand's maintenance of its policy interest rate at 1.25% creates an environment conducive to an upward movement in the stock market (historically, when interest rates are stable and low, the market tends to react positively).
- Earnings Surprise: Thai listed companies reported better-than-expected earnings, averaging 5% more than projected, representing an increase in EPS of approximately 1.25 baht per quarter.
- The valuation is interesting. The downward revision of the Market Earning Yield Gap (MEYG) to 4.7%, the same level as during the period of heavy net foreign buying in 2016 and 2022, reflects the potential for further upside in the index.
investment strategy
Asia Plus Securities For investment strategies, we recommend identifying strong stocks with a dividend yield exceeding 3%. We suggest selecting stocks with projected earnings growth in 2026 and a dividend yield higher than 3%. Key stocks in each industry group are listed below:
- Real estate groups: SC, AP
- Food and export group: ITC, CBG
- Commercial and service group: COM7, CPALL, BDMS
- Energy/Industrial Estate Group: GUNKUL, BCPG, OR
Let's look at the technical factors, according to Bualuang Securities. We view the SET index as being in a bull market, with a clear primary upward trend. The price structure shows a continuous Higher Low pattern. Breaking through the key resistance level of 1,450 points and holding above it would further solidify a larger uptrend, with the next target at 1,500 points.
The key support level is 1,400 points. This zone is a strong buying base (after the February 9th election, net foreign investment was around 1.6 billion baht). It should not be broken to maintain the uptrend.
Indicators support a bullish outlook; the EMA 200 Week acts as a dividing line between "bear market vs. bull market." Staying above this line sends a positive signal, attracting foreign fund flows.
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