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Foreign Investors Flee Thai Stocks, Fueling World’s Biggest Drop

(Bloomberg) -- Foreign investors have sold Thai stocks for 13 straight days, the longest stretch since Jan. 26, partly driven by a sluggish economy, weak currency and political uncertainties.

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Global funds offloaded almost $2.5 billion of the Southeast Asian nation’s stocks on a net basis so far this year, according to data complied by Bloomberg as of Monday. Other markets in the region, including Indonesia, Vietnam and the Philippines, also have seen overseas investors withdrawing funds in 2024.

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The equity benchmark Bangkok SET Index is down about 7% for the year and near its lowest since November 2020, with Prime Minister Srettha Thavisin acknowledging Tuesday that political risks may weigh on investors’ sentiment. With a 15% decline in the last 12 months, it is the world’s worst-performing market of all tracked by Bloomberg.

“Weakness in EM currencies is causing some outflows in Indonesia and Thailand,” said Tareck Horchani, head of prime brokerage dealing at Maybank Securities Pte. “Additionally, there are some political uncertainties” in Thailand that “could be contributing to investor caution.”

In May, Thailand’s Constitutional Court accepted a petition by a group of senators seeking to remove prime minister on grounds that his appointment of Pichit Chuenban as a cabinet minister violated the constitution’s ethical standards. Separately, the same court is due to review on Wednesday a petition by the nation’s election commission to dissolve the main opposition Move Forward Party.

In addition, the low travel season may be impacting tourism-related stocks like Airports of Thailand Pcl, Central Plaza Hotel Pcl, Erawan Group Pcl and Siam Wellness Group Pcl, according to Horchani. Thailand’s economy, which relies heavily on tourism, grew only 1.5% in the first quarter.

“China has been a strong recipient of flows as investors reallocate in the hopes of a long awaited recovery, and to a lesser extent, Korea,” said Christina Woon, a fund manager at Eastspring Investments SP Ltd. in Singapore. “The allure of Thailand as a market has diminished.”

NOTE: In March, Exodus From Thai Stocks Worsens on Deepening Corporate Setback

--With assistance from Michael Patterson.

(Updates with Thai Prime Minister’s comments in third paragraph.)

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