Total securities held by Asian investors reached an all-time high in May with a value of 1.68 trillion baht, driven mainly by a significant increase in securities prices after rallies in the stock market, says the Stock Exchange of Thailand (SET).
The amount marks an 11.9% year-on-year increase and accounts for 36.4% of total securities holdings by foreign investors in the Thai bourse.
"The main factors supporting this are the SET index's 9.65% rise [year-on-year in May] and Asian investors having invested more in Thailand's stock market in terms of securities holdings, as well as the [higher] number of investors," the SET said in a release.
The SET index registered 1,561.66 points in May, a rise from 1,424.28 points recorded in the prior-year period.
Half of Asian investors' total securities holdings, worth 1.68 trillion baht, are associated with securities in the financial and technology sectors, according to the SET.
Most Asians investing in Thailand's stock market have been identified as institutional investors.
Compared with 2016, Asian securities holdings have increased in almost every category, especially the industrial sector, natural resources, real estate and construction. The value of securities holdings in these sectors have risen sharply, and almost 96.7% of total holdings are held by Asian institutional investors.
The top three territories for the Asian investors are Singapore, Japan and Hong Kong, respectively. Their combined securities holding totals 1.54 trillion baht or 91.8% of total Asian holdings.
Meanwhile, Aberdeen Asset Management has an overweight outlook on emerging-market equities, including Thailand, supported by the continuous economic recovery and stable political situation, with the general election expected to take place in late 2018.
Orsen Karnburisudthi, senior investment manager at Aberdeen Asset Management, said the firm continues to overweight emerging equities, including India, Indonesia, Singapore, Hong Kong and Thailand.
Without geopolitical risks, equities remain an asset class that whets investor appetite, Mr Orsen said.
"The SET valuations are high relative to historical levels, but they are not too high against those of regional stock markets, excluding Japan, driven by strong earnings growth, good dividends and other positive factors," he said.
Mr Orsen said the firm has invested US$3-4 billion (98-130 billion baht) in Thai equities.
"The amount that firms invest in equities has not changed, except the investment value, which may fluctuate according to market price," he said.
Aberdeen Asset Management expects Thailand's GDP growth in 2018 to improve, driven by exports, resilient tourism, pockets of improvement in domestic consumption, ample liquidity and strong finance in the public and private sectors.
Other supporting factors are government infrastructure spending being pushed through since the third quarter and new projects like the Eastern Economic Corridor.
