Foreign investors' interest in the Thai stock market has picked up markedly over the past three to four months, although predicting trends for the second half of the year remains difficult, according to Thongmakut Thongyai, a managing director at Citicorp Securities.
M.L. Thongmakut, also head of the Foreign Brokers' Association, said Citicorp recently completed a roadshow presentation with more than 30 funds in San Francisco, New York and Boston to discuss opportunities in the Thai market.
Most had a positive view about Thai stocks, and were prepared to increase their weightings in the market, he said.
Surprisingly perhaps, Thai politics was not a major concern for foreign investors.
M.L. Thongmakut said Citicorp currently recommended stocks such as Siam Cement and Tisco as offering good value.
"Foreign investors are positive about the Thai market, but are quite selective, considering many stocks face problems in terms of liquidity. Foreign funds are quite large, and no one wants to get stuck in a situation where it might be difficult to exit in the future," he said.
Citicorp currently maintains a year-end index target of 550 points, with added foreign fund inflows helping to offset the negative impact of the H1N1 pandemic on market valuations.
M.L. Thongmakut said 550 points represented a fair valuation based on fundamentals, and that current prices had been pushed upwards due to heavy inflows.
The Stock Exchange of Thailand index closed Friday at 644.2, representing a valuation of more than 22 times past earnings.
The index has risen nearly 50% over the past six months and is up 44% for the year to date, thanks in part to foreign inflows.
M.L. Thongmakut said it was difficult to forecast trends for the market over the next few months, considering the heavy inflows already received by the Thai and Asian markets.