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Analysis – Thai Stocks Slump in Absence of China Spark

By Ray Wee and Paturaja Murugaboopathy

Singapore, June 16 (Reuters)Thailand’s stock market has become a symbol of investor disillusionment with China’s economic reopening, falling from the market’s favorite in January to being Asia’s second worst-performing market in June. , there are few signs of improvement.

Not only did China’s return after three years of pandemic lockdown fail to deliver the expected export boom and boost in tourism, domestic political stalemate is further weighing on the SET index. .SETI.

After soaring in early January, the market is now down more than 6% for the year and is second only to Malaysia in terms of losses.

“I am surprised that we are struggling,” said Jeep Chattikabani, a portfolio manager at Bangkok-based Tong Pho Fund.

“At the beginning of the year, I thought the wind was blowing. Our view was that the dollar had peaked, the Fed rate hikes were over, and tourism was going to boost the economy.”

“There’s a lot going on, especially on the tourism side, but we haven’t seen the trickle-down effect we were expecting yet,” Jeep said.

The biggest setback is China’s volatile and uneven recovery. China is the largest consumer of Thailand’s exports, especially agricultural products. The January-April growth rate was just her 3.9% as pandemic-driven demand for electronics waned, which has driven her double-digit growth over the past two years.

sea ​​bream Recorded As exports fell 4.9% year-on-year, April’s current account deficit was $500 million, reversing the previous month’s surplus of $4.8 billion.

“We believe the weakening momentum of China’s economic reopening has had a significant impact on the performance of Thai assets this year,” said Abdon’s senior investment director for Asian equities, Puruksa Iamthongthorn, adding that the firm’s key regions The fund is underweight Thailand.

“At home, there are concerns about the impact of China’s slowing recovery on Thailand’s economy, which is reflected in the latest trade and export statistics.”

Foreign investment in Thailand’s $550 billion stock market reached $995 million in May, the fourth consecutive month of outflows and the longest in two years, according to Refinitiv data.

They entered early 2023, fueled by a wave of optimism after China emerged from a coronavirus-free regime.thai baht THB=TH From October lows to January highs of $1 = $32.565, it climbed 15%. It is currently at $34.67 to the dollar.

The stock market also shed most of its gains after hitting a nine-month high in January.

political unrest

At home, political sentiment in Thailand has been cooling for nearly nine years after the progressive opposition Forward Party and Pheu Thai Party defeated a conservative opposition allied with the military. Hopes are high for an end to the military-backed dominance over the years.

but, government A prime minister has not yet taken office, but a prime minister is expected to be elected in 2016. August Front-runner Pita Limjaleongrat faces setbacks and challenges.

“Until we know which party will take over and, importantly, who will be the new prime minister, there will be a certain level of wealth in Thailand,” said Johnny Chen, portfolio manager for Prime Minister William Blair’s emerging markets fixed income team. We need to add a political premium,” he said.

“At the moment, there is still a great deal of uncertainty,” Chen said. The fund’s funds had reduced their exposure to Thailand ahead of the election as valuations became less attractive.

Despite these difficulties, Thailand’s tourism industry is still in a bright spot.

From January to June 11, 11.4 million foreign tourists visited the country, spending 472 billion baht ($13.67 billion), surpassing the 11.15 million for the full year 2022.

The government expects at least 25 million foreign tourists to visit in 2023. That’s also reflected to some extent in the stock market, with the SET Tourism and Leisure Index being less impacted than the broader index, up slightly from the previous year.

William Blair’s Cheng said, “We expect Thailand’s economic recovery to continue this year, driven by a recovery in tourism, which should support the economy, private consumption, support domestic demand, and stabilize Thailand’s external balance. ‘ said.

“In the medium term, we still believe there is potential to re-enter Thai assets.”

Thailand’s SET index underperformed broader indices this year https://tmsnrt.rs/3oYwQqy

Investors flee Thai stocks https://tmsnrt.rs/3CnnaJg

(Reporting by Rae Wee, Singapore and Patturaja Murugaboopathy, Bengaluru; Additional reporting by Ankur Banerjee, Singapore and Gaurav Dogra, Bengaluru; Editing by Vidya Ranganathan and Shri Navaratnam)

((Rae.Wee@thomsonreuters.com;))

The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.

Summarize this content to 100 words
By Ray Wee and Paturaja Murugaboopathy
Singapore, June 16 (Reuters) – Thailand’s stock market has become a symbol of investor disillusionment with China’s economic reopening, falling from the market’s favorite in January to being Asia’s second worst-performing market in June. , there are few signs of improvement.
Not only did China’s return after three years of pandemic lockdown fail to deliver the expected export boom and boost in tourism, domestic political stalemate is further weighing on the SET index. .SETI.

After soaring in early January, the market is now down more than 6% for the year and is second only to Malaysia in terms of losses.
“I am surprised that we are struggling,” said Jeep Chattikabani, a portfolio manager at Bangkok-based Tong Pho Fund.
“At the beginning of the year, I thought the wind was blowing. Our view was that the dollar had peaked, the Fed rate hikes were over, and tourism was going to boost the economy.”
“There’s a lot going on, especially on the tourism side, but we haven’t seen the trickle-down effect we were expecting yet,” Jeep said.
The biggest setback is China’s volatile and uneven recovery. China is the largest consumer of Thailand’s exports, especially agricultural products. The January-April growth rate was just her 3.9% as pandemic-driven demand for electronics waned, which has driven her double-digit growth over the past two years.

sea ​​bream Recorded As exports fell 4.9% year-on-year, April’s current account deficit was $500 million, reversing the previous month’s surplus of $4.8 billion.
“We believe the weakening momentum of China’s economic reopening has had a significant impact on the performance of Thai assets this year,” said Abdon’s senior investment director for Asian equities, Puruksa Iamthongthorn, adding that the firm’s key regions The fund is underweight Thailand.
“At home, there are concerns about the impact of China’s slowing recovery on Thailand’s economy, which is reflected in the latest trade and export statistics.”
Foreign investment in Thailand’s $550 billion stock market reached $995 million in May, the fourth consecutive month of outflows and the longest in two years, according to Refinitiv data.
They entered early 2023, fueled by a wave of optimism after China emerged from a coronavirus-free regime.thai baht THB=TH From October lows to January highs of $1 = $32.565, it climbed 15%. It is currently at $34.67 to the dollar.

The stock market also shed most of its gains after hitting a nine-month high in January.

political unrest
At home, political sentiment in Thailand has been cooling for nearly nine years after the progressive opposition Forward Party and Pheu Thai Party defeated a conservative opposition allied with the military. Hopes are high for an end to the military-backed dominance over the years.
but, government A prime minister has not yet taken office, but a prime minister is expected to be elected in 2016. August Front-runner Pita Limjaleongrat faces setbacks and challenges.
“Until we know which party will take over and, importantly, who will be the new prime minister, there will be a certain level of wealth in Thailand,” said Johnny Chen, portfolio manager for Prime Minister William Blair’s emerging markets fixed income team. We need to add a political premium,” he said.
“At the moment, there is still a great deal of uncertainty,” Chen said. The fund’s funds had reduced their exposure to Thailand ahead of the election as valuations became less attractive.

Despite these difficulties, Thailand’s tourism industry is still in a bright spot.
From January to June 11, 11.4 million foreign tourists visited the country, spending 472 billion baht ($13.67 billion), surpassing the 11.15 million for the full year 2022.
The government expects at least 25 million foreign tourists to visit in 2023. That’s also reflected to some extent in the stock market, with the SET Tourism and Leisure Index being less impacted than the broader index, up slightly from the previous year.
William Blair’s Cheng said, “We expect Thailand’s economic recovery to continue this year, driven by a recovery in tourism, which should support the economy, private consumption, support domestic demand, and stabilize Thailand’s external balance. ‘ said.
“In the medium term, we still believe there is potential to re-enter Thai assets.”
Thailand’s SET index underperformed broader indices this year https://tmsnrt.rs/3oYwQqy

Investors flee Thai stocks https://tmsnrt.rs/3CnnaJg
(Reporting by Rae Wee, Singapore and Patturaja Murugaboopathy, Bengaluru; Additional reporting by Ankur Banerjee, Singapore and Gaurav Dogra, Bengaluru; Editing by Vidya Ranganathan and Shri Navaratnam)

((Rae.Wee@thomsonreuters.com;))

The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.

https://www.nasdaq.com/articles/analysis-thai-stocks-flounder-in-absence-of-china-spark Analysis – Thai Stocks Slump in Absence of China Spark

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