Foreigners were net buyers of 146 billion baht worth of equities on the Thai stock market in the first nine months of this year as they expect tourism to revive the economy in the fourth quarter, say executives at the local bourse.
However, rising oil prices, the possibility of a global recession, geopolitical conflicts and climate volatility are risks investors are concerned about, said Soraphol Tulayasathien, senior executive vice-president at the Stock Exchange of Thailand (SET).
"The strong dollar tends to make Asean currencies, including the baht, continue to depreciate, but in the first nine months quite a lot of investments have moved into the Thai stock market and the SET Index has been relatively less volatile when compared with other stock indices," he said.
The outcome of the US Federal Reserve's last Federal Open Market Committee meeting reflects the view that the Fed wants inflation back to its target level within two years, which will push other central banks to accelerate their own rate hikes, said Mr Soraphol.
"Continued interest rate hikes will have a huge impact on the global economy, especially affecting liquidity, tighter financial conditions, raising the cost of borrowing globally, and slowing global growth," he said.
These factors will weigh on the recovery of emerging markets, which rely on exports and tourism. Such markets may have to rely more on domestic spending and stimulus measures, said Mr Soraphol.
Global economic volatility and interest rate increases caused the Thai stock market to drop 3% in September, in line with other markets around the world. In the first nine months of this year, the SET Index was down 4.1% in baht terms, but 15.5% in dollar terms.
He said in the first nine months the SET and the Market for Alternative Investment had an average trading value of 75.1 billion baht, down 25% year-on-year.
In the final quarter of this year, the market is monitoring rising global interest rates, currency fluctuations and the Russia-Ukraine war, said Mr Soraphol.
SET president Pakorn Peetathawat- chai said the Thai private sector is very strong, adopting a cautious debt structure and preparing to handle any possible crisis.
Thailand also has a high level of foreign reserves and the central bank has maintained low interest rates conducive to a business recovery, he said.
Many sectors have improved their performance as pandemic restrictions are eased, particularly exporters and those in energy and service businesses, said Mr Pakorn.
The tourism industry is hopeful it can attract more than 10 million arrivals this year.
Yet political uncertainties have to be eliminated as the country looks forward to a general election early next year, he said.
