ID :
137627
Sat, 08/14/2010 - 17:58
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Shortlink :
https://oananews.org//node/137627
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Foreign capital influx continues into Thailand
BANGKOK, Aug 14 -- Foreign capital inflows continued entering Thailand in early August on the back of improved foreign investor confidence in the Thai economy coupled with declining worries over domestic politics and higher yields on high expectations that local interest rates would rise, said Bank of Thailand (BoT) deputy governor Bandid Nijathaworn.
Mr Bandid said about US$187 million in foreign capital inflows entered the Thai stock market between August 2-6 and over US$400 million entered the bond market between August 3-9.
Foreign investment in the bond market was higher than the equity market, probably due to the existing volatility in the foreign currency market and the sensitivity of the fundamentals of stocks, he said.
The bond market has lesser volatility while there are trends of rising interest rates making long-term investors become more enthusiastic in investing in the bond market, Mr Bandid said.
If Thailand’s economy continues recovering and no political problems arise, a larger volume of foreign capital should enter the country, which would be beneficial to Thailand, he said.
Mr Bandid admitted that part of the inflows are short-term and there are chances that it would leave the country. In such a case the BoT must monitor risks from the inflows and possible effects on assets and the value of the Thai baht.
The ongoing strengthening of the baht reflects Thailand’s currency account surplus and larger savings than investments, and simultaneously shows the increase in foreign capital inflows, Mr Bandid said. These factors will pressure the baht to strengthen further.
By late Friday, the baht stood at 31.92-31.98 against the dollar. (MCOT online news)
Mr Bandid said about US$187 million in foreign capital inflows entered the Thai stock market between August 2-6 and over US$400 million entered the bond market between August 3-9.
Foreign investment in the bond market was higher than the equity market, probably due to the existing volatility in the foreign currency market and the sensitivity of the fundamentals of stocks, he said.
The bond market has lesser volatility while there are trends of rising interest rates making long-term investors become more enthusiastic in investing in the bond market, Mr Bandid said.
If Thailand’s economy continues recovering and no political problems arise, a larger volume of foreign capital should enter the country, which would be beneficial to Thailand, he said.
Mr Bandid admitted that part of the inflows are short-term and there are chances that it would leave the country. In such a case the BoT must monitor risks from the inflows and possible effects on assets and the value of the Thai baht.
The ongoing strengthening of the baht reflects Thailand’s currency account surplus and larger savings than investments, and simultaneously shows the increase in foreign capital inflows, Mr Bandid said. These factors will pressure the baht to strengthen further.
By late Friday, the baht stood at 31.92-31.98 against the dollar. (MCOT online news)
