Foreign investors sold Thai stocks worth 68.9 billion baht in the first quarter, including 41.2 billion in March alone, attributed to the delay in expected US interest rate cuts, economic conditions and weaker operating results of listed Thai companies than firms listed on other exchanges, according to the Stock Exchange of Thailand (SET).
Senior executive vice-president Soraphol Tulayasathien said on Tuesday foreign investors returned to net selling in March, following their net buy of US$82 million in February, as the weakening baht caused them to delay investing in Thai stocks.
In Asia, there are markets with fund net inflows, such as India where the economic growth is high. Bourses in South Korea and Taiwan, meanwhile, benefited from growing domestic consumption as the technology industry is making a comeback.
The other countries have fund flows similar to the Thai stock market, said Mr Soraphol.
SET president Pakorn Peetathawatchai said foreign investors' interest in the stock market stems from many factors such as the overall economic condition of the country and the profitability of listed companies compared with other stock markets.
"I look forward to the second half when higher disbursement of the government budget is anticipated to nourish the economy and stimulate domestic consumption," he said.
"This year, stock market investment is more volatile than last year. You also need to look at the monetary policies of other countries as the policy of each country might not go in the same direction as last year."
Domestic factors also have an impact on market sentiment, so investors should analyse all the information before making investment decisions, said Mr Pakorn.
With more listed companies postponing payment of corporate bonds, he said this would have an impact on the stock market, though individual factors accounted for most of these.
The SET is cooperating with the Thai Bond Market Association to get information about listed companies, whether they have the ability to meet financial obligations, and to closely monitor the situation, said Mr Pakorn.
Mr Soraphol said a deceleration of global economic growth is looming, but it has yet to enter a recession. Monetary policy divergence is apparent after inflation has not eased.
The Federal Reserve still sees rate cuts on the horizon. However, investors are increasingly concerned that the Fed pivot could be delayed and the baht's downside bias remains intact.
Offshore fund outflows from the equity market, particularly big cap stocks, are expected to continue but small to mid cap stocks are increasingly catching investors' eyes.
In March, the SET index rose 0.5% from the previous month to close at 1,377.94 points, moving in line with regional peers. However, the benchmark fell 2.7% from the end of 2023.
The average daily trading value of the SET and the Market for Alternative Investment dropped 30% from a year earlier to 42.7 billion baht.