Managed Money Exits Thai Stock Market, Baht Sinks
Thailand’s baht fell to its weakest marks since September 2009 after foreign funds pulled money from local assets amid a rout in Chinese equities.
Global funds have withdrawn a net $199-M from Thailand’s stocks and bonds this month, taking total outflows for Y 2015 to $1.2-B.
The benchmark SET Index closed at the lowest level this year as investors grapple with potential risks stemming from Greece’s possible exit from the euro and whether China’s plunging stock market will worsen an economic slowdown.
The baht declined for a 3rd day running, retreating 0.2% to 34.011 a UDS as of 4:42 p.m. in Bangkok. The currency, which has lost 4.3% in the past 3 months in Asia’s 2nd-worst performance, sank as low as 34.058 earlier. .DXY strength rose for a 4th day running.
Foreign outflows signal a weaker outlook for the baht. The ongoing anxiety in China’s stock market and its economy has further weakened sentiment for the baht and other currencies in the region.
China is the 2nd-biggest export market for Thailand after the US, accounting for about 11% of total overseas shipments in the January-May frame, according to figures from the commerce ministry statement.
The Shanghai Composite Index has plunged 32% since marking a high on 12 June.
Thailand’s sovereign bonds climbed, pushing the 10-year yield down 6 bpts to a 1-month low of 2.87%.
Stay tuned…
HeffX-LTN
Paul Ebeling
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