Investors Turn to Foreign Stocks as Thai Market Volatility Persists

The Thai Stock Market Faces Volatility and Uncertainty as Investors Seek Alternatives

The investment environment in the Thai stock market is currently characterized by volatility and uncertainty. This is due in part to political ambiguity and the unpredictable nature of the bond market. Several debt default issues, including EARTH, ALL, and most recently, STARK, have significantly impacted trading volume.

Investors are now seeking assets that offer good returns with low risk. Many are turning to foreign stocks as a viable alternative. Year-to-date returns show that foreign markets such as NASDAQ (37.1%), NIKKEI (27.1%), S&P 500 (19.5%), HANG SENG (1.5%), and FTSE 100 (3.3%) have outperformed the Thai stock market, which experienced a negative 6.7% return during the same period.

Pairoj Luengtalerngpong, Chief Executive Officer of Aira Securities Public Company Limited, acknowledges the uncertainty in the Thai stock market, mainly attributable to ongoing political issues and the country’s recent recovery from the COVID-19 pandemic alongside the fluctuating interest rates.

Moreover, investors remain concerned about the bond market, which has been troubled by issues such as companies’ inability to pay off their debts upon purchase demand. This has caused a decline in investor confidence in the bond market.

As a result, companies looking to issue new debentures have to offer higher interest rates to attract investors. However, investors now prefer to trust more reliable and stable companies when it comes to bonds.

Despite these challenges, investors are actively seeking diversified options that offer acceptable returns with manageable risks. The popularity of investing in foreign assets has grown significantly as investors perceive higher returns and better value compared to the Thai stock market.

Aira Securities Expands Services to Meet Investor Demands

Aira Securities, recognizing this shift in investor behavior, has expanded its services dramatically. The company now focuses primarily on its foreign securities trading platform known as Global Trading. This platform allows investors to access and invest in stocks and exchange-traded funds (ETFs) worldwide through online channels.

Currently, Aira Securities boasts a customer base of approximately 500-600 clients in the Global Trading group, with over 100 active customers holding an estimated portfolio value of 3,000-4,000 million baht. The majority of these investors allocate around 70% of their investments to the US stock market, 20% to the Hong Kong stock market, and the remaining 10% to the Japanese stock market.

The strategic focus on Global Trading stems from the perceived growth potential in this market. Investor behavior has shifted over the past 2-3 years, with a greater emphasis placed on studying and investing in foreign stock markets due to their higher returns and better value propositions.

Aira Securities’ Global Trading service covers nearly every stock exchange around the world. With round-the-clock manual trading capabilities, investors can now directly invest in major stocks globally with an initial investment of 100,000 baht.

Predicting even further growth, Aira Securities aims to increase the share of Global Trading investors to 30% within the next 1-2 years, up from the current 10% share of the total commission value of their portfolio.

The executives at Aira Securities further highlight the company’s affiliation with AIRA Capital Public Company Limited, a prominent financial business group. AIRA is gaining attention and confidence from top-tier companies, which has prompted recent partnerships, including its upcoming collaboration with Exchange Tokyo Stock (TSE) and Sumitomo Mitsui Trust Asset Management. This collaboration aims to introduce Thai investors to the Japanese market through a seminar, expanding AIRA’s product and service offerings from abroad.

This partnership with Tokyo Stock Exchange carries significant weight, as it is widely recognized and respected by investors worldwide. Consequently, the merger is expected to attract more foreign investors to Thailand and further strengthen the country’s appeal as an investment destination.

The investment situation in the Thai stock market is volatile. o political ambiguity When it comes to the bond market, it is full of uncertainty. Both are debt default issues, whether EARTH, ALL, and most recently, STARK, which reflects the light daily trading volume.

This makes investors look for assets with good returns. and low risk Most of them tend to choose foreign stocks as an important alternative. From the average return on investment from the beginning of the year to July 31, 2023, there is a better level than the stock market of Thailand, such as NASDAQ (America) up to 37.1%, NIKKEI (Japan) 27.1%, S&P500 (America). ) 19.5%, HANG SENG (Hong Kong) 1.5% and FTSE 100 (UK) 3.3%, while returns on the Thai stock market were negative 6.7% during the same period.

Pairoj Luengtalerngpong Chief Executive Officer Aira Securities Public Company Limited revealed that investing in the Thai stock market is in a period of uncertainty Especially political issues that have not ended yet. In addition, Thailand’s economy has just recovered from the situation of the COVID-19 epidemic. and the fluctuating interest rate situation

At the same time, investors are worried about the situation in the bond market. which is continuously having problems after the debentures of some listed companies Unable to pay debts at the time of making the purchase demand And the confidence of investors in the bond market decreased.

such an event As a result, companies that want to issue new debentures to replace the old ones (roll over) have to pay higher interest rates to attract investors. however These days investors trust the bonds of companies that are more reliable and stable.

Therefore, bonds in reputable companies And it is not rated for credit (Not rated), it is expected that it will be more difficult to issue new debentures instead of the old one. Currently, unrated bonds that are about to roll over have a total value of tens of billions of baht.

However, investors have been looking for more diversification options. taking into account the good return in the acceptable risk in various assets especially investing in foreign assets which has become increasingly popular

Pairoj said IRA Securities has expanded new services. continuously Especially focusing on driving foreign securities trading platform business (Global Trading) investing in stocks abroad. via the internet to access investing in stocks and ETFs worldwide

Currently, IRA Securities has a customer base in the Global Trading group of approximately 500-600 and is a group of more than 100 active customers with an estimated value of 3,000-4,000 million baht. The first will be the US stock market around 70%, the Hong Kong stock market around 20% and the Japanese stock market around 10%.

The fact that IRA Securities has turned to focus on Global Trading is because it sees the opportunity to grow in the market. Because the behavior of investors in the last 2-3 years has changed according to investment trends in the world market. As a result, most investors began to study investment in foreign stock markets more because trading in foreign markets offers higher returns and better value compared to the Thai stock market.

IRA Securities’ Global Trading service currently covers the stock exchanges of almost every country around the world. Capable of manual trading 24 hours a day, where investors can choose to invest directly in all the world’s major stocks. Use the initial investment of 100,000 baht.

Currently, IRA Securities has a proportion of the general portfolio customers who are interested in investing in foreign markets. 20-30% Most investors will invest in new stocks that are in the global investment trend such as Artificial Intelligence (AI), Semiconductors, Technology Software, EV (Electric Vehicle) and stocks with Sustainability (ESG), which is from the higher proportion of foreign investment portfolios Consequently, the company aims to increase the share of Global Trading investors to 30% in the next 1-2 years from the current share of 10% of the total commission value of the portfolio.

The executives of IRA Securities also added that the IRA Securities is one of the financial business groups of AIRA Capital Public Company Limited or AIRA which receives attention and confidence from first-class companies that joined as a business partner Recently, preparing to join an Exchange Tokyo Stock (TSE) and Sumitomo Mitsui Trust Asset Management in organizing a seminar to introduce Thai investors to know more and invest in the Japanese market.

From this positive factor, “Aira Group” will have a wider range of products and services from abroad. More importantly, it can expand the foreign investor base to invest even more in Thailand because the Tokyo Stock Exchange is a large stock market and well known to investors around the world. Therefore, it is believed that this merger will help attract more foreign investors to Thailand.

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