Foreign investors have brought US$16.5 billion (Bt632 billion) into the Thai stock market and direct investment in the first quarter of the year, but Thailand could enjoy only $516.6 million in net private inflow, according to the Bank of Thailand (BOT).

Of total foreign capital flow in the first three months, $4.8 billion of foreign direct investment came in, thanks mainly to Ship Corp's deal worth $1.9 billion. The flood of capital apparently reached $1.9 billion in January and $2 billion in March in accordance with Temasek's schedule of stock payment.

Some investors, however, revoked their capital, resulting in $1.1 billion outflow in the period. The net flow of foreign direct investment (FDI) was $3.6 billion in the first quarter, compared with $2.9 billion for the whole of last year.

Unsurprisingly, Singapore played a key role in the direct investment. Net flow from the city-state was $2.4 billion in the first quarter, compared with total net direct investment of $3.6 billion, according to the BOT. It was followed by a net flow of $822 million from the US and $259 million from Japan.

The amount of capital caused the baht's appreciation against the dollar relative to other currencies, including the yen, won and euro.

In addition, the Thai equity bourse attracted a $11.7-billion inflow from foreign investors, slightly higher than the $9.9 billion in the first quarter of last year. Nearly half of it was recorded in January, according to the BOT's data.

The Thai authorities claimed that despite political turmoil the capital inflow was among the highest in the region due to the strong performance of listed companies and the low price-to-earnings ratio.

However, stock investors removed $9.3 billion from the country, so the stock market marked a net inflow of $2.4 billion, lower than the $2.5 billion in the first quarter of last year.

Singapore ranked as the highest active stock investor with $1.8 billion of the net inflow, followed by the United States and Japan.

Meanwhile, many investors left the bond market, which as a result recorded a $239.3-million net outflow.

The investors did not take profits only from the portfolio investment but also from the baht movement.

Now the market expects another round of renminbi adjustment, causing the appreciation of Asian currencies. In addition, the US dollar depreciated when investors lost confidence in the world's largest economy with its twin deficits.

BOT governor MR Pridiyathorn Devakula expressed concern over a fluctuation of capital movements in the rest of the year, but he is confident that it will be under control, as the country's international reserves remain high.

According to the data, there was $542.9 million net inflow of loans, compared with the net outflow ofS$1 billion in the first quarter of last year.

Trade credits recorded a net inflow of $287.9 million, lower than the $1.2 billion in last year's first quarter.

The banking sector showed a net outflow of $5.6 billion, compared with $3.6 billion net outflow in the same period last year, meaning that banks are holding more foreign currency.

Anoma Srisukkasem

The Nation