Foreigners' net buying of Bt31 billion since February 23 has driven the Stock Exchange of Thailand Index to a 20-month peak and pushed the baht to a 21-month high against the US dollar.
Net foreign investment in the stock market came in at Bt3 billion yesterday alone.
The SET Index yesterday rose 1.77 points to close at 765.54, the highest level since July 2, 2008, when it stood at 760.01 points.
Market capitalisation has also been resurrected, touching a 25-month high of Bt6.15 trillion.
The baht also continued its upward trend, closing at 32.32-32.35 to the dollar.
However, exporters are crying foul, as the unit's appreciation will dent their revenue when dollars are exchanged into baht.
Stock analysts expect a continued inflow of funds from abroad, thanks to an easing of the domestic political conflict and the promising returns offered by the Thai market.
Risk assets like Thai stocks have also become more attractive following the US Federal Reserve's decision yesterday to maintain the fed-fund rate in a range of zero to 0.25 per cent.
However, a US rate hike, expected late this year, would strengthen the dollar and could attract some foreign funds back home.
Adisak Kammool, vice president of KGI Securities (Thailand), expects the inflow of foreign funds to continue next month, when the SET Index could hit 800 points.
Among the factors attracting foreign investors is the 10-per-cent growth forecast this year on listed companies' earnings, from combined net profits of Bt450 billion in 2009.
However, he cautioned profit-taking could follow if the index exceeded 800 points, as prices would then be too high compared with market fundamentals.
Fund inflows will be witnessed throughout Asia, due to the Fed's decision to keep its key rate unchanged. Moreover, investors will regain confidence in Thailand if the mass political protest does not result in violence, said an analyst at Phillip Securities (Thailand).
Arparporn Sawaengpak, assistant manager of DBS Vickers Securities (Thailand), said the market now had only positive factors: the unchanged US rate, relatively stable Thai politics and positive economic expansion.
