Preliminary
results show that Joe Biden from the Democratic Party has been elected the 46th
President of the US, leading to a major shift in investment portfolios around
the world. Thai stock and bond markets are among Asian money and capital
markets that benefited from this shift of investment.
During November
1-17, 2020, foreign capital flowing into the Thai bond market reached THB46.2
billion, and foreign investors recorded a net buying position of THB25.6
billion in the Thai stock market after net-selling for 15 consecutive months (staring
from August 2019), while the Thai stock index (the SET) increased 13%.
Foreign capital
has flowed into Thai stock and bond markets in the same time (combined with the
weakening US dollar along with the signals of the Federal Reserve (Fed) for
monetary easing and Thailand’s current account surplus), causing the Baht to appreciate
significantly. The Baht has already strengthened approximately 3.4%
since the beginning of November 2020 to THB30.16/USD as of November 17, 2020.
The situation of
the Baht appreciation is becoming a factor that is being closely monitored by
both export operators and related government agencies, as it may affect the
recovery path of the Thai economy in the future. Therefore, the important
factors to be monitored will be Baht management measures and domestic political
issues. Meanwhile, the US dollar is still influenced by the signal of monetary
policy stance by the Fed, the COVID-19 situation and Joe Biden’s push for US
economic policy in future.
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