Stock markets in Thailand, Indonesia, the Philippines and Malaysia have been “remarkably resilient” and investor interest may increase, drawn by Southeast Asia’s economic growth and an equities rally, JPMorgan Chase & Co. said.
Thailand’s economy is estimated to expand 8.5 percent this year, the fastest among the four nations, JPMorgan analysts Sriyan Pietersz and Adrian Mowat wrote in a report yesterday. Indonesia may report growth of 6 percent, while economies in Malaysia and the Philippines may expand 7.2 percent and 6.8 percent respectively, according to the reports.
Benchmark stock indexes in Indonesia, Thailand and the Philippines have rallied more than 15 percent each, the best performers among the 12 largest Asian stock markets this year. Malaysia’s FTSE Bursa Malaysia KLCI Index, the fourth-best, has gained 6.7 percent during the period, while China’s Shanghai Composite Index has slumped 21 percent, the worst performer in Asia, amid efforts by policy makers to cool lending and curb property speculation.
“Against the backdrop of a highly volatile global environment, the emerging Asean four have been remarkably resilient,” the analysts wrote, referring to the Association of Southeast Asian Nations. “The wider context within Asia excluding Japan also confirms our view, with concerns over China growth a positive funds flow driver for Southeast Asia.”
Within the four countries, JPMorgan has “overweight” positions in Thailand and the Philippines. They are “neutral” on Indonesia and Malaysia, according to the report. That compares with a “significantly overweight” position in Indonesia among emerging market fund managers, who remain “underweight” on the other three markets, the analysts said.
Foreign investors have bought a net $1.38 billion of Indonesian stocks this year, up 34 percent from the same period last year. Overseas fund managers bought about $435.1 million of Philippine stocks while they sold a net $113.2 million of shares in Thailand, according to data tracked by Bloomberg.
In Malaysia, foreign investors had withdrawn 1.36 billion ringgit ($430 million) from the nation’s stocks as of June 3, according to data provided by the Kuala Lumpur stock exchange.