Thailand ends nine-month outflow streak as investors return to Asia amid easing US trade tensions
Taiwan recorded its strongest monthly foreign inflow since the 2008 global financial crisis in July, drawing US$7.78bn as global investors continued to target Asian tech exporters amid rising AI-related investment.
Reuters reported that South Korea followed with US$4.52bn in inflows—its highest since February 2024—as both markets recorded their third consecutive month of net gains.
Together, Taiwan and South Korea attracted US$25.7bn in foreign capital over the past three months.
Investors cited favourable conditions for AI exposure, strong corporate fundamentals, and in South Korea’s case, shareholder-friendly reforms and political stability as contributing factors.
July’s rally pushed benchmarks in Taipei and Seoul up roughly 6 percent each, while the MSCI Asia ex-Japan index rose 2 percent, marking a fifth straight month of gains.
Thailand broke its nine-month streak of foreign equity outflows, recording US$499m in net buying in July. The inflow followed a prolonged selloff that had pushed Thai valuations down.
The country’s benchmark SET index rose 14 percent in July — its best monthly gain since November 2020 — though it remains 10 percent lower for the year.
Despite this rebound, concerns persist.
Kenneth Tang, senior portfolio manager at Nikko Asset Management, said the firm remains cautious and underweight on Thailand, citing “high household debt, limited government spending, an uncertain political environment, and external negative events such as the conflict with Cambodia.”
He added that resolving these issues would “clear up the path for its recovery.”
Meanwhile, India saw the sharpest outflow in the region in July, with over US$2bn in net foreign sales — the highest monthly outflow since February.
This reversed a three-month streak of net purchases.
Reuters also reported that Indonesia and the Philippines posted outflows of US$570m and US$29m, respectively
Vietnam attracted $326m in foreign investment during the month, with investor interest rising after the country secured favourable tariff terms with the United States.
Despite broader market challenges, foreign inflows into Asian equities have stabilised in the past three months.
This follows improved trade arrangements with the United States, which have reduced tariff-related volatility and helped calm financial markets.
