South East Asian markets: foreign inflows boost Thailand, Indonesia

Thailand's stock market gained on Wednesday, with demand for energy shares helping it rally from a four-month low, and Indonesia hit a one-week high as foreign inflows helped boost both markets after a recent sell-off. Thailand saw a net $12.8 million in foreign buying, Indonesia $59.5 million and the Philippines $7.2 million, Reuters data showed.
"Concern over high inflation in the region is priced in now," said Harry Su, head of research at Jakarta-based Bahana Securities. "So foreigners are now buying into somewhat oversold markets." The 14-day relative strength indexes of Thailand, Malaysia and the Philippines are just above 30, Reuters data showed. Below that, a market is considered oversold.
Indonesia's index is at 45.1 and Singapore's at 52.3. Trading volumes in Thailand and Malaysia were higher than their 30-day average. Indonesia gained 2 percent, led by banks, and Singapore rose 1.3 percent, both hitting their highest close since January 19. Thailand rose 2 percent, led by heavyweight energy shares, posting its biggest gain since May 4 last year. In the previous session it had hit a four-month low after losing 7.5 percent in four days.
"But we see the market rebound being short-lived. More market corrections can be expected in the first quarter and fund flows may be quite volatile," said Teerada Charnyingyong, a senior strategist at broker Phillip Securities in Bangkok. Top energy firm PTT gained 3.7 percent, while the country's second-most-valuable firm, PTT Exploration and Production (PTTEP) rose 2.6 percent.
Before the market opened, PTTEP said its quarterly profit more than doubled. Thailand's largest integrated aromatics refinery, PTT Aromatics and Refining, jumped 5.8 percent after broker Citigroup initiated coverage of the firm with a "buy". Malaysia lost 0.4 percent, while the Philippines closed down 0.7 percent.
In terms of valuations, Singapore is trading at 13.8 times this year's projected earnings, the highest in the region and compared to all-Asia's 12.9. Thailand is trading at 11.4, lower than the 13.6 of Malaysia, 13.4 of Indonesia and 12.5 of the Philippines, Thomson Reuters StarMine data shows. Some regional analysts say the valuations are becoming attractive again after the recent fall and foreign buying may gradually pick up, but inflationary concerns may deter some.