Thailand ends 9-month outflow streak as Asia stocks rally

Foreign investors poured money into Asian equities for a third consecutive month in July, with Taiwan recording its highest inflows since 2008 and Thailand breaking a nine-month streak of outflows. Investment sentiment was boosted by improved trade relations and optimism driven by AI.

Taiwan and South Korea led the region, drawing $7.78 billion and $4.52 billion respectively, according to LSEG data. Both markets rallied around 6%, driven by surging interest in AI-related tech stocks. Combined, they attracted $25.7 billion over the past three months.

South Korea benefited from political stability, corporate strength, and pro-shareholder reforms. However, recent tax policy uncertainty could challenge future inflows. Thailand, meanwhile, saw $499 million in net foreign buying, lured by discounted valuations following heavy selling.

Despite the strong rebound, Thailand’s political instability, high household debt, and currency strength continue to weigh on long-term sentiment. Its SET index jumped 14% in July but remains down 10% for the year.

India faced the heaviest outflows, losing $2 billion in July. Indonesia and the Philippines also saw withdrawals, while Vietnam bucked the trend, attracting $326 million due to solid US trade arrangements.

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