Thailand's currency rallied on Wednesday after the finance minister set an optimistic tone for the country's growth for the next year and said the government would discuss more stimulus measures, while electronics firm Delta pushed stocks higher.
The baht gained as much as 0.4% against a firm greenback while equities in Bangkok jumped 1.3%. Taiwanese electronics manufacturer Delta Electronics' Thailand affiliate was among the top gainers on the country's benchmark index, rising up to 6% and hitting a record high. Delta Electronics Thailand had in late October posted quarterly earnings which were seen as upbeat by the market. Its shares have since gained more than 30%.
Poon Panichpibool, markets strategist at Krung Thai Bank, said Delta has been gaining on the back of strong earnings momentum, but flagged concerns around the stock being overvalued. Delta's current valuation looks demanding in terms of a forward price-to-earnings ratio when compared to technology peers and even its parent, analysts at TISCO Securities said.
Panichpibool attributed the baht's gains to the "optimistic" growth outlook by Thailand Finance Minister Pichai Chunhavajira, but the strategist remained worried over the effects of a possible trade war once Donald Trump goes back to the White House.
Thailand's finance minister reaffirmed economic growth expectations of 2.7% for the year, adding that he wants to see gross domestic product growth at 3.5% for 2025, higher than Bank of Thailand's near 3% estimate.
Among other equity markets, Indonesian stocks pared gains after rising 0.7%, led by coal conglomerate Adaro Energy . Adaro gained 5% a day after it expressed plans to spin off unit Adaro Andalan in an IPO.
Currencies in the region were mostly mixed, with the Malaysian ringgit falling 0.5% on market forecasts that economic growth will slow in the third quarter. The Singapore dollar was 0.1% lower while the Philippine peso and Indonesian rupiah were flat.
"The fundamental backdrop for EM appears benign for now, but the sequencing and magnitude of potentially disruptive Trump policies could inject volatility," Barclays analysts said in a note.
"Rates may need more premium and EM FX should weaken further, but we expect more near-term gains in EM credit," they said.
Stock markets in emerging Asia were mostly downbeat, with equities in Mumbai, Philippines and Taiwan dragging 0.7%, 0.5% and 0.5%, respectively.
HIGHLIGHTS:
** Samsung Electronics shares hit 4-year lows on Trump risks, AI chips
** Thai finmin eyes 2025 GDP growth of 3.5%, plans more stimulus
** Flights cancelled to and from Indonesia's Bali due to volcanic ash - Reuters
