Friends or Foes? Foreign Investors in the Thai Stock Market During 1994-1998

Chayawadee Chai-anant
Additional contact information
Chayawadee Chai-anant: Bank of Thailand

No 2003-08, Working Papers from Monetary Policy Group, Bank of Thailand

Abstract: This paper investigates foreign investors’ behaviors in the Thai stock market during the late 1990s. The statistical data demonstrates the difference in trading behaviors of foreigners relative to other groups of investors. During the crisis, local investors were discouraged and their market participation fell while the foreigners remained present as net buyers. Market-timing tests reveal abilities of foreign investors in forecasting market returns, resulting in their relatively high wealth holdings compared to other investors. In addition, the information analysis suggests evidence revealing different behaviors of investors in response to publicly available new. Foreigners purchase from lacal investors in response to good news. The last set of evidence from VAR analysis implies positive feedback trading behaviors of foreign investors but recover no sign of market destabilization. Despite the fast that a fall in foreign net purchases may contribute to a decline in stock market index in the late 1996, foreign net purchases help prevent a deeper decline of the market in 1997.

Keywords: Asian crisis; foreign investors; stock market; market timing; positive feedback trading (search for similar items in EconPapers)
Pages: 57 pages
Date: 2003-09
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.bot.or.th/Thai/EconomicConditions/Publi ... 3chayawadee_thai.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.bot.or.th/Thai/EconomicConditions/Publication/DiscusPaper/DocLip_discussion/dp042003chayawadee_thai.pdf [301 Moved Permanently]--> https://www.bot.or.th/Thai/EconomicConditions/Publication/DiscusPaper/DocLip_discussion/dp042003chayawadee_thai.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bth:wpaper:2003-08

Access Statistics for this paper

More papers in Working Papers from Monetary Policy Group, Bank of Thailand Contact information at EDIRC.
Bibliographic data for series maintained by Pornpinun Chantapacdepong ( this e-mail address is bad, please contact ).