Despite Thailand’s stronger economic growth, fund outflows have been driven by domestic political uncertainty, higher US interest rates and rising global trade protectionism.

Foreign holdings of Thai stocks dropped to 30.8% of market capitalisation this year, near the all-time low of 30.6% recorded two years ago.

The benchmark stock market has declined by 7.6% this year, reducing the market value by 114 billion baht, while the baht has weakened about 2% against the dollar after rising nearly 10% in 2017.

Thailand, however, has adequate buffers to withstand any immediate challenges, with international reserves covering 3.5 times its short-term debts, low dependency on external borrowing, and a current account surplus of 8-9 times of GDP, Bank of Thailand Governor Veerathai Santiprabhob said last week.

Selling by foreign investors could continue until the government sets an election date and commits itself to push ahead with investment projects to rebuild overseas players’ confidence, said Prakit Sirivattanaket, vice-president of Kasikorn Securities.

Thailand has been under military rule since a May 2014 coup to end months of street protests. The junta has promised to return the country to democracy but has repeatedly delayed a general election, with most recently suggesting polls will be held by May next year.