JPMorgan Chase & Co recommended investors buy the Thai baht and New Taiwan dollar on expectations that foreign direct investment will help buoy demand for assets.
The Thai government and Taiwan's top economic planner expect higher foreign investment, helping bolster economic growth.
Thailand's SET index of stocks has climbed 10 percent this year and the TAIEX index has risen 2 percent this month.
"Corporate earnings should improve consequently as the investment cycle improves," Claudio Piron, head of Asian foreign-exchange research at JPMorgan in Singapore, said in an interview.
"That will attract foreign inflows, helping asset markets and Asian currencies." The Thai baht traded at 38.52 at 10:40am in Bangkok and the New Taiwan dollar was at NT$31.538 versus the US currency.
The baht may strengthen 7.1 percent to 35.80 by the end of the third quarter and the New Taiwan dollar will probably rise 8.4 percent to NT$28.90, Piron said.
Taiwan's economy may grow 5 percent this year, Hu Sheng-cheng (
The projection compares with a government forecast of 4.56 percent and a predicted 5.93 percent growth last year, which would be the fastest in seven years.
Increasing corporate and government investment will sustain economic expansion as the island has NT$500 billion ($16 billion) of investment from abroad, Hu said.
Chinese Petroleum Corp (
Formosa Heavy Industries Corp (台塑重工) applied to the Industrial Development Bureau for permission to build a NT$130 billion steel mill, local media reported on Jan. 1, without saying where it got the information. The company is part of Formosa Plastics Group (台塑), the nation's biggest industrial company.
Sumitomo Rubber Industries Ltd, Japan's second-largest tiremaker, has bought land from Amata Corp to build its first tire plant in Thailand, the Thai developer of industrial estates said on Feb. 15.
The Thai government expects increased foreign investment in the auto industry to boost production 37.5 percent to 1.1 million units this year from a year ago.
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