Thai Finance Minister Korn Chatikavanij on Thursday dismissed doubts by the
anti-government red shirts the government bought shares with taxpayers’
money to help the stock index to rise throughout the week despite protests.
Finance Minister Korn Chatikavanij.
“It’s not the government’s policy to use the state budget
or taxpayers’ money to intervene in the stock market,” Korn said, adding
that the government is required by law to seek approval from the Parliament
before spending from the budget.
He said the continuous gains in the stock market were
partly due to eased investor concerns as the red shirted anti-government
protest has been mostly peaceful. Moreover, stronger operating results of
listed companies, and the improving economy as well as the government’s
policy implementation in tackling the economic problems were also attributed
to the gains.
Korn’s clarification came after a group of red-clad
demonstrators rallied at the Stock Exchange of Thailand (SET) seeking a
clear-cut explanation from SET executives over the stock surges.
Meanwhile, Patareeya Benjapolchai, SET president, issued
a statement saying Thailand’s strong economic fundamentals and favorable
external factors helped push the index up over the week.
She explained that Thailand’s gross domestic product
expanded 5.8 percent in the final quarter of last year compared with the
same period in 2008, while earnings of Thai listed companies soared 42
percent in 2009. In addition, recommendations by Morgan Stanley this week to
overweight Thai stocks also helped lift the market.
Moreover, liquidity in capital markets remains high and
the US Federal Reserve signaled that interest rates would remain low for the
time being to support the economic recovery, so foreign investors look to
invest in emerging markets for better returns, particularly in Asia, which
has stronger economic fundamentals than European countries, said the Thai
bourse chief.
Mrs. Patareeya said foreign investors were net buyers of
Bt32 billion from February 22 to March 17 as they remain confident that the
red shirt rallies will not significantly weigh down the economic recovery.
Mayuree Chowvikran, senior vice president of the KimEng
Securities (Thailand) Research Department said the index lost ground last
Thursday for the first time in seven days thanks to profit taking by
investors and in line with the downward trend in regional markets and
markets in Europe. (TNA)
