SET chief allays fears of Thai bourse plunge

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BANGKOK, June 11 – The plunge in the Thai stock index today was in tandem with the region, according to the Stock Exchange of Thailand (SET) president.

Charamporn Jotikasthira said the sharp decline spread over the region, especially in the TIPS group – Thailand, Indonesia and the Philippines – which saw a drop by 4.97, 3.5 and 4.67 per cent respectively.

The SET index closed down 75.92 points or 4.97 per cent to close at 1,452.63 points on Tuesday.

Allaying investors’ anxieties over the nosediving stock, he said the fundamentals of listed companies in Thailand remain strong and attractive for investment.

He called on investors to closely monitor liquidity in light of foreign investors’ massive withdrawal of investment from the stock and bond markets which has weakened the baht from Bt30.79 against the dollar to Bt30.93 against the dollar.

He ruled out any relationship between the domestic political situation and the unfavourable stock index.

Other factors leading to the stock index plunge were S&P’s adjustment of the US economy from negative to AA+ and China’s disappointing exports.

Foreign investors sold Thai stocks at a Bt22.713 billion during June 1-10 and Bt43.806 billion during January 1-June 10.

Kavee Chukitkasem, Kasikorn Securities vice president, admitted that today’s index plunge was harsh and way below the fundamentals.

He said Thai stock will remain volatile for the next three months and it is possible that the index may drop below 1,400 points, or a PE ratio at 12, in Q3 when Thailand encounters phenomena including the government’s controversial rice pledging scheme, Moody’s Investors Service’s possible credit-negative report on Thailand and the Constitution Court’s ruling on the proposed constitutional amendment.

He said the Thai bourse should improve in Q4 after clarity on quantitative easing while Thailand’s economic fundamentals are still strong.

Thai listed companies should grow 15 per cent this year and 10 per cent next year while the SET index is targetted at 1,700 points at the end of this year, an adjustment from the previous forecast at 1,900 points, he said.