SET In Worst Fall Since 9/11

[george]

PLUNGE AT THAI BOURSE: SET in worst fall since 9/11

Oil prices, possible rate hike blamed

BANGKOK: -- The Thai bourse yesterday experienced its worst single-day loss since the September 11 terrorist attacks, dropping almost 5 per cent, as global equities slumped.

Sensitivity to high oil prices and interest rates resulted in big-cap stocks accounting for most of the Stock Exchange of Thailand (SET) casualties.

Siam Cement was the most active stock, shedding Bt13 - or 6.3 per cent - to close at Bt193.

Trailing behind were Bangkok Bank, down 3.8 per cent); PTT, down 3.4 per cent; Airports of Thailand, 5.7 per cent; and Siam Commercial Bank, down 4.4 per cent.

With combined market capitalisation of around 25 per cent, the five stocks dragged the SET Index down to the 605.62-point level, a loss of 31.18 points - or 4.9 per cent.

It was the biggest percentage plunge since the 6.7-per-cent drop on September 13, 2001, in the wake of the terrorist attacks in New York and Washington.

Stock analysts placed the blame on last weekend's unexpected hike in world oil prices and better-than-expected jobless figures in the US, which might prompt the US Federal Reserve Board to jack up interest rates sooner than anticipated.

These factors compounded existing negative sentiment stemming from on-going violence in the South and uncertainty over the Chinese economy.

"The unclear oil-price movements as well as the possibility of an early US rate hike encouraged foreigners to sell in all markets,'' said Sasikorn Charoensuwan, an analyst at Phillip Securities (Thailand).

"They don't care what business the companies are in. They just care about taking money home."

Foreigner investors were net sellers yesterday, selling shares worth Bt5 billion - or a quarter of market turnover of Bt21 billion.

The SET was not the only market to suffer yesterday, with all Asian markets plunging following the 123.92-point (1.2 per cent) nosedive in the Dow Jones Industrial Average on Friday.

Asia's worst performer was South Korea, with the Korea Composite Stock Price Index falling 48.06 points, or 5.7 per cent.

Jakarta lost 36.42 points (4.9 per cent) while Tokyo's Nikkei Stock Average fell 554.12 points (4.84 per cent).

In Thailand, the five hardest-hit sectors were chemicals, entertainment, finance, transport, building, and property.

"Rate hikes will effectively put a brake on demand. Every percentage point of an interest hike will increase the monthly mortgage burden by 8 per cent," Nomura Securities analyst Sukit Udomsirikul said.

Despite negative sentiment, which could drive the SET Index below the psychological 600-point barrier, Sasikorn said it was a good time to buy Thai stock.

"They have been so cheap, with a market price-equity ratio of nine times. You can't find stocks that cheap anywhere," the analyst said.

--The Nation 2004-05-11

[dr_Pat_Pong]

Dive, dive, dive. Like a greased manhole cover.

[george]

MONDAY’S MINI-CRASH: Hedge funds to blame: SET

Buying by state fund lifts market 2% yesterday

BANGKOK: -- The Stock Exchange of Thailand, which recovered some lost ground yesterday, suffered a mini-crash on Monday at the hands of profit-taking international hedge funds, said SET president Kittiratt Na Ranong.

“Hedge funds’ investment cycle is shorter than ever. When they make enough profit and see any bad factor coming onto the market, they will sell out stocks to hold cash instead,’’ he said.

“This has become a normal phenomenon, especially in emerging markets.”

Kittiratt said half the foreign investment in the bourse belonged to hedge funds, which bought when the market was cheap, while the other half belonged to long-term investors.

With the economy on an uptrend, he said he was convinced hedge funds would soon return, although that would only come when negative sentiment disappeared, including violence in the South.

The SET Index on Monday plunged 31.18 points, or 4.9 per cent, with heavyweights the worst casualties.

The index recovered slightly yesterday, gaining 12.48 points to close the day at 618.10 points on turnover of Bt23.88 billion.

Stock analysts attributed the gain to local buying, in line with an unconfirmed report that the Vayupak Fund has increased its position in the bourse from Bt1 billion at the end of last month to Bt3-Bt4 billion at present.

A Finance Ministry source told Reuters that with stocks becoming “so cheap”, it was a good opportunity for the fund to invest in the stock market.

“The [Vayupak] investment could be raised to Bt10 billion soon,” the source said. The fund has some Bt30 billion in liquidity.

“There is a lot of room for us [the Vayupak Fund] to enter the market now. This is the right time to do so,” the source said.

On Monday foreigner investors were net sellers, offloading shares worth Bt5 billion – or a quarter of the market’s Bt21-billion turnover.

It continued what’s been a year-long trend, with foreign investors selling Bt50 billion in shares since the start of the year – or roughly 20 per cent of combined turnover.

Market jitters over the possibility of an early US interest-rate hike sent shock waves through global equity markets on Monday.

Like Thailand, most Asian markets edged up yesterday. The Straits Times Index climbed 11.61 points to 1,803.39; Jakarta rose 11.043 points to 718.261; the Hang Seng Index lifted 22.59 points to 11,508.9; while

the Nikkei jumped 22.48 points to 10,907.18.

Still performing poorly was the Kuala Lumpur Stock Exchange, which fell a further 3.28 points to 810.16.

--The Nation 2004-05-12

[OldAsiaHand]

Gee, so those nasty foreigners are victimizing poor little Thailand again, huh? How are they doing it? Ah...by buying low and selling high, it seems. Damned unethical if you ask me.

[Thetyim]

Dive, dive, dive. Like a greased manhole cover.

This posting is in the wrong place.

Should be moved to the one about Wart of the Rings

[thaimee]

How do we feel about the buying opportunities today?

Looks like I should get my shopping list Out!!

Thaimee.