SET falls as capital exits amid looming political uncertainty

[webfact]

SET falls as capital exits amid looming political uncertainty  

By Wichit Chaitrong
The Nation

 

Many who had joined Saturday rally posted on their social media platforms that they did not like Thanathorn but could not tolerate the double standard practice of government institutions, signalling that many more may participate in political protests next year.

 

 

The Stock Exchange of Thailand Index fell 1.54 per cent or 24.17 points to close at 1,549.74 on Monday (December 16).  

 

“Investors might be concerned about the looming political uncertainty,” said Pipat Luengnaruemitchai, assistant managing director at Phatra Securities.

 

A group of political activists announced yesterday to go ahead with a planned 'Run Against Dictatorship' campaign, starting on January 12 next year.

 

They were forced to hold the press conference at Thammasat University after police ordered owners of two venues, Foreign Correspondents’ Club of Thailand and the Royal Rattanakosin Hotel, to cancel bookings for the event.

 

Their political activity coincided with a move by popular opposition figure Thanathorn Juangroongruangkit, leader of Future Forward Party who has been disqualified as a member of parliament by the Constitutional Court. Thanathorn and his supporters held a brief protest on Saturday and vowed to continue their protest against what they described as double standard practice by law enforcement agencies, the Thai court and the Election Commission.

 

Many who had joined Saturday rally posted on their social media platforms that they did not like Thanathorn but could not tolerate the double standard practice of government institutions, signalling that many more may participate in political protests next year.

 

“Looking ahead, investors may be worried about a possible return to political chaos” said Pipat.

 

Another factor is the economic situation with growth showing signs of continuous deceleration. The current slowdown has started to affect profits of listed companies, the manufacturing sector and employment, he said. 

 

The phase one deal reached between the US and China is just a temporary truce of the trade war, he added. 

 

Investors should monitor how the world’s two largest economies will negotiate in the phase two deal, he said, in referring to the trade deal under which the US will reduce tariffs but keeping the 25 per cent import duty on Chinese products worth US$ 250 billion that started last year. Some good news is that the trade war is not escalating for now, Pipat said.

 

Before the market opened on Monday, Tisco Market Insight raised the issue of domestic political factor as key focus as well as the meeting of Bank of Thailand’s monetary policy committee on interest rate on December 18 and Bank of Japan meeting on December 19.

 

Foreign investors made net sales worth Bt4.8 billion on Monday, compared to Bt20.8 billion between December 1 to 16, and total next sales of Bt41.3 billon year-to-date.

 

Meanwhile, Ariya Tiranaprakit, senior executive vice president of Thai Bond Market Association said:" the bond market is quiet as many investors have left ahead of the year-end holidays. Moreover, the US-China trade deal has made the bond market less attractive than the equity market or gold as investors want to buy more risk assets".

 

Year-to-date, foreign investors have sold Thai bonds worth almost Bt70 billion, largely caused by the central bank cutting its key policy rate twice this year to 1.25 per cent, a very low level, she said. The rate cuts led to drops in Thai bond yields. For example, yield of 10-year maturity bond has decreased from about 2.5 per cent to 1.6 per cent , she said.

 

She pointed out that while investors have been leaving the bond and stock markets, value of the baht has remained strong. “This demonstrate that capital flows have nothing to do with the baht value, rather it is the high current account surplus that keeps baht strong,” she said.

 

According to Bank of Thailand , weighted exchange rate was Bt30.212 per dollar on Monday (December 16) compared with Bt30.346 on Monday last week

 

Thailand is expected to continue to post a large current account surplus this year, estimated to reach US$ 30.4 billion,from $28.5 billion last year.

 

The Bank of Thailand earlier warned importers and exporters to brace for a two-way movement of the baht in an attempt to sway market sentiment which heavily bets on continuous appreciation of the Thai currency.

 

Source: https://www.nationthailand.com/business/30379512

 

-- © Copyright The Nation Thailand 2019-12-17

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[Inn Between]

Either that or the "haves" are skimming their profits and leaving the regular schmucks to pay the price as regularly happens with the NYSE. 

[PatOngo]

23 minutes ago, webfact said:

“Looking ahead, investors may be worried about a possible return to political chaos”

Cue the tanks, APC's and attack helicopters!

[Colabamumbai]

Good bring the Baht down.

[mikebell]

5 hours ago, webfact said:

Investors might be concerned about the looming

dictatorship.

[hotchilli]

5 hours ago, webfact said:

Another factor is the economic situation with growth showing signs of continuous deceleration. The current slowdown has started to affect profits of listed companies, the manufacturing sector and employment, he said.

2020 is going to be a rocky year for politics.

The straw pile on the backs of the Thai citizens is reaching breaking point..

While the elite sit on their piles of money the poor end are scratching a living trying to exist one day to the next... when the line is crossed and enough is enough they will bite back.

[Eric Loh]

Stock markets are for the rich and those who can afford and not for the ordinary men and women on the streets. The rally is for them and their discontentment with the corruption in the government and the malign poor economic condition. It is worth lots more than drop in the SET. 

[phkauf]

6 hours ago, webfact said:

Year-to-date, foreign investors have sold Thai bonds worth almost Bt70 billion, largely caused by the central bank cutting its key policy rate twice this year to 1.25 per cent, a very low level, she said. The rate cuts led to drops in Thai bond yields. For example, yield of 10-year maturity bond has decreased from about 2.5 per cent to 1.6 per cent , she said.

A 36% drop in the yield of the 10-year bond would have seen the price rise by roughly the same percentage (assuming constant duration) - simple bond math. So those owning the bonds would have profited quite nicely.

That's probably why investors sold Thai bonds, since at the current yield (high bond price) there's not a lot of room for more gains. It's actually a home run trade - price appreciation on the bond and currency appreciation on the baht over the year.

[Golden Triangle]

8 hours ago, webfact said:

Many who had joined Saturday rally posted on their social media platforms that they did not like Thanathorn but could not tolerate the double standard practice of government institutions,

I call BS on this statement, or can The Nation back up this claim with physical evidence, I very much doubt it.

[Golden Triangle]

On 12/17/2019 at 5:02 AM, Golden Triangle said:

I call BS on this statement, or can The Nation back up this claim with physical evidence, I very much doubt it.

I think today's story on the main forum board spells it out quite nicely actually, the Nation Media group or whatever they call themselves invited the current (illegal) leader of the kingdom to a dinner last night and actually let him make a speech, guess we now know what side their bread is buttered on eh. 

[Okis]

2 hours ago, Golden Triangle said:

I think today's story on the main forum board spells it out quite nicely actually, the Nation Media group or whatever they call themselves invited the current (illegal) leader of the kingdom to a dinner last night and actually let him make a speech, guess we now know what side their bread is buttered on eh. 

Take a look at the nation media's articles during coups and the border clashes with Cambodia and you will see what they are.