SET plunge stems from normal profit-taking, says BoT

BANGKOK, Jan 25 – A plunge in the Stock Exchange of Thailand (SET) composite index in the past few days stemmed from normal profit-taking by investors, not by any fundamental change in the country’s economic basis, according to the Bank of Thailand.

Mathee Supapongse, senior director of the BoT Domestic Economy Department, said risk factors to the economy at present are not different from what the central bank anticipated and many economic think tanks forecast earlier.

He said the sharp fall in the index late last week and early this week had probably come from normal sell-offs for profit-taking by investors.

Even so, the central bank will closely monitor the situation before the cause of the plunge is identified.

“The current economic fundamentals should not be a key factor behind the share dumping by investors. We cannot identify the cause of the SET plunge now because we have to wait for clear information first,” he said.

The BoT forecast the economy this year would grow 3-5 per cent on the assumption that the core and general inflation rates stay at 2-3 per cent and 2.5-4.5 per cent respectively, and the economic fundamentals remain strong.

Somboon Chitphentom, director of the BoT Prudential Policy Department, said the Thai economy had not yet experienced additional risk factors to the extent the central bank expected earlier.

Such factors include the slower-than-expected economic recovery of Thailand’s trade partners, international capital movement, and domestic political uncertainties.

The SET index plummeted by 42.89 to 963.68 points on Monday’s trading with a daily trade value of Bt37.4 billion. Foreign investors had a net selling of Bt4.05 billion. (MCOT online news)

-- TNA 2011-01-25

Or loss-taking

A plunge in the Stock Exchange of Thailand (SET) composite index in the past few days stemmed from normal profit-taking by investors, not by any fundamental change in the country’s economic basis, according to the Bank of Thailand.

Hmm. Perhaps the onset of demonstration season in the capital might have something to do with it, the border troubles with Cambodia and the general perception of a weak government caught once again between coloured shirts?

A plunge in the Stock Exchange of Thailand (SET) composite index in the past few days stemmed from normal profit-taking by investors, not by any fundamental change in the country’s economic basis, according to the Bank of Thailand.

Hmm. Perhaps the onset of demonstration season in the capital might have something to do with it, the border troubles with Cambodia and the general perception of a weak government caught once again between coloured shirts?

Yeah, that must explain it, since the SET is still up 100% over the past 18 months. I guess there were no demonstrations, border problems, or colored shirts in 2009/2010!

"The current economic fundamentals should not be a key factor behind the share dumping by investors. We cannot identify the cause of the SET plunge now because we have to wait for clear information first," he said.

I'm sure that clear information was mailed to BOT from the SET God this afternoon via EMS explaining in detail exactly why the SET plunge occurred today. Please standby for the BOT to post a copy of the letter. Until then, please continue to fully invest in the SET.