Record trading despite SET plunge, recovery

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Record trading despite SET plunge, recovery
The Nation

Turnover tops Bt102 billion as oil price continues to fall; authorities opt not to intervene after domestic rumour

BANGKOK: -- Thai authorities opted to stay on the sidelines despite a roller-coaster ride in the stock market yesterday, which closed with a record turnover in the exchange's 40-year history.

Turnover for the first time hit Bt102.66 billion, the highest since the Stock Exchange of Thailand was set up in 1975. Thai shares opened lower in line with regional bourses, then fell in tandem as oil prices were near a five-year low. Finance Minister Sommai Phasee also attributed the fall to an unspecified domestic rumour.

At one point, the SET index nose-dived 138.95 points - just over 9 per cent - to hit a seven-month low. The index staged a strong rebound later, to close at 1,478.49 - down 36.46 points or 2.5 per cent from Friday's trading. Domestic investors were net buyers of Bt7.58 billion while other types of investors were net sellers. Analysts were caught off-guard, as most did not anticipate such a steep fall. The index has fallen for six straight days.

Sommai insisted that the country's economic fundamentals were unchanged and strong, and there was no need to come up with measures in response to the situation. "Over time, the stocks will rise along with the mechanisms of the market," he said.

Stock Exchange president Kesara Manchusree also said there was no need to formulate measures to support the capital market at the moment despite the index's continued decline.

Kesara said it should be left to the market to stabilise itself after oil fell below US$60 (Bt2,000) per barrel.

She said investors should choose stocks that would benefit from falling oil prices such as shares in airlines and logistics companies. Low oil prices should boost the Thai economy next year, she said.

Prime Minister General Prayut Chan-o-cha said the SET's sharp drop was a reaction to the world oil situation and the external conflict factors.

"The stock price does not only rise. There will be both ups and downs," he said. "Some people must suffer from investing in stocks. To reduce the risk, investors should not borrow money to buy stocks."

Plunge in price of crude blamed

The slide in Asian markets came after crashing oil prices dragged US stocks to one of their worst losses of the year on Friday.

The Dow Jones Industrial Average fell 1.8 per cent and the S&P 500 tumbled 1.6 per cent. It was the S&P 500's first weekly loss in nearly two months and its worst single-week decline - 3.5 per cent - since May 2012.

Lower oil prices benefit consumers, but traders have been unnerved by the speed of the free-fall in crude prices, which could put projects on hold in the oil sector and hurt energy companies and banks.

In Thailand, the banking and energy sectors make up more than a quarter of the exchange's market capitalisation.

Over the past five trading days, the SET Index has lost 8.2 per cent. That is well below the expected 2015 price-earnings ratio.

Suffering the most were stocks in the energy, communications, banking, retail, property and food sectors.

"LTF [long-term equity funds] and window dressing are now the last hopes," Asia Plus Securities said in a research note.

"The market slump should encourage more investment into LTF, and window dressing at the end of the year should also be more active.

"In eight of the past 10 years, the SET Index gained an average 2.6 per cent in the past two weeks of the year."

The index could reach 1,438 points, the securities house said.

An analyst at Kasikorn Securities said the fall of the index yesterday was due mainly to a sharp decline in energy stocks, which weighed about one third of stock market.

Source: http://www.nationmultimedia.com/business/Record-trading-despite-SET-plunge-recovery-30249917.html


-- The Nation 2014-12-16

[wabothai]

May be just everybodybtrying to sell. Now the thing is who is buying ?

[wabothai]

By the way I know little about the stock market, and I don't want to know.

[elgordo38]

May be just everybodybtrying to sell. Now the thing is who is buying ?

Its to early for the big boys to buy. First they must make money shorting the market on the way down.

[timendres]

Most major moves in any market require volume. And with the market at record highs, it is quite likely that there was a long string of stops being run. What is interesting here is the mention that domestic investors were net buyers, and other types of investors (read foreign investors) were net sellers. This is classic smart money selling into dumb money, which suggests there is further downside.

The protests and military coup did not seem to scare off foreign investors, but $60 oil suggests economic slowdown in the developed economies -- meaning exports down, and tourism down, which would be a major blow to Thailand's economy. Combine that with a strong dollar, and bond market manipulation by the central banks (BOJ has lost it's mind for instance), and there is also a fear of another looming currency crisis.

I suspect that worries about the King's health has put the final nail in the coffin. The transition forward of the Royal Family is a major concern for the west with regards to Thailand. It seems quite clear that all the major players, foreign and domestic, are positioning for what appears to be a (sadly) fast approaching inevitability. I truly sympathize with the difficult transition Thailand will need to manage.

"Analysts caught of guard"? What a joke! They should just paint shocked over all of their faces, because they are perpetually wrong.

I would recommend following the smart money and selling into rallies.

[rickirs]

Thailand's newest trading partner Russia has its economy in a death grip. Maybe Gen. Prayuth will go to the North Koreans next. Maybe he can trade rice for some "indentured" citizens for Thailand's fishing industry.

[Ludacris]

Most likely a lot of the local buying was lft/rmf contributions which must be done by the end of the year.

I wouldn't consider taking advantage of the recent drop for tax savings to be 'dumb money', especially when thinking long-term.