SET tumbles 31.82 to 1,455.38

Thai shares suffered a sharp drop Thursday for the second time this week, sliding 2.14% on profit-taking ahead of the quarter's end and concerns over domestic factors.

Investors also blame "other events" outside the financial world as the reason for dumping stocks.

Stock analysts warned investors to brace for a steeper dip.

Investors have had this reaction all week, as lack of confidence pushed the SET index down by more than 5% in four days.

The SET index, the worst performer in Asia on Thursday, saw panic selling intensify in the afternoon session, with shares diving to the day’s trough of 1,451.46 points before closing at 1,455.38, down 31.82 points. Turnover was heavy at 81.64 billion baht.

Thursday's fall was larger than Monday's 1.9% dip. The main gauge’s loss stretched to 4.3% this week.

Thanomsak Saharatchai, head of research for KT Zmico Securities, said domestic factors weighed on market sentiment and investors regularly lock in profit ahead of a quarter's end. Shares are likely to fall further and there is no buy signal in the near term, so investors should sit on the sideline, he said.

Sukit Udomsirikul, managing director of Maybank Kim Eng Securities (Thailand), said the SET could test the 1,450-point support level before bouncing back.

Sombat Narawuttichai, secretary-general of the Government Pension Fund (GPF), said the state pension fund has no plan to re-allocate its investment portfolio despite the slide in Thai shares. GPF investment in Thai shares yielded around 4% in return, exceeding its target, he said.

"We expected the steep fall in Thai shares and its magnitude is smaller than we anticipated," said Mr Sombat.

EARLIER REPORT

The Stock Exchange of Thailand main index continued to tumble 2.14%, or 31.82 points to 1,455.38 on Thursday.

Total trading value was 81.64 billion baht, with 16.61 billion shares changed hands.

SET50 index dropped 1.65%, or 15.57 points, to 927.82 in trade worth 51.28 billion baht.

MAI sank 4.22%, or 23.71 points, to 538.62 in transactions worth 3.76 billion baht.

Small investors bought a net 2.46 billion baht, followed by foreigners (626.14 million) and brokers (148.45 million). Institutional investors sold a net 3.24 billion baht.  

Year-to-date, foreigners were net buyers of 118.45 billion baht, followed by brokers (18.3 billion). Small investors were the biggest sellers, at 94.24 billion baht, followed by institutional investors (42.51 billion). 

Kasikorn Securities pointed to a clearer trend of an inflow shift from Southeast Asia, especially Thailand, Indonesia and the Philippines, to developed markets in North Asia such as Japan, Taiwan, South Korea and Hong Kong, due to high valuations.  

"The SET now has the PER (price-to-earnings ratio) of 16 times while the Philippine Stock Exchange has 19.5 and the Jakarta Stock Exchange 17.7 so there is a high possibility the selling will continue. By comparison, Nikkei's PER is 16 times, Taiwan 14.9 times, Hang Seng 13 times and South Korea 11.7 times," the broker said in a note to investors on Thursday.

Elsewhere in Southeast Asia, most stocks were trading largely lower, in line with Asian peers, as investors waited for clarity on further easing steps and where key policy rates are headed when the European Central Bank meets later in the day.

The ECB is expected to keep policy rates unchanged, but is likely to take further stimulus measures by extending its asset purchase programme by the end of this year, according to a Reuters poll. 

Broader Asian shares dropped after four days of gains which took them to their highest since late July last year. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3% at 0500 GMT.

Investors also shrugged off data showing China's August exports fell less than markets had expected, while imports unexpectedly expanded for the first time in 22 months.

The Philippine market rose marginally after falling to its lowest in over 2 months in early trade. Financials and telecom stocks climbed, with SM Prime Holdings Inc rising 1.5% and PLDT Inc gaining 1.4%.

Singapore fell 0.4%, dragged down by financials and consumer staples, while Vietnam rose marginally. Indonesia and Malaysia were flat.