The Thai stock market fell after hitting a 19-year high Friday, while the baht weakened on renewed euro-zone anxiety following a proposed Cyprus tax on deposits.
The Stock Exchange of Thailand warned retail investors in particular over an abrupt reversal of capital inflows to Asia including Thailand if the central banks of advanced economies signal they are winding down their monetary easing, said Pakorn Peetathawatchai, SET executive vice-president. A levy on bank savings required by the EU in return for a bailout deal for Cyprus has rattled global stock markets as investors were worried that such a tax could trigger bank runs across Europe and further destabilise the financial system.
The stock exchange was concerned that new investors may be adversely hurt if the market dipped, as the bull run was largely attributed to gains in small to mid-market cap stocks, which are highly volatile.
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