Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong yesterday rushed to allay jitters from the stock market's rout, saying market volatility is easing as almost all hot money has already flown out.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong speaks on Wednesday at Thailand Focus 2013.He sought to allay investor anxiety amid a sell-off in Thai stocks, saying shortterm funds have been taken out, leaving longterm funds, which can help to stabilise the capital market. SOMCHAI POOMLARD
Foreign investors' sell-off of Thai shares has waned, and they could return to snap up stocks in the coming days, he told the opening of Thailand Focus 2013, a two-day international roadshow hosted by the Stock Exchange of Thailand (SET), Phatra Securities and Bank of America Merrill Lynch.
"I have learned that almost all short-term funds have been taken out. The remainder are mainly long-term funds, and this will help to stabilise the capital market," said Mr Kittiratt.
The SET index yesterday extended its losing streak to 10 consecutive days on mounting geopolitical uncertainty over a possible US-led military strike by the West against Syria, Thailand's economic slowdown and a potential stimulus curb by the US Federal Reserve.
The main index fell sharply after the opening bell and hit the day's trough at 1,260.08 points before paring some losses to close at 1,275.76, a drop of 1.41% in brisk trade worth 53.7 billion baht.
Foreign investors pulled 3.06 billion baht out of the market yesterday, raising their net selling amount to 116 billion.
The SET index has tumbled by 12.7% over the past 10 sessions and 22.4% from the year's peak in May.
Mr Kittiratt reiterated that the Thai economy still expanded in the second quarter, by 2.8% year-on-year, while growth of 4.1% in the first half was far above the 2.6% growth in the same period last year.
Thailand's economic resilience is reflected by its credit rating, which has been upgraded to BBB+ from BBB by Fitch Ratings, he said.
Mr Kittiratt also stressed that connectivity among Asean countries is the key to capitalising on the full benefits of the upcoming single market, suggesting that infrastructure megaprojects are essential to improving logistics efficiency and transforming potential for economic growth.
Prasarn Trairatvorakul, governor of the Bank of Thailand, said foreign reserves are now sufficient to cushion against foreign exchange volatility and stressed the reserves are higher than foreign debts, especially short-term debts.
There have been some capital outflows, but the issue is not a major concern, as emerging markets have been absorbing a lot of capital inflows over the last five years and the capital reversal is normal as the US economy recovers.
As of Aug 16, Thailand's foreign reserves totalled US$172 billion with a net forward position of $23.6 billion.
Vorapol Socatiyanurak, secretary-general of the Securities and Exchange Commission, said the SEC will meet with the SET tomorrow to find out the reasons behind the stock market's steep fall.If there is no irregularity, stock regulators will not take any action, but monitoring will still be warranted, he said
The securities watchdog also supports Thai asset management companies setting up a Thailand Fund to attract Japanese investors to the Thai stock market.
Phatra Securities president Krittiya Veeraburus said foreign investors are expected to return to the Thai stock market, and the current capital outflows could be short-lived.
Foreign investors' year-to-date net sales of 116 billion baht are considered minimal compared with their holdings of 3.5 trillion baht excluding strategic partnerships.
The SET's market capitalisation yesterday amounted to 11.1 trillion baht.
Meanwhile, SET president Charamporn Jotikasthira said the number of investors at Thailand Focus 2013 hit a record 186, up from 120 last year.
He said 112 listed companies are taking part in the event _ 105 on the SET and seven on the MAI.