Thai stocks dive in global sell-off

Thai stocks dive in global sell-off

SET index tipped to become bear market

Thai shares are heading towards a bear market after falling by 4.73% yesterday as the deepening global equities rout, concerns over an imminent US interest rate hike and the Chinese-led economic slowdown fuelled a continuing exodus from risky assets.

Securities analysts warn the correction could continue and the main gauge could slip below 1,300 points.

The Stock Exchange of Thailand (SET) index started the day on a sour note, while the selling spree intensified in late trade before the market closed at the day's trough of 1,301.06 points after a 64.55-point fall in heavy trade worth 60.5 billion baht.

The tumble took this year's slump to 19.7% from a high of 1,619.77 points on Feb 4. A bear market occurs when stock prices fall by more than 20%.

Blue-chip companies led by energy and petroleum stocks were at the centre of the selling pressure after oil prices fell by more than 4% to a six-and-a-half-year low.

National oil and gas firm PTT plunged 9.43% to 240 baht, Siam Cement (SCC) tumbled 6.3% to 476 baht, PTT Global Chemical (PTTGC) sank 6.64% to 49.25 baht, Airports of Thailand (AOT) dipped 4.15% to 254 baht, and Kasikornbank (KBANK) slid 5.22% to 163.50 baht.

Foreign investors yanked 4.78 billion baht out of the Thai market yesterday, raising their net sales to 76.1 baht billion this year.

The Shanghai Composite index led yesterday's rout, plummeting 8.46%, while the Philippines' PSE Composite index shed 6.7%, the Bombay Sensitive 30 index dived 6.11%, the Hang Seng index plunged 5.17%, and other Asian bourses dipped 2-4%.

The sell-off also weakened the baht to 35.75/35.77 to the US dollar from last Friday's 35.63/35.65.

Newly appointed Finance Minister Apisak Tantivorawong blamed the sharp fall in the Thai stock market on external factors.

"This is an era of globalisation, and the impact does not emerge in the Thai stock market alone," he said, adding that stimulus measures to be introduced by new economic ministers should improve sentiment.

Bank of Thailand spokesman Chirathep Senivongs Na Ayudhya said the correction in the stock market could be foreseen, as it was in accordance with that of global markets.

"Assessment of the overall effect on the economy has to be cautious regarding short- and long-term impacts," he said.

"Too much weight should not be put on a single factor, especially how the stock market adjustment is sensitive towards short-term volatility."

Tisco Securities chief executive Paiboon Nalinthrangkurn said three key factors jolting Thai shares were Wall Street's sharp fall, worries over China's cooling economy and tumbling commodities prices.

Investors were concerned China's slowdown will also dent growth of export-dependent countries, he said.

"Thailand's economy remains strong, but its growth is still tepid. New economic ministers bring new hope. If they can push infrastructure projects and accelerate government spending, consumption will be boosted eventually," Mr Paiboon said.

Mayuree Chowvikran, a senior analyst at Maybank Kim Eng Securities (Thailand), said panic sales of energy, petrochemical, banking and property stocks were seen globally and added: "Investors should wait and see."

Therdsak Thaveeteeratham, an executive vice-president of Asia Plus Securities, said the SET index might fall to between 1,280 and 1,290 points, and there were no signs of capital inflows to reverse it.

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