China, oil worries weigh on Thai shares

China, oil worries weigh on Thai shares

Energy, petrochemical stocks lead the losses

A man walks past the new office of the Stock Exchange of Thailand on Ratchadaphisek Road. Thai shares have slipped just above 4% since this year's first trading day. PATIPAT JANTHONG
A man walks past the new office of the Stock Exchange of Thailand on Ratchadaphisek Road. Thai shares have slipped just above 4% since this year's first trading day. PATIPAT JANTHONG

Thai shares resumed their sell-off yesterday, weighed down by deepening worries over China's economic health and oil prices sinking to a 12-year low.

After enjoying some minor relief last Friday when the Stock Exchange of Thailand (SET) index gained back 1.58%, the main gauge yesterday dipped from the opening bell.

The selling pressure intensified in the early afternoon, sending the index into a nosedive of 1.87% to the day's trough of 1,220.96 points before buying on the dip emerged and erased some losses.

The broader index closed down 0.78% to 1,234.5 points in moderate trade worth 36.6 billion baht.

Energy and petrochemical stocks led the losses yesterday, while bargain hunters piled up telecom stocks following the recent steep falls. PTT declined four baht or 1.86% to 211 baht, Siam Cement (SCC) 1.42% to 416 baht and PTT Exploration and Production (PTTEP) almost 3% to 48.75 baht.

Thai shares have slid just above 4% since the first trading day this year.

Stock investors' expectations for the next three months have fallen considerably due largely to growing concerns over the global economy, said Voravan Tarapoom, chairwoman of the Federation of Thai Capital Market Organizations (Fetco).

The Fetco Nida Investor Confidence Index for the three months to March dropped to 73.46 points from 89.42 in the previous survey.

Foreign investors' sentiment deteriorated the most to 33.33 points, entering extremely bearish territory.

The confidence of local institutional investors remained in neutral terrain, although the subindex fell to 90.91 points from the previous survey.

According to the confidence measurement, a figure below 80 points is bearish, 80-120 neutral and more than 120 bullish.

Health care is the most attractive sector and information and communications technology the least interesting.

Mrs Voravan said the SET had summoned brokers and mutual fund companies to discuss the stock market's direction in an informal meeting.

They agreed the local bourse would stabilise for a while, and it was a good opportunity for those who had cash in hand to snap up shares gradually for long-term investment.

The meeting also agreed that foreign investors would continue to dump Thai shares, and the magnitude of their sell-off would be eased significantly from their holdings here being minimal.

In the meantime, Kittikun Tanaratpattanakit, senior analyst at Morningstar Research (Thailand), said trigger funds with a combined fund-raising of 30 billion baht through initial public offerings (IPOs) last year failed to hit return targets.

Last year alone saw 103 trigger funds issued, hitting a record high in terms of numbers, but they managed to raise only 39 billion baht in IPOs compared with 45 billion from 93 trigger funds launched in 2014.

Only 29 of the trigger funds with a combined capital-raising size of 9 billion baht managed to redeem last year after they hit return targets, while the rest flopped.

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