Rising SET bucks Asian trend

Thai stocks gained 0.5% on Friday even as most markets fell on news that deflation continued to haunt Japan.

  • Published: 26/04/2013 at 04:59 PM
  • Newspaper section: breakingnews

The Stock Exchange of Thailand Index rose 8.68 points to close at 1,582.93, an increase of 2.4% from the previous Friday's close of 1,545.46. Turnover was 54.54 billion baht, with 8.8 billion shares traded.

The local market, back in sight of 1,600 after a precipitous decline earlier in the month, is up 13.7% from the end of 2012.

Good first-quarter results from listed companies have fuelled recent gains despite concerns about the impact of a strong baht on exports.

Foreign investors were net buyers on Friday of 2.74 billion baht worth of Thai shares. Local institutions were net sellers of 9.7 million baht and brokers sold 105.8 million. Individual investors were net sellers of 2.63 billion baht. 

For the year to date, foreign investors have bought 16.2 billion baht more in Thai shares than they have sold.

World stock markets fell on Friday after Japan reported an unwelcome drop in consumer prices despite aggressive attempts by the central bank to attack nagging deflation.

The Nikkei 225 in Tokyo slipped from a five-year high after Japan's consumer price index fell 0.9% in March from a year earlier.

The result flies in the face of efforts by Prime Minister Shinzo Abe, who took office in December vowing to reverse a long bout of deflation that has crippled economic growth.

The Nikkei, which in the morning hit its highest intraday level in five years at 13,983.87, fell 0.3% to close at 13,884.13.

In early European trading, Britain's FTSE 100 was down 0.3%, Germany's DAX shed 0.3% and France's CAC-40 lost 0.7%. Wall Street also appeared headed for losses, with Dow Jones industrial futures falling 0.2% to 14,627.

The US Commerce Department later Friday was scheduled to release first-quarter economic growth figures.

"A solid GDP figure out of the US should give markets a boost," said Daniel Martin of Capital Economics in Singapore.

Elsewhere in Asia, Hong Kong's Hang Seng rose 0.7% to 22,547.71. Australia's S&P/ASX 200 slipped 0.1% to 5,097.50. South Korea's Kospi fell 0.4% to 1,944.56. Benchmarks in mainland China and India also fell.

In Bangkok, the SET50 index of blue chips ended at 1,044.82 points, up 5.36 points, with total trade value of 30.31 billion baht. The SETHD index of high-dividend shares rose 1.73 points to 1,242.93, with turnover of 9.67 billion baht. The Market for Alternative Investment gained 2.42 points to 494.94, with transaction value of 2.03 billion baht.

The five most active shares by value were the 7-Eleven operator CP ALL, rising 2.75 baht to 43.75; Bangkok Land (BLAND), up 4 satang to 2.00 baht; CPF, up 1.25 to 31.25 baht; MAKRO, unchanged at 750 baht following news earlier this week of its acquisition by CP All; and the telecom company Jasmine International (JAS) down 20 satang to 8 baht.

In the currency markets, the baht completed its worst week since December 2006, depreciating 2.6% on concern that policymakers will intervene in the currency market as pressure increases to arrest the rise of Asia's best-performing currency.

Markets reacted strongly after Areepong Bhoocha-oom, the permanent secretary for the Finance Ministry, said the ministry may adjust conditions on the purchase of government bonds, without providing details.

"Because of the rhetoric, the market is on the lookout for possible controls on capital flows," said Sim Moh Siong, a currency strategist at Bank of Singapore. "If anything, those will be mild measures aimed to slow inflows rather than to stem the inflows altogether."

The baht was trading late Friday in Bangkok at 29.33/39 per dollar, compared with 29.08/12 on Thursday and 29.61/65 a week earlier.

The baht touched 28.56 on April 22 and April 19, the strongest level since the floating of the currency in July 1997 sparked the Asian financial crisis.

Finance Minister Kittiratt Na-Ranong and central bank Governor Prasarn Trairatvorakul have said there is no need to impose controls to stem inflows.

However, the Bank of Thailand said on Thursday that its board had approved a plan to allow foreign-exchange reserves to be invested in bonds issued by state agencies overseas.

Brown Brothers Harriman and Morgan Stanley said in research notes on Friday that the baht has more room to weaken. Morgan Stanley expects a depreciation to 29.50 per dollar in the short term.

"Foreign-exchange intervention and more regulatory measures are likely should the baht continue to strengthen, though we doubt more draconian measures will be introduced," Brown Brothers' London-based currency strategist Ilan Solot wrote.

Canada's Bank of Nova Scotia, meanwhile, predicts the baht will weaken to 30.40 by the end of June.

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