SET: Nothing unusual behind sell-off
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SET: Nothing unusual behind sell-off

President blames panic for wild stock swings

The Stock Exchange of Thailand says it found no irregularities in Monday's stock plunge as battered Thai shares Tuesday extended their six-day skid.

The recent drop in the Thai bourse could be put down to panic selling, SET president Kesara Manchusree said, adding that algorithmic trading - a system that uses advanced mathematical models to make transaction decisions - contributed minimally to local trading and was not to blame for the steep fall.

Moreover, only a small amount in forced sales took place during the recent nosedive.

"Forced sales accounted for a mere 0.1% of Monday's turnover," Mrs Kesara said Tuesday.

She urged investors to trade prudently and adhere to loss-cutting rules amid the volatile market.

The SET index on Monday posted its biggest intraday loss since October 2008, diving as much as 9.2% at one point before late-afternoon buying on the dip narrowed the gap.

An undisclosed local rumour and the tumbling oil price prompted the selling spree.

Thai stocks swung wildly Tuesday. The SET index briefly slipped to an intraday trough of 1,422.63 points, a 3.77% slump, before rebounding to close at 1,461.74, down by 1.13% from Monday's close.

Trading volume was a still-brisk 75.8 billion baht.

Other worries rattling the Thai market Tuesday included China's economic health after the release of weak December industrial data and a new low plumbed by Russia's rouble.

Mrs Kesara said investors should avoid paranoia about negative news and focus instead on market fundamentals and stocks that fell below fair value.

Separately, Bank of Thailand governor Prasarn Trairatvorakul said there was no need to introduce special measures aimed at coping with the baht's retreat in the wake of Monday's stock swing.

The local currency has weakened against the US dollar but was moving in line with regional peers, and no irregularities have been seen, he said.

Trading volume is usually thin as the year-end approaches, and the effect on the market could then become overblown.

Fitch Ratings, meanwhile, is taking a bearish view of the energy sector after the sharp decline in crude prices, senior director Lertchai Kochareonrattanakul said.

He said upstream oil and gas firms and state giant PTT Plc in particular could expect lower operating cash flow.

The credit rating group said PTT must review its short-term investment plan and make adjustments to strengthen its financial position and business performance as it navigated this rough patch.

At any rate, Fitch is maintaining its stable outlook for PTT.

The group expects the global crude price to average US$90 a barrel for all of 2014.

Further declines in the crude price can be expected in the year ahead, it said.

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