Small and mid-sized stocks remain popular among investors despite warnings on speculative signs.
The Stock Exchange of Thailand (SET) has warned investors to be cautious with the so-called speculative stocks for the second time in three weeks.
The SET index continued to rally yesterday, up 6.04 points to close at 1,440.48 points, in heavy trade worth 53.37 billion baht.
At the end of last week, trading in non-SET100 shares rose significantly to 28% of total trading value. The highly volatile nature of the trading movements is indicative of massive speculation.
Regulators repeated their warning, insisting that investors check market alerts to see which stocks require a cash deposit when trading in highly fluctuating stocks.
Only two weeks into this year, there were 14 cash-balanced stocks compared with 48 for all of last year. The bourse has also issued a trading alert requiring specific stocks to clarify publicly the main factors that are driving their stock prices.
Living Land Capital (LL) was the latest stock added on the trading list yesterday as the shares rose 21.05% to 0.46 baht in trade worth 614.8 million baht.
SET president Charamporn Jotikasthira said the market was closely monitoring the market and was ready to issue alerts to protect investors.
Chanitr Charnchainarong, a SET executive vice-president, said warrant trading also skyrocketed recently, especially those tied to property shares.
He cautioned investors that they must avoid making decisions based on rumours and that the fundamentals of each stock are the most important factor to be considered.
The SET's daily trading value stayed above 50 billion baht since the beginning of this year, a 60% increase from 35 billion baht in the fourth quarter of 2012.
"In the first two weeks, investors were focusing on SET50 at 56% and 59% of total trading respectively. Their interest waned last week, with blue-chip stocks down sharply to 45% of total trade value, while non-SET100 or small-cap stocks rose, making up 28% of the total," said Mr Chanitr.
Classified by sector, the volatility of non-SET50 shares was in the steel and property sectors.
Sombat Narawutthichai, secretary-general of the Securities Analyst Association (SAA), said the SAA had joined with the Association of Securities Companies and the Securities and Exchange Commission to encourage brokers to analyse small and medium-sized firms.
The three organisations spent four months developing a curriculum for analysts. The first course ended with 57 analysts participating and the second course will open in March.
"The number of stock analysts is around 260. It rebounded in mid-2012 after declining over the past four years on the impact of the sector liberalisation," said Mr Sombat.
The number of companies that provided free analysis reports through the SAA's and Settrade websites also increased to 160, from 130 last year.
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Writer: Nuntawun Polkuamdee & Darana Chudasri