Stock manipulation has not been detected in the Thai market yet even though shares and trading volume have surged significantly, says the Stock Exchange of Thailand.
"Trading activity has soared, but the volume remains lower than in the first half of last year. Investment demand has increased due to higher market confidence, and we have not found any share manipulation. The supervision department has kept a close eye on trading," president Kesara Manchusree said yesterday.
Thai shares have rallied 7.8% since the military's takeover of power on May 22. Its average turnover has been 40-50 billion baht a day this month, up from 35 billion a day in the first half.
The SET index edged up 2.36% yesterday to 1,543.92 points in choppy trade. Trading was heavy at 49.8 billion baht.
Foreign investors were net buyers of 18 billion baht this month through Wednesday but have sold 23 billion more than they bought this year.
However, Mrs Kesara warned that investors should adopt a selective buying strategy after the prices of a number of stocks jumped substantially, saying there were no other fresh factors to continue to drive up their prices.
Moreover, small stocks are playing a larger role in market trading at the moment.
The National Council for Peace and Order is committed to infrastructure investment, attracting foreign funds to return, said SET chairman Sathit Limpongpan.
"The investment outlook in the Thai market remains positive in the second half thanks to strong fundamentals and growth, drawing foreign fund inflows and strengthening the baht," he said.
Kobsit Silpachai, Kasikornbank's head of capital market research, said the euro zone's economic problems remained a concern, as its unemployment was still high at 12%. Fund flows could become more volatile this year after the US Federal Reserve ends its unconventional stimulus, perhaps in October.
Investors should keep watch on the money market's reaction when the Fed's pullback is completed and see whether Europe and the Bank of Japan will have other easing measures in response, he said.
Piyasak Manason, chief economist at Kiatnakin Bank, said the bank forecast Thai GDP growth of 1.8% this year and 4% next year, while US interest rates were projected to normalise following the Fed's stimulus cut.
He picked stock sectors with potential as consumption, property and construction.
In other news, the SET will hold its Thailand Focus roadshow from Aug 27-28, with more than 100 foreign investors expected to attend.