SET leads downward spiral on dour Q3 earnings
The Stock Exchange of Thailand (SET) index had the steepest plunge among Asia-Pacific bourses on Monday as confidence was derailed by subdued third-quarter earnings and a dejected economic growth outlook.
Thailand's benchmark equity index closed at 1,569.53 points, down 21.06 points or 1.32%, in turnover worth 54.76 billion baht.
Foreign investors were net sellers of 2.35 billion baht and brokerage firms offloaded 1.1 billion worth of shares.
The equity sell-off in the SET index was not aligned with gains seen in many Asian bourses, with Indonesia's Jakarta Composite index surging by 1.97% and Japan's Nikkei 225 rising by 1%.
"The only reason the SET moved in contrast with most regional bourses is disappointing operating results, which are grounds for a downward revision of earnings per share and an underweight outlook," said Prakit Sirivattanaket, senior vice-president at Merchant Partners Asset Management.
Large-cap stocks led yesterday's losses as CPF shares plummeted by 3.64%, followed by INTUCH (-3.4%), ADVANC (-2.36%), KBANK (-2.26%), PTT (-1.73%) and SCC (-1.57%)
Mr Prakit said on Friday, foreign investors opened a short-selling position on both single-stock futures and SET50 futures by around 50,000 contracts, resulting in a rise of outstanding SET50 futures to 380,000 contracts from 350,000 previously.
Foreign investors' short-selling position was mostly for short-term contracts, not the series that will mature in next year's first quarter, he said.
"The stock market fell by more than 1%, but those investing in the futures market can make profit by 15-20%," said Mr Prakit.
"We may see investors close their positions within 1-2 days, preventing the stock market from tumbling further."
Deputy Prime Minister Somkid Jatusripitak recently said Thailand's full-year GDP growth is expected to be 2.4%, while the Commerce Ministry projects this year's headline inflation will be below 0.85%, said Phillip Securities Thailand in its note.
"The outlook remains downward for the short, medium and long term and there is no sign of recovery in sight until the SET index can rebound above 1,620 points," said Phillip Securities Thailand.