Foreign buyers boost SET Index
Foreign net buying boosted the main Stock Exchange of Thailand (SET) index by one per cent yesterday on the back of a positive psychological impact from the Finance Ministry's announcement of a economic stimulus policy, as well as a rally on foreign stock markets.
The SET Index closed at 693.54, up by 1.02 per cent, on turnover of Bt17.22 billion. Foreign net buying was Bt3.23 billion, the highest since December 19 when the central bank introduced draconian capital-reserve requirements. Saengtham Jaranachaikul, senior director of Thanachart Securities, said the rally in Thai stocks was mainly due to foreign net buying into the local market, as well as regional markets which also rose significantly. "I think there is no other reason aside from foreign buying, as they [already] expected a rate reduction [next week]. However, if the index breaks 700, it doesn't matter. The Thai stock market depends largely on foreign buying," Saengtham said. He suggested investors buy stocks that are targeted by foreign investors - including banking, energy and construction materials - with forecasts of support and resistance of 690 and 700, respectively. An analyst from Trinity Security said the Thai stock market was turning around after a long period of sluggish sentiment. He agreed that the Finance Ministry's announcement of an economic stimulus policy was the first positive factor in the domestic market, adding to the positive sentiment from a rally on regional bourses. He said that despite two rounds of rate increases by the Bank of Thailand, the local stock market had hardly responded because the government has not introduced any clear-cut economic stimulus policy. However, Saengtham warned that despite yesterday's rally, the market still had a downside risk in the medium term. The rally will be temporary as the key resistance level of 700 will prevent the index from surging significantly. There is still a risk from politics, as despite an election date being promised, political uncertainty is still high, he said. Sukit Tang, director of institutional investors at Ayudhya Securities, said the SET was expected to correct today after a rally for three consecutive trading days. The correction period will last until before the long Songkran festival. However, he believes the stock market will rally again after the holiday. He recommended banking, property, and petrochemical stocks, with a SET Index target of 685-690.
Siriporn Chanjindamanee The Nation
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