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Foreign sell-off pressures reserves

Foreign investors' extended retreat has raised their net-sell position in the Thai stock market so far this month to Bt41.4 billion, amid the raging political chaos at home and rising volatility in the global financial market.



On Tuesday, foreign investors sold Thai shares worth Bt5.65 billion against purchases of Bt3.93 billion, resulting in net sales of Bt1.7 billion.

The year-to-date net-sell has ballooned to Bt194.76 billion.

The Stock Exchange of Thailand index ended marginally higher on Tuesday, gaining 0.99 point or 0.07 per cent to 1,327.13 points on turnover of Bt22.4 billion.

The Bank of Thailand’s data showed that Thailand’s international reserves have fallen to US$167.6 billion as of December 13, down sharply from the peak of $189.88 billion in April 2011. In the past few months, foreign investors have sold Thai bonds and equities to seek higher returns in the US. Political instability at home also exacerbates the situation.

The baht ended the day at 32.69 per US dollar, after peaking at 32.84. This is the lowest since March 2010.

Besides the prolonged political protests, the Thai equities and the baht suffered from the US plan to taper its bond-buying programme.


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