New high despite no change in policy rate

The Stock Exchange of Thailand Index hit a new 18-year high, ahead of the Bank of Thailand's policy rate meeting today.

The Thai bourse ended the morning session at 1,540.12 points, gaining 8.05 from the previous closing. The index further rallied in the afternoon, despite foreign net-sells this month, to end the day at 1,546.64 points on turnover of Bt63 billion.

Thanks to robust economic growth in the fourth quarter, most economists believed that the policy rate would be maintained at 2.75 per cent. A cut would further boost investment in the stock market.

Sukit Udomsirikul, managing director of Maybank Kim Eng Securities (Thailand), told TPBS in the morning that the market sentiment is boosted by improvement in global economic indicators rather than the policy rate.

The Bank of Thailand has been urged by the government and exporters to cut the policy rate, primarily to deter capital inflows and hence weaken the baht against US dollar.

"Such inflows are mainly going to the bond market. As we have witnessed, foreigners are net-sellers this month," he said.

According to the SET data, foreigners’ sell has outpaced their purchases by Bt13 billion so far this month.



In January, trading volume surged 51 per cent on year as market sentiment was cheered by easing fears of European debt woes and the first increase of China’s economic growth in the fourth quarter after it had retreated for the previous seven quarters, signaling a recovery of the global economy. In the month, the index gained 5.91 per cent from the end of last year, while foreign net-buys totalled US$498 million.

According to the Stock Exchange of Thailand, combined average daily trading volume of SET and Market for Alternative Investment (mai) was at Bt58 billion (approximately US$1.93 billion), or up 135 per cent from a year earlier, while daily trading volume of derivatives rose 56.62 percent from the end of 2012 at 67,772 contracts per day.

At the end of the month, SET’s market capitalisation reached Bt12.54 trillion or $418.09 billion.