International Engineering (IEC) topped the list of companies whose share prices outperformed the SET Index over the past two months, with their price movements prompting the Stock Exchange of Thailand to fire off a stern warning to investors.
Among the top 20 best-performers judging by share prices in the past two months, IEC's skyrocketed by 600 per cent as of January 22, beating the 12.1-per-cent gain in the composite index.
According to Tisco Securities, stock prices of many companies surged by 200-600 per cent above their fundamentals in the past two months. The brokerage house warns investors to take a cautious stance when buying these companies' stocks. Though these companies' performances are indeed positive, such price jumps absorb that good news.
The SET performed well during the past two months, reflected by its rise of 12 per cent since November, the best in Asean.
On January 17, the SET directed all securities houses to monitor the apparent speculation in 61 listed companies with price-to-earnings ratios of more than 40 times. On the same day, SET president Charamporn Jotikasthira said that if the stock prices of those 61 firms did not cool down, the bourse might take steps to tone down their share prices. He added that the financial results of the 61 firms in question did not merit the increase in their stock prices.
On January 14, the SET issued a trading alert listing securities showing unusual price movements and trading volumes compared with the previous trading session, noting that the exchange was awaiting clarification from the firms involved. The securities of IEC, WHA, GOLD (Golden Land Property Development) and MAX (Max Metal Corp) were on the list. On January 15, all filed to the SET that they were not aware of any information not previously announced concerning them, their subsidiaries or associated companies that, if known, might explain the trading.