Stock speculation under control: SEC
The Securities and Exchange Commission has insisted that measures already in place are adequate to contain speculation in the Thai stock market, amid fears that more capital inflows may lead to a bubble in asset prices.Thai shares have hit new highs in recent months.
The Stock Exchange of Thailand (SET) Index yesterday hit a 17-year high at 1,514.11 on turnover of Bt72.02 billion, though the market faced heavy foreign selling.
Meanwhile, Globlex Securities anticipates the index will rise further to 1,700 points. The exchange recently required cash settlement for some stocks to keep speculation in check.
Foreign investors appear to have taken profit from the market advancement and baht appreciation. Year to date, they remained net-buyers, at Bt3.11 billion, but so far this month, their selling exceeded buying by over Bt12 billion, according to Deutsche Bank and Tisco Securities. Region-wide, year-to-date inflows to India hit US$7.6 billion (Bt226.6 billion), followed by $1.6 billion to Taiwan, $1.03 billion to Indonesia, $806 million to the Philippines and $115 million to Vietnam.
"There is no need for extra measures," said SEC Secretary-General Vorapol Socatiyanurak. "Important-ly, stock analysts are asked to provide appropriate advice on stock fundamentals, to ensure that investors have sufficient information. It's clear that some investors entered the market without thorough analysis."
He added that the SET routinely monitors the market and submits any irregular transactions to the exchange watchdog. Year to date, such reports are at a normal level. "There is no irregularity over foreign capital inflows to the market. Local investors still dominate the majority of daily turnover."
Globlex Securities chief investment strategist Chakkrit Charoenmethachai said the Thai bourse would attract more investment as quantitative easing in developed economies is increasing liquidity five-fold.
Meanwhile, the government's Bt2.27-trillion infrastructure investment plan is boosting the SET's outlook, particularly in construction-related stocks as well as banks, property companies and communications. Chakkrit believes the worst is over concerning the US and euro-zone economies.