Stock Exchange of Thailand President Charamporn Jotikasthira warned investors that market volatility will remian in the next 1-2 months, as Greece's woes are not over despite the Sunday's election.
Speaking to reporters after a meeting with the Bank of Thailand's Monetary Policy Committee and the Financial Institutions Policy Committee today, Charamporn said that though stock markets warmly welcomed the Greek election result whereby the pro-bailout parties won majority votes, the government formation is still in doubt. In focus is conditions to be attached to the formation.
"Experienced investors may reap gains, but those without expertise in this should beware of volatility in the next 1-2 months. They should also closely monitor the measures to deal with Greece's problems," he said.
Charamporn is right. Volatility was witnessed in today's trading, when the index swung widely from 1,159.95 points to 1,181.69. The index ended the day at 1,163.41 points, down 2.32 points or 0.20 per cent from the previous closing, despite gain in the morning session. Turnover was Bt26.4 billion.
At the open, Thai shares today enjoyed a boost in tandem with regional bourses, driven by Greece's pro-bailout political party's victory in Sunday election.
At noon, the Stock Exchange of Thailand index gained 9.69 points or 0.83 per cent to stand at 1,175.42 points on turnover of Bt14.15 billion.
As Greece looks set to remain in the euro zone, Tisco Securities views that as a good news for the Euro Area. It said in a research note today that in the short term, the index could easily reach 1,200-1,220 points.
Uncertainty on Greece's future in the euro zone sparked sell-offs of Thai shares in the past month. So far in June, foreign investors' net sell has reached Bt8 billion, added by Bt875 million today. Year to date, they remained net-buyers, with net-buy position of Bt61.1 billion.
In May, the euro crisis was the main factor that drove down the SET index by 7.08 per cent. In 2012, May was the first month that foreign investors were net-sellers, with net-sell position of Bt14.7 billion.
In a statement by the exchange, the index declined despite sharp economic recovery in Thailand. However, Thai and other global markets were not spared from the euro crisis, ahead of Greece's election on June 17. Fears were fuelled by negative developments in Spain and Italy, as well as the economic slowdown in China.
Despite the decline in composite index in the month, at the end of May, the index had advanced 11.33 per cent from the end of last year. However, the monthly decline shaved off the Stock Exchange of Thailand's market capitalisation by 6.46 per cent from the previous month to Bt9.5 trillion and Market for Alternative Investment's by 19.23 per cent to Bt79.5 billion.