SET decline enters 9th day; baht hits three-year low

The baht also fell toward a three-year low and government bonds declined after a surprise drop in exports added to concern Southeast Asia’s second-largest economy will struggle to emerge from a recession this quarter. 

The Thai currency depreciated 0.8 per cent to 32.18 per dollar as of 3.32pm in Bangkok and reached 32.19 earlier, the weakest level since August 4, 2010, according to data compiled by Bloomberg. The yield on 10-year government debt rose 13 basis points to 4.28 per cent, Bloomberg reported. 

The SET lost 35.21 points or 2.65 per cent to close at 1,293.97 yesterday, heading for its longest losing streak since 1998. 

Advanced Info Service and Total Access Communication, the nation’s biggest mobile-phone companies, dropped at least 2 per cent and were among the biggest drags on the index. 

Thailand entered a recession in the second quarter, according to figures released this month, while data yesterday showed exports unexpectedly fell last month. Southeast Asia’s second-biggest economy will probably post a current-account deficit of US$550 million (Bt17.69 billion) in July, according to a Bloomberg survey of economists. 

Companies with revenue from domestic markets should be affected by weak economic growth, Jintana Mekintharanggur, director of equity investment at Manulife Asset Management Co in Bangkok, said by phone. Overseas investors are unlikely to bring money back into equity markets in Thailand and the region until there are signs of strong economic growth. 

Overseas investors sold about $1.1 billion of Thai stocks and $1.2 billion of local bonds this month amid speculation that the US Federal Reserve will reduce monetary stimulus this year.