Foreign net sells on Thai shares hits Bt6.8bn
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Foreign investors continued selling Thai shares, with net-sell position reaching Bt6.8 billion today.
According to Stock Exchange of Thailand Chairman Sathit Limpongpan, it was Bt3.6 billion in the morning session.
He said that local investors' net buy position was Bt4 billion, indicating the different views on the political condition among the two groups of investors. He noted that local investors had better understanding in the situation and maintained their confidence.
Foreigners have been net sellers on Thai shares since May 20, when the martial law was declared. Net sale in this month has hit Bt16 billion, as of May 22. Including today's net sell, the amount hit Bt22.7 billion.
Thai shares plummeted on Friday after the Army seized the administrative control.
At 11.46am, the Stock Exchange of Thailand index lost 20.75 points or 1.48 per cent, to 1,384.46 points, on turnover of Bt29.9 billion. At the close, the index recouped some loss. The index lost only 8.37 points or 0.60 per cent, to 1,396.84 points, on turnover of Bt53.5 billion.
Sathit insisted that the Thai market's fundamentals remained strong, despite the economic slowdown. He believed that foreign investors would return once they truly understand the situation.
"They are selling Thai shares because they do not truly understand the situation. Once they do and understand that this is a unique feature of the Thai market, they wil return as the bourse remains attractive. History shows that the bourse has always recovered once the situation returns to normal," he said.
The exchange proceeds with the road show in the UK and its officials are ready to explain the situation to foreign investors, he said.
Brokerage houses anticipated the decline in the composite index.
Chakkrit Charoenmethachai, managing director of Globlex Securities, noted that it is natural given that several foreign fund companies do not invest in the countries under the military rule. He noted that these funds' outstanding investment in the Thai market remains small. He believed that the index may fall as much as 30 points today.
Elsewhere, Asian markets rose for a second straight day Friday, taking a positive cue from Wall Street.
The US Labour Department said initial jobless claims, a measure of the pace of layoffs, ticked up slightly from the previous week, while existing homes sales were 1.3 per cent higher in April, the first month there has been a rise this year.
In early Friday trade the baht rose to 32.49 against the dollar from 32.54 on Thursday. The currency and Thailand's stocks market have barely been affected by the country's recent events.
Dealers are keeping an eye on events in Thailand after the military seized power Thursday, declaring a nationwide night-time curfew and curbs on civil liberties.
However, Mark Williams, chief Asia economist at Capital Economics said the latest events could help the country in the short term.
"The coup reduces uncertainty about the immediate outlook and, in particular, the possibility that the political standoff would turn much more violent," he said. "For these reasons it could actually be positive both for Thailand's economy and financial markets in the near term," he told AFP.
