SET declines normal amid oil price slide,
The chairman of the Stock Exchange of Thailand rushed to explain to the finance minister yesterday why the SET Index had dropped sharply while oil prices declined.
After meeting with Finance Minister Sommai Phasee yesterday morning, Sathit Limpongpan said the declines on the bourse were normal, as global and regional stock markets retreated after crude-oil prices plunged to US$60 per barrel.
The SET Index slumped 32.75 points to close at 1,526.81 yesterday, the third day of declines. Energy stocks are among those that have seen their prices fall.
"The Thai economy has seen better fundamentals than in the first half of this year. Investors have already absorbed [this] information and expect the economy to make improvements next year. Listed companies’ future performance is also taken for consideration before investment," Sathit said.
He added that to avoid being duped by untrue rumours, investors should check and recheck reliable sources before making decisions on where to put their money. If suspicion remains or they need more information, investors can ask the SET.
Vorapol Socatiyanurak, secretary-general of the Securities and Exchange Commission, said measures to control overheating of stocks had been approved and would take effect on January 1. However, he explained that over-the-counter trading of shares did not fall under the SEC’s authority.
In response to over-the-counter trading that caused millions of baht in damage, Pattera Dilokrungthirapop, chairwoman of the Association of Thai Securities Companies, said Asco had previously asked its members and their investment consultants not to get involved in such activities despite the lack of regulation. She suggested that investors trade through authorised dealers and the stock markets themselves, the safest way to avoid risk.
SET president Kesara Manchusree said that in the current quarter, the exchange’s composite index had performed much more satisfactorily than in the first half of the year.
Since the beginning of 2014, listed companies have seen a 20-per-cent rise in their combined earnings, pushing the SET Index up to 1,600 points. However, it could not stay at that level for long after the drops in global oil prices.
She said listed companies’ earnings performance was a better indicator for investors than a 1,600-point index level, as the former "reflects companies’ capabilities for business operations".
Kesara said there would be no relief measures for the Thai bourse after its declines, while suggesting that investors be
more cautious on initial-public-offering shares and not believe rumours. Next year, the SET estimates about Bt250 billion in IPO shares.
Pattera expects the SET Index to make corrections in the short term and fall below 1,500 points, suggesting that investors gradually accumulate stocks with big market capitalisation.
Next year’s target for the SET Index is 1,600-1,700 points, she said, projecting listed companies’ earnings growth to fall below the previous target at 14.15 per cent in 2015 mainly on uncertainties over the country’s economic growth and problems in the global economy.
