Thai shares down on Greek impact, poor earnings outlook

At noon, the Stock Exchange of Thailand index was down by 17.43 points to 1,472.16 on very thin turnover of Bt16.6 billion.Thai baht has weakened to 33.84 per US dollar but gained against the euro to 37.29.  

Asia Plus Securities expected some market volality following the Greek referendum voting yesterday, when 61.3 per cent of Greek population voted "no" to the creditors' terms and conditions. Such would lead to renegotiation with creditors on the bailout package, which could involve debt haircut. 

"The outcome of the referendu million of the referendu million would depress worldwide financial market and stock markets, and as long as Greece and TROIKA cannot make a mutual agreement on the debt issue, Greece is more and more at risk of default and exiting Eurozone.. Greece had asked for 50 per cent haircut in the past. If there is another massive haircut, impairment loss of investment would increase, thus depressing share prices of European financial institutions and creditors," it said in a research note. 

Poor earnings outlook at home is also pressuring Thai shares. Asia Plus Securities recently slashed earnings forecasts for big-cap sectors like banking, ICT, energy (oil price assumption cut), and media for 2015 and 2016, as the first quarter performance was poorer than expected.  It envisages another cut as economic growth forecast may be revised down again. 

Expecting the renegotiation which should be wrapped up before July 20 when Greece is due to repay 3.5 billion euros to the European Central Bank, Tisco Securities expected the Thai market to remain inactive. The index may fall to 1,470-1,476 points today, while the main resistance line is 1,485-1,495. 

Last Friday, foreign investors sold in regional stock markets at US$236 million. The Philippines and Indonesia were with a net buy of $6 million (after three-day net sell) and $12 million (second day), respectively, while the other three countries faced net sell:

Taiwan of $193m, South Korea of $19 million (still with $69 million accumulated net buy since July), and Thailand of $43 million or Bt1.47 billion (second day). Foreign investors sold Bt955 million net of Thai bonds.  

Asian stocks mostly fell Monday. 

Tokyo fell 2.18 percent in the afternoon, Seoul shed 1.83 percent, Sydney lost 1.18 percent and Wellington was off 0.98 percent.

Shanghai opened up 7.82 percent before but eased to sit 2.16 percent higher by lunch. Hong Kong climbed 0.70 percent in early trade - riding the coat-tails of the mainland gains - but ended the morning session 3.18 percent lower.

In Japanese trade the euro was at $1.1038 and 135.20 yen, clawing back some of the losses suffered in New York electronic trade Sunday, when it fell to $1.0963 and 134.91 yen.

Shinya Harui, currency analyst at Nomura Securities in Tokyo, told AFP: "There is no particular reason for the euro to be holding up, but markets are still assessing the spill-over risks in the case of a Greek exit fro million the eurozone."

Greek Prime Minister Alexis Tsipras had campaigned against accepting debt refor million proposals fro million its creditors - the ECB, the European Commission and the International Monetary Fund (IMF) - claiming a "No" vote would strengthen his hand in negotiations.