Poor export data dampens market sentiment
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Thai shares stayed in the negative territory Tuesday while the baht has weakened near Bt36.5 per US dollar, due to the poorer-than-expected export performance in the first eight months.
At 3.09pm, the Stock Exchange of Thailand index lost 3.55 points or 0.26 per cent to 1,348.58 points, extending the 1.79 per cent loss yesterday. The Thai baht was traded at Bt36.4 per US dollar, weakening by 11 per cent from the beginning of this year.
At the close, the SET index lost 3.29 points or 0.24 per cent on Tuesday. It ended the day at 1,348.84 points on turnover of Bt43.78 billion. Foreign investors remained net-sellers of Thai shares, with Bt2.77 billion in net-sell position. Year to date, their net-sell position has reached Bt106.33 billion.
The baht also weakened to Bt36.47 per US dollar at 6.15pm.
In the first 8 months of 2015, Thailand's exports fell 4.9 per cent on year. Exacerbating the situation was the poor manufacturing in China which would dampen the purchasing power. In the first eight months of this year, 11 per cent of Thai exports was destined to China. Exports to China dropped by 7.9 per cent in 2014 and 7 per cent in the first half of this year. During January and June, Thailand witnessed an increase in shipments only in 4 markets - the US, CLMV, Australia-New Zealand, and India.
HSBC noted that the main drag on exports came from Asean-5 markets (Singapore, Malaysia, Indonesia, Brunei, and the Philippines) which are experiencing both currency weakness and a slowdown in domestic demand.
In a research note, Nalin Chutchotitham, its economist in Bangkok, expected the Bank of Thailand to welcome further weakness in the Thai baht in light of poor export performance. She also expects a 25-basis points rate cut in the fourth quarter of this year.
