SET ends year on positive note after 12% plunge

The SET Index ended 4.24 points higher than on Tuesday, at 1,288.02 points, on very thin turnover of Bt27.97 billion. That was sharply down from last year’s final day of trading, which closed at 1,497.67 points. Foreign investors this year sold Thai shares with a net value of Bt154.35 billion. In December alone, the net sell totalled Bt32.5 billion.

Meanwhile, the Bank of Thailand says improvement in domestic consumption supported economic expansion in November, partly driven by the temporary positive factor of changes in the automobile excise tax coming into effect in the new year.

The excise tax on vehicles will be based on carbon emissions instead of engine size from the beginning of 2016 onwards, which has encouraged some people to buy now instead of waiting for next year when the cars they want could be more expensive.

Roong Mallikamas, senior director of the BOT’s Macroeconomic and Monetary Policy Department, told reporters at the central bank yesterday that the eleventh-hour surge in vehicle purchase could reduce demand next year, but the decline was not expected to be dramatic.

She also said headline inflation should be able to turn positive by mid-2016 and could be within the target inflation rate of 1-4 per cent by the third quarter, but that would largely depend on the price of oil, which is a supply factor.

Headline inflation is currently at minus 0.97 per cent. Brent crude oil was trading at around US$38 per barrel yesterday, compared with around $50 at the beginning of 2015.

“If oil prices drop any further, then it will take longer for the inflation rate to return to normal,” Roong said.

The weakening baht has put pressure on imports of machinery and raw materials for production, which could affect investment decisions. But she believes that the lack of investment activity right now is due more to low demand than to the increase in import costs.

The BOT’s November economic numbers show that government spending expanded by 17 per cent year on year, while private spending on durable items increased by 2.4 per cent from October. The value of merchandise exports dropped by 6.6 per cent year on year, and also decreased from the October value. 

The value of merchandise imports last month contracted by 8.5 per cent compared with November last year. 

The number of foreign tourists increased by 2.5 per cent from October as a result of a pick-up in East Asian tourist arrivals, especially Chinese.