Thai shares tumble amid fears of US rate hike
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THAI shares yesterday nosedived 3.15 per cent over a few unfavourable factors, including fears of a fresh hike in the US federal funds rate.
The Stock Exchange of Thailand Index closed down 47.32 points or Bt47.32 billion 3.15 per cent to 1,457.02 points on turnover of Bt74.12 billion.
Deputy Prime Minister Somkid Jatusripitak said the tumble in the stock market was caused by investors panicking.
He warned against overreacting, as Thailand’s fundamentals were still solid, with economic growth this year expected to run at 3.2-3.5 per cent.
The government’s investment was also expected to exceed US$43 billion (Bt1.5 trillion) over the next five years, he said.
The Thai bourse, however, responded to the negative factors more dramatically than those in other markets such as the Philippines with a slight fall of 0.58 per cent and Singapore with a slight drop of 0.24 per cent.
Indonesia's Composite Index slipped 0.31 per cent.
The Japanese, Hong Kong and Taiwanese financial markets were closed for holidays.
Chinese equities bucked the trend, ending more than 1 per cent higher as markets reopened after a week-long break, led by technology shares.
Warut Sivasariyanon, managing director of the Research Division at Asia Wealth Securities Co, has expected that the SET would experience volatility this week due to external factors, such as concern over the stability of banks in Europe.
The US Federal Reserve was also highly likely to raise the policy rate in December following some positive US economic data.
The brokerage looks for an outstanding third-quarter reporting season, with the combined profit of listed Thai companies expected to soar 30 per cent year on year.
The Thai government has also approved many mega infrastructure projects to spur private investment.
However, the possible US policy rate hike is expected to pressure the SET downward this week to 1,481-1,519.
The securities house suggested investors focus on stocks with strong fundamentals and a hefty dividend yield.
Tisco Securities reiterated in its daily stock note that the SET swung sideways down, as investors were in a short-term profit-taking mode.
The SET was mostly moving in the red after rallying for four days.
The Federation of Thai Capital Market Organizations reported that the FETCO investor confidence index this month was down by 26.19 per cent to 103.84 due to investors’ fear over a rise in the US’ federal funds rate, resulting in capital outflows.
The SET said it was likely to fall short of its Bt190 billion target for this year’s initial public offerings, due mainly to the bear market.
However, foreign investors were net buyers of Bt998.74 million followed by individuals with net buys of Bt6.89 billion.
Institutional investors pulled out a net Bt7.27 billion from the market, followed by brokerages dumping a net Bt627.33 million in proprietary trading.
