No circuit breaker for SET, yet

The Stock of Exchange of Thailand (SET) plunged more than 50 points on Monday as the market panicked over the outbreak of the coronavirus outside China. The index was trading at 1439 – its lowest point of the day – as of 4:30pm, down 56 points from its opening at 1495 on Monday morning.

SET President Pakorn Peetathawatchai said the huge drop in the SET is in line with other bourses in the world, as investors are worried about the outbreak of the coronavirus. He insisted that a circuit breaker will not be needed as the Thai market is still strong, with new initial public offerings (IPOs) still coming out. 

Markets in South Korea, Taiwan, Malaysia, and Singapore all traded down on Monday morning. Pakorn pointed out that investors should wait and see what happens to the European market when it opens since the outbreak is increasing in some countries within the Eurozone as well. He said that internal factors accounted for little on Monday when the whole macro-picture was down.

He said that the assets that are being affected right now are within the commerce, energy, and food industries from many factors including geopolitical factors, OPEC’s decision to lower production, and the outbreak which no one know when it will be contained. 

“There is no need for the circuit breaker yet,” he said “The market is still strong and IPOs are continuously coming out.” 

Pakorn said investors should spread their risks and pick the risk level that is suitable for them. He said there is opportunity in crisis, with some shares within the sectors that investors can handle with high returns becoming cheaper. He also warned that investors should avoid fake news and use their discretion when analysing information. 

Maria Lapiz, Managing Director and Head of Institutional Research Department at Maybank Kim Eng Securities said markets were down all over the region, but emerging countries in Asia were down more.

She highlighted the outflow from the SET, with the number of foreign investors that were holding on in the index at a historic low. Foreign investors have sold more than 34.45 billion baht worth of Thai shares year-to-date. More than half, about 17.15 billion baht, disappeared between February 1-24 alone.

“Today, the index collapsed. Most under-performers are businesses owned by big business groups such as CRC and MINT,” she noted. The SET100 went down by 91.1 points, or 4.14 per cent, on Monday.

In related news, Gulf Energy Development (GULF)’s shares went up against the market on Monday as the company posted a profit of 905 million baht in the fourth quarter of 2019, up 63.5 per cent year-on-year but down 16.7 per cent from quarter-to-quarter. The stock went up 5 baht to 187 baht, representing a 3.6 per cent increase as of 4:15pm. 

KTB Securities said the reason GULF went up against the market is because they decided to break down the stock’s par value from 5 baht down to 1 baht, with an expectation of a dividend payment at 1.3 baht per share. The spiralling down market is also sending investors to safe assets such as shares within the power plant group, they added. 

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