Capital inflows and the court verdict in the Map Ta Phut case seem to have ushered in a new era for the Thai stock exchange, which yesterday saw its market capitalisation hit a record high at Bt7.52 trillion while the SET Index returned to the pre-1997 crisis level at 929.90 points.
The index gained 1.02 per cent to reach a new 14-year high. On November 28, 1996, the index stood at 938.42 points before sliding as low as 240 points in the aftermath of the 1997 financial crisis. Meanwhile, the market cap was the highest since the Stock Exchange of Thailand
Stock analysts attributed the bull run to the market relief as all but two Map Ta Phut projects were unlocked. All energy stocks with huge market capitalisation witnessed advances in share prices, led by PTT which gained 8.18 per cent to Bt291. PTT Aromatics and Refining (PTTAR) went up 6.84 per cent to Bt25, PTT Chemical was up 3.40 per cent to Bt106.50, and Siam Cement was up 3.3 per cent to Bt313.
The bull run, however, surprised the Securities and Exchange Commission. SEC Secretary-General Thirachai Phuvanartnaranubala said the watchdog and the Stock Exchange of Thailand would closely monitor the transactions. So far, they have witnessed no trading irregularities and believed that the sentiment was mainly driven by foreign investor confidence in Thai economic fundamentals.
As the market turnover was extraordinarily high at Bt52 billion yesterday, Thirachai urged all investors to base their investments on stock fundamentals.
An analyst at Far East Securities noted that yesterday, local investors shifted from stocks in commerce, transport and food industries to energy stocks, because of the end of the Map Ta Phut stalemate. Meanwhile, foreign fund inflows were also directed to energy and big-cap stocks, indicating their higher confidence.
SCB Securities noted that foreigners were net buyers in the past two weeks. One reason advanced for the jump was that the Thai market had lagged behind in the region, and the index was catching up with regional peers. While the Thai market attracted foreign investment, foreigners started selling stocks in Indonesia. SCB also said that some inflows to the equity market could come from the bond market, as returns are sliding amid the upward interest trend.