4 billion baht fund to shore up Thai stocks

October 13th, 2008 - 1:15 pm ICT by Amrit Rashmisrisethi  

Authorities plans to inject four billion baht into an existing fund shoring up Thai stocks, according to a Ministry of Finance’s official.

He said today (October 13) that the authorities would inject four billion baht into Thai Opportunity Fund to help shoring up Thai stocks after the Thai stocks have been severely affected by uncertainty in local politics and prevailing financial crises in the Western world.

The fund, he added, was aimed at building up positive pschycological

Foreign investors, the major players in the Thai stock exchange since its inception 33 years ago, sold out Thai stocks so far this year amounting to some 140 billion baht. Their money was still investing in the Thai bourse amounting to some 120 billion baht.

Meanwhile, Kasikorn Research Centre reported that on Friday, baht value was the weakest in three weeks, while the Stock Exchange of Thailand (SET) index plummeted on Friday to its lowest level in five years.

Baht value for onshore market still declined last week compared with US dollar. A number of other factors also affected the baht value last week, including uncertainty of local politics, importers’ buying dollars, and Thai stock exchange’s plummeting as foreign investors being net sellers, were negative factors pressuring baht.

However, baht regained ground later last week due to investors selling off dollar to take profit following concerted efforts by central banks worldwide to decrease their respective policy interest rates in bids to try to counter prevailing financial crises in the Western world.

Baht last Friday weakened in line with other regional currencies to close at about 34.36 baht to a dollar in Asia, compared with 34.11 baht registered previous Friday October 3.

There will be deduction of value added tax (VAT) through banks around the middle of this week. Whereas there is no other factors which may significantly affect Thai financial market this week. However, financiers are likely to still keep eyes on prolonged US financial crisis situation which have sent shockwaves to Europe, especially United Kingdom and Germany. Short term interest rate locally is expected to sustain at about 3.75%

Baht in local market is expected to move between 34.20-34.60 baht a dollar this week (October 13-17). Factors to monitor include Bank of Thailand’s stepping in to take care stability in local financial market, continued buying in dollars amidst relatively tight interbank rates, as well as G-7 wealthiest nations’ meeting, International Monetary Fund’s meeting, and World Bank’s meeting this week on such issues as prevailing world’s financial and economic crises between October 11 and 13 which is expected to affect dollar. Key US economic figures would also play roles in dollars.

Regarding Thai stock exchange, the SET index ended last Friday at 451.96 points, down 23.40% from 590.05 points recorded previous Friday. The prime indicator plunged 47.33% from the end of 2007.

Thai stocks’ total trading value last week was up 43.95% from 58.70 billion baht from the week before to be 84.50 billion baht. Trading value per day increased from 11.74 billion baht to 16.90 billion baht.

Source : National News Bureau, Public Relations Department of Thailand

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