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 Stock Market
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05 Jan 07 07:56
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SET to discuss bombing impact with foreign brokers
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TNA
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BANGKOK, Jan 5 - The Stock Exchange of Thailand and the Federation of Thai Capital Market Organisations plan to meet with 10 foreign brokerage houses on Monday to assess impacts of the New Year's Eve bombings and the 30 per cent reserve requirement.
Vichet Tantivanich, Senior Executive Vice President of SET, said the main issues to be discussed include ways to cooperate to restore confidence following a series of bomb blasts in the capital on the New Year's Eve and worries by foreign investors over the mandatory reserve on short-term capital inflows imposed by the Bank of Thailand.
Although the capital control measures would exempt foreign currencies brought into the country for stock investments, he said, international investors remain anxious about higher costs of fund raising through debt
instruments.
"Originally, the Federation of Thai Capital Market Organisations planned to meet with foreign brokerage houses (later) in the first quarter of this year. But due to the New Year's Eve bombings in Bangkok, it brought forward the meeting," Mr. Vichet explained.
"Foreign investors dumped Thai shares heavily late last year upon worries about the capital control measure despite the fact that economic fundamentals and profits of listed companies remain sound," he said.
Mr. Vichet added SET would attempt to increase a portion of institutional investors in place of foreign investors, who reduced their position.
It appears that more people are interested in buying insurance following the explosions in the city.
Under the circumstances, life and non-life insurance firms need to find investment channels in a bid to provide more yields to the insured. The stock market is one of the attractive investment channels the insurance firms could count on.
Mr. Vichet believes the selling pressure by foreign investors for this year would ease as compared to last December since hedge funds had already sold off many shares before the end of the accounting year.
He said around Bt83 billion left unsold by foreign investors is expected to become long-term investments. But it is understood that some investors are in a wait-and-see mode for the time being. (TNA)
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