SINGAPORE, Dec 3 — Thai shares jumped today on hopes of easing political tensions after the government ordered police to avoid violence, while other Southeast Asian equities traded mixed as unexpectedly strong US factory activity bolstered expectations the Federal Reserve would soon trim its stimulus.
Thailand’s SET index was up 0.9 per cent, hovering near a two-week high by 0549 GMT (1349 Malaysian time), led by financial stocks.
“We see some confidence in the market with the tension easing after the police were asked to step back,” said Teerada Charnyingyong, Bangkok-based strategist of broker Phillip Securities.
“But there are a lot of uncertainties. Foreign investors are on the selling side and we do not see much foreign activities in the coming days due to upcoming holidays.”
She said shares related to tourism will be “heavily hit” if the protest continues, though this is a good time to buy them as they have fallen to attractive price levels.
Foreign investors yesterday sold 6.38 billion baht (RM630 million) worth of shares, extending the foreign outflow to 12.69 billion baht in the last four straight sessions.
The Thai government said today it had ordered police confronting anti-government protesters in capital Bangkok to stand down to avoid violence.
Thailand’s finance ministry said the 2013 economic growth forecast may be 3 per cent, down from the scaled-down 3.7 per cent seen in September, due to the impact of ongoing anti-government protests, while the country’s consumer confidence fell to a near two-year low.
The Thai baht also dipped in thin trading on sustained tensions that have been driving investors out of the country.
Gary Dugan, chief investment officer for Asia and the Middle East at private bank Coutts, said in a client note though Coutts is looking for entry points in Thailand, it has concluded that the time for investing is still not ideal as political protests continue.
He said the Thai SET Index was trading on a price multiple of 12.1 times expected earnings over the next 12 months and 10.7 times for 2015.
“As it stands, we believe that a suitable re-entry point will only be justified when the price to earnings multiple is below 10 times. If the protests continue, we may get there,” Dugan said.
Other markets were trading slightly weaker-to-firmer amid fears the US Fed could start tapering its asset-buying programme after unexpectedly strong factory activity.
Malaysia’s broader index hit a record high of 1,840.12, surpassing its all-time peak of 1,826.22 touched on May 13. The index was up 0.5 per cent in the midday.
Singapore’s Straits Times Index was up 0.1 per cent and Vietnam’s benchmark VN Index was up 1.2 per cent.
Jakarta shares lost 0.8 per cent, underperforming most regional stocks, while the Philippines index dropped 0.3 per cent. — Reuters
