The Stock Exchange of Thailand (SET) index Monday reached its highest level in nearly 24 years, but this was not deemed a financial bubble as the index's price-to-earnings (P/E) ratio remains low.
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Tuesday noon update
Still rising at noon
The Stock Exchange of Thailand main index went up 0.15 points or 0.01% to close at 1,670.35 points at the end of trading session this morning. The trade value was 35.3 billion baht, with 7.5 billion shares traded.
Morning story
As SET nears 24-year high, bubble not feared
Nuntawun Polkuamdee
Darana Chudasri
The Stock Exchange of Thailand (SET) index Monday continued its rally, reaching the highest level in nearly 24 years, but such brisk equity trading was not deemed a financial bubble as the index's price-to-earnings (P/E) ratio remains low.
The Thai bourse closed at 1,670.2 points, up 0.6%, in heavy turnover worth 67.8 billion baht. The SET climbed to 1,678.23 points at one point Monday,, considered the highest in almost 24 years.
The last time the SET index reached an all-time high was January 1994, where the bourse rose to 1,753.73 points.
The bourse tumbled significantly during the 1997-98 Asian financial crisis, falling to 214.53 points in August 1998.
Foreign investors were the highest net buyers at 1.98 billion baht, followed by institutional investors at 1.18 billion and brokerage firms at 533 million, while retail investors sold 3.7 billion baht worth.
Heavy turnover seen in the Thai bourse was in line with the upward trend of regional stock markets, with the Philippine Stock Exchange index hitting a record high of 8,291.14 points, up 1.38%.
The SET's stock rally was led by purchases of large-cap equities in the energy, telecom, consumer goods, and construction sectors such as PTT (+1%), PTTEP (+1.4%), SCC (+1.6%), and TRUE (+5%).
Despite the SET index climbing sharply over the past three weeks, the bourse is not overheating and there is no sign of a financial bubble forming in the stock market, said Paiboon Nalinthrangkurn, president of the Investment Analysts Association and chief executive at Tisco Securities.
Foreign funds have shifted from stock markets in Indonesia and Vietnam to Thai stocks due to the Indonesian and Vietnamese stock markets rising about 15-20% earlier, bringing investors to seek new opportunities in the SET, which is considered a laggard market with buoyant economic growth outlook, Mr Paiboon said.
High financial liquidity in the global financial markets and the low interest rate environment worldwide are also factors prompting foreign fund flows to channel into the Thai bourse, he said.
"The SET index rose about 1-2% during the first eight months of this year and has risen around 5% this month," he said. "No financial bubble is forming in the SET despite some concerns as the index has risen sharply for merely one month, while the [P/E] ratio of the SET is about 16-17 times, considerably lower than regional peers."
You can read the full story here: http://www.bangkokpost.com/business/finance/1326783/as-set-nears-24-year-high-bubble-not-feared
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