Olarn : 60 billion baht funds to shore up Thai stocks

Written by Writer on Tuesday, October 28th, 2008

Olarn : 60 billion baht funds to shore up Thai stocks

Concerned parties in the Thai stock exchange would inject some 60 billion baht funds to shore up local bourse.

Deputy Prime Minister Dr. Olarn Chaipravat said on Monday (October 27) that he would encourage existing funds to shore up Thai stocks after it took another 10.5% nosedive on Monday, in line with global bourses’.

The Stock Exchange of Thailand (SET) suspended trading for half and hour on Monday afternoon after the main index fell 10%. It was the third time in the SET’s 33 years history that trading has been suspended. The benchmark SET Index closed 10.5% lower at 387.43, the lowest level since May 2003.

Foreign investors, the dominant group in the Thai bourse, were still net sellers on Monday amounting to 2.1 billion baht.

Asian and European exchanges faced relatively massive sell-off on Monday, fearing of contagion in the emerging stock exchanges.

The gloomy outlook is still dominating Asian stock exchanges this morning (October 28).

The funds shoring up Thai stocks would include Stock Exchange of Thailand (SET) and local brokerage firms’ jointly established funds, funds from state-run Government Savings and Krung Thai banks. The combined amount would be some 40 billion baht.

Another 20 billion baht would be from Thailand’s energy conglomerate PTT group which would be concentrating on shoring up PTT and affiliates’ stocks.

Dr. Olarn also said that foreign investors still invested in the Thai bourse at the moment amounting to some 90 billion baht after they kept selling the Thai stocks since eruption of US financial crises.

However, he noted that if they kept selling at prevailing amount, all the foreign funds would be drained out of the Thai stock exchange by 45 days.

The Thai bourse’s total market capitalization has plunged a record 353 billion baht compared with last Friday to 3.10 trillion baht on Monday.

NNT : National News Bureau of Thailand
Tuesday October 28, 2008