ASEAN KEY DESTINATIONS
August 10, 2007
SET plummets in tandem with global market slump
The Stock Exchange of Thailand’s composite index plunged more than 21 points at an opening bell of Friday morning trading session in line with the stock market slump around the world upon concerns over a domino effect from sub-prime lending woes in the United States.
However, the index had later recouped its loss and managed to close at 797 points, down 14.83 or 1.83%, with a trading value of 10.42 billion baht in the morning session.
An analyst said the SET index plummeted in the same direction with global markets after the French bank, BNP Paribas, announced a suspension of three funds because they incurred losses from investment in the sub-prime mortgage markets in the US.
In addition, the Goldman Sachs’ fund in the US had experienced huge losses, making investors the world over worry that the sub-prime lending woes would have a domino effect on other economic sectors.
The analyst expected the situation on the sub-prime loan concerns would drag on until next week.
However, SET president Patareeya Benjapolchai warned investors not to sell shares heavily in a panic mood although the index continued to drop on a selling pressure from foreign investors.
She said foreign investors still had a net buy of 110 billion baht in the Thai stock market.
The sharp decline in the index was attributed by a plummet in the Dow Jones Industrial Index in a midst of concerns over the sub-prime lending woes.
Although the investment sentiment in the stock market was unfavourable, the SET chief said, she was confident it would not affect a listing of companies and the initial public offering of new shares in the bourse this year since the overall investment remained sound in the long term.
She believed 64 companies would be listed on the stock market as targeted by this year.