After a big slump in one-day trading on Friday, the Thai stock market rebounded strongly on Monday with a rise of 44.98 points, or 3.04%, following news that Cyprus received its bailout loan that will end the uncertainty afflicting the eurozone.
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The Stock Exchange of Thailand dropped by 50.55 points on Friday, or 3.3%, with a record trading value of 101.36 billion baht, on concerns of tightening measures to curb speculation and a rumour about government instability.
After the good news from Europe that help spur a rally in Asian equities and the euro, Thai stocks posted the biggest gain in Asia. The market is poised for its steepest advance in nine months. The gauge dropped 7.5% last week, the most since November 2008.
Cyprus will get the first tranche of a 10-billion euro international bailout in early May, Klaus Regling, the head of the eurozone bailout fund, the European Stability Mechanism, said on Monday.
The head of the International Monetary Fund, Christine Lagarde, said after a meeting of eurozone finance ministers who agreed to the bailout that she would recommend to the board of the IMF that they should take part in the programme, but did not specify the amount.
Tense negotiations between Cyprus and its international creditors yielded a preliminary agreement early Monday that paves the way for the cash-strapped island nation to receive a 10 billion euro (US$13 billion) bailout, a diplomat said.
On the Thai stock market, it is expected that Thailand's equities will rebound as domestic liquidity and economic growth will lure local individual investors, Dan Fineman and Siriporn Sothikul, analysts at Credit Suisse, wrote in a note today. The recent slide in Thai shares is overdone and offers a good buying opportunity, Hozefa Topiwalla and Aarti Shah, analysts at Morgan Stanley, said in a separate report.
A number of stocks have been oversold and offer very attractive prices for investments, Monthol Junchaya, chief investment officer at Bangkok-based One Asset Management Ltd., which manages about $2.5 billion of assets, said by phone today. Most investors realise the need to buy back some shares to cover their positions after last week's panic selloff.
The 3.3% drop on March 22 was the steepest loss since October 2011, on concern the bourse may raise margin requirements on trading. The exchange may increase the level of collateral that customers must maintain in their trading accounts to 20% of their credit line, from 15%, the bourse said in a statement on March 21.
Sompol Kiatphaibool, chairman of the Stock Exchange of Thailand, is confident that foreign investors will continue to buy Thai stocks despite the high fluctuation.
He advised retail investors to be cautious with their investments and should pick stocks with good foundations and base their decisions on the country's economic stability.
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Article source: http://www.thethailandlinks.com/2013/03/25/thai-stocks-rebound-strongly/
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