Bangkok--11 Feb--SET
In January 2010, the Thai exchange’s indices dropped, in line with most regional exchanges. This drop was due to concerns over global economic recovery after China launched measures to strictly control loans granted by financial institutions and the limitation on investment transactions of financial institutions in the United States. Moreover, the Thai bourse was affected by domestic political risk.
However, daily average trading value in January 2010 increased over the previous month and exceeded the daily average trading value of 2009. In January 2010, retail investors were net buyers, while foreign investors and local institutional investors were net sellers.
The number of active trading accounts increased, whether trading was through investor contact or Internet accounts in 2009, reflecting investors’ rising interest. Derivatives trading in January 2010 showed that daily average trading volume decreased over the previous month, but increased over January 2009. This rise over the past 12 months was a result of the new product launched (gold futures) and an increase of the underlying stocks in single stock futures.
Operating performance of firms in the Banking sector in 2009 improved over 2008. Most banks posted a significant increase in non-interest revenues in year-on-year comparisons, as there was no loss in investment capital, and they enjoyed rises in fee income. Q4/2009’s net profits increased over Q4/2008 as well, as there was no loss in investment capital. Overall, expansion in bank loans was at a steady rate, and banks were able to control non-performing loans more effectively.
Performance overview
As of January 31, 2010, the SET Index declined 5.17% over end-December 2009, in line with drops throughout the region. The SET Index in the H1/January was affected by positive factors from the rise of regional exchanges’ indices combined with continual increase in global oil prices. The SET Index peaked at 746.89 on January 18, 2010. However, in H2/January 2010, the SET Index continued to drop for eight days, due to the pressure from the drops in regional exchanges’ indices, concerns over China’s measures to strictly control loans granted by financial institutions, the limitation on investment transactions of financial institutions in the United States and the domestic political situation. As of January 2010, the SET Index closed at 696.55, a decrease of 5.17% over December 2009, while the mai Index closed at 210.06, down 2.43% over December 2009. SET and mai market capitalization as of January 2010 was at THB5.61 trillion (USD169.03 billion), a drop of 5.11% over December 2009. SET’s forward P/E ratio as of January 2010 was at 10.5, rising from 7.4 in January 2009, as a result of an increase of the SET Index in 2009.
Trading value in 2009 of Thailand vis-a-vis the regional exchanges showed that the Thai exchange’s trading value increased 8.6% over 2008, which was considered good compared to other Asia Pacific exchanges1, which increased only 2.5%. Meanwhile, the Thai exchange’s trading value in January 2010 reached USD11 billion.
Trading activitiesIn January 2010, daily average trading value increased month-on-month and was higher than daily average trading value in 2009. SET and mai total trading value in January 2010 was THB380.54 billion (approx. USD11.47 billion), with average trading value in January 2010 of THB19.03 billion (approx. USD0.57 billion), up 21.70% over December 2009 or an increase of 77.37% over January 2009. It was also higher than the daily average trading value in 2009, which was THB18.23 billion (approx. USD0.50 billion).
In terms of total trading value by customer type of SET and mai in January 2010, retail investors recorded the highest trading value, at 56.4% of total trading value. Retail investors continued to be net buyers, especially when the SET Index dropped, and had a net buy position of THB17.81 billion (approx. USD0.54 billion). Meanwhile, local institutional investors continued to be net sellers, for a net sell position of THB8.24 billion (approx. USD0.25 billion). It was the first month that local institutional investors were net sellers after being net buyers for two consecutive months. Meanwhile, foreign investors had net sell position, totaling THB7.50 billion (approx. USD0.23 billion), being net sellers for three consecutive months.
Looking at industry group, trading value in Energy Group dropped, while Banking and Information & Communication Technology Group increased over December 2009. The share of trading value of the Energy Industry Group decreased from 37% in the previous month to 34%, while the share of trading value in Banking sector increased to 24% after dropping for the past two months. The share of trading value in Information & Communication Technology rose from 3% in December 2009 to 5%. The share of trading value by market capitalization in January 2010 showed that the share of the top-ten securities of SET50 ranked by market capitalization decreased, while the share of trading value in top 11-30 securities of SET50 ranked by market capitalization continued to rise for four consecutive months. In January 2010, the share of trading value in top 11-30 securities of SET50 ranked by market capitalization increased from to 33% from 27% in December 2009.
Number of active trading accounts
In 2009, overview of monthly active trading accounts increased. As of December 2009, such accounts reached 120,668, up 28.8% over December 2008, when the number was at 93,671 accounts. The increase in number of accounts reflects the investors’ rising interest as the SET Index recovered in 2009. However, the number of active trading accounts in December 2009 dropped for two consecutive months from October 2009, partially due to seasonality as investors entered the holiday season. The number of active trading accounts in December dropped for two consecutive months from October 2009, when the number reached its peak in 2009 at 145,727 accounts. The average active rate in 2009 was at 20.9% of total trading accounts, almost the same as the 20.5% in 2008. Internet trading accounts and Internet trading value in 2009 continued to grow, partially a result of marketing activities to promote Internet trading. There were 45,143 active Internet trading accounts in December 2009, jumping 57.2% year-on-year, when there were just 28,709 such accounts. The proportion of trading value through the Internet was at 20.9% in 2009, an increase of 15.9% over 2008.
Overview of the derivatives market
In January 2010, Thailand Futures Exchange PCL (TFEX) recorded a total trading volume of 259,949 contracts, averaging 12,997 contracts per day, which was a month-on-month drop of 12.48%. There was a drop in trading volume of every derivatives product except single stock futures, which rose at 18.93% month-on-month. Derivatives trading volume in January 2010 increased by 31.45% over January 2009, thanks to the launch of gold futures and an increase of the number of underlying stocks in single stock futures.
Overview of funds raised2
In January 2010, listed companies raised THB893 million (approx. USD26.91 million) through equities, showing a year-on-year improvement due to mirroring the improved economic and market situations. In January 2010, the only funds raised were through seasonal equity offerings (SEOs), with 91% of the total being raised by Country Group Securities PCL (CGS) of THB603.71 million (approx. USD18.19 million) and IRPC PCL (IRPC) of THB 204.80 million (approx. USD6.17 million). The value of the funds raised in January 2010 dropped over December 2009’s THB2.14 billion (approx. USD64.63 million), but was more than the THB215 million (approx. USD6.48 million) raised in January 2009.
Special Topics
1. Report on the Banking Sector's operating performance for Q4/2009
The Banking sector3’s net profits in 2009 increased over 2008, with Q4/2009 improved over Q4/2008. Net profits in Banking sector in 2009 was at THB91.15 billion (approx. USD2.75 billion) (consolidated financial statements), an increase of 9.26% over 2008. Most banks posted a significant increase in non-interest revenue over 2008, as there was no loss in investment capital and rises in fee income. Meanwhile, Banking sector’s net profits in Q4/2009 was at THB22.89 billion (approx. USD0.69 billion), soaring 90.18% over Q4/2008 figures. The major reason contributing to this increase was that there was no loss in the investment capital. Bank loan expansion in 20094 decreased by 1.8% over 2008, which was in according with a decrease in loans in business sectors. However, assets control improved, as shown by the rate of gross NPLs to total loans at end-2009 being 4.8%, a decrease from the 5.3% as of end-2008, while liquidity in banking sector rose. As of end-2009, the proportion of Loan/Deposit and bills of exchange Ratio decreased to 85.8% compared to 88.3% as of end-2008.
2. The progress of the ASEAN Linkage project
ASEAN Exchanges appointed NYSE Technologies as the solution provider for the ASEAN Trading Link at the 10th ASEAN Exchanges CEOs Meeting on February 8, 2010. The Trading Link will interconnect electronically the participating equities markets and help facilitate cross-border order routing and trading. Investors and members of the participating ASEAN Exchanges will be able to trade multiple ASEAN markets from their countries of domicile. With this link, participating ASEAN Exchanges can connect to external order routing networks to attract new order flows into the ASEAN equities market. NYSE Technologies’ advanced technology and network will help increase trading transactions on SET and increase investment channels for Thai investors. The SET will hold marketing activities to promote and prepare readiness for member companies and Thai investors to understand and be informed of the ASEAN Linkage, including the benefits of this project.
1 Calculated from trading value of members of World Federation of Exchange
2 Include the fund raised of listed firms, property funds and non-performing group
3 Banking group using in this calculation is the banks that listed on SET