Bangkok--11 Mar--SET
In February, the SET Index improved over the previous month due to Thailand’s continued economic recovery and foreign investment. As a result, the SET Index soared at a higher rate than other regional exchanges, pulling market capitalization up with it. The listing of a large firm also boosted market capitalization.
Daily average trading value in February dropped over the pervious month due to Chinese New Year holidays and probably a slowdown in trading activity as investors waited for the political situation to clear up. In February, foreign investors returned to be net buyers after being net sellers for the past three months.
Thailand Futures Exchange PCL (TFEX) daily average trading volume rose in February on a month-on-month basis, because fluctuating global gold prices resulted in increased gold futures trading.
More funds were raised in February was higher than in January 2010, due to the listing of Indorama Ventures PCL, which had a high market capitalization. As of end-February 2010, the company’s market capitalization was THB53.31 billion (approx. USD1.63 billion), ranking it as 24th among all SET-listed securities in terms of market capital. Meanwhile, the companies regularly made seasonal equity offerings (SEOs) for various purposes, including for business expansion and working capital.
Performance Overview
As of end-February, the SET Index and most of Asia regional exchanges’ indices increased, due to positive economic indicators. Even though there were concerns over the economic situation in Greece, foreign investors gave more interest in investing in emerging markets. The SET Index increased at a higher rate than that of other regional exchanges, partly resulting from positive domestic factors, including an expansion of gross domestic product (GDP) of 5.8%[1] in Q4/2009 from Q4/2008, a reversal of the continued drawback in the previous four quarters, and the announcement of some listed firms’ dividend payment and improved operating performances in Q4/2009 and 2009. As of end-February, the SET Index closed at 721.37, an increase of 3.56% month-on-month, while the Market for Alternative Investment (mai) closed at 212.16, an increase of 1.00% month-on-month. Total SET and mai market capitalization was THB5.54 trillion (approx. USD169.65 billion), up 4.14% over the previous month.
As of end-February, the SET’s forward P/E ratio was 10.9, up from 10.5 at end-January 2010 and 7.7 in February 2009. This increase was due mainly to the rise of the SET Index.
Trading activity
In February, daily average trading value was relatively low due to the Chinese New Year holidays and unclear political situation. However, total trading value rose during the last week of the month, partly resulting from the court order allowing nine projects in Map Ta Phut Industrial Estate, which related to large listed firms, to resume constructions. Total SET and mai trading value was THB284.91 billion (approx. USD8.72 billion), while daily average trading value was THB14.25 billion (approx. approx. USD436.05 million), a month-on-month drop of 25.13%. However, daily average trading value increased 91.42% year-on-year.
In terms of SET and mai trading value by customer type in February, the role of foreign investors rose, as their share of total trading value increased to 23.62%, from 21.95% the previous month, and they also changed from being net sellers for three consecutive months to be net buyers of THB5.41 billion (approx. USD165.63 million). Retail investors were net sellers of THB10.86 billion (approx. USD332.38 million) in February 2010, and their share of total trading value decreased to 53.28%. Lastly, in February, local institutional investors were the net buyers of THB5.84 billion (approx. USD178.91 million), while securities companies were net sellers of THB397.24 million (approx. USD 12.16 million).
Trading by industry group in February showed that the shares of trading value of the Resources and Banking Groups was 32.91% and 23.70%, respectively, which was relatively stable on a month-on-month basis. Meanwhile, the share of trading value of the Petrochemical and Chemical Group increased to 7.60%, from 4.51% in January 2010, due mainly to trading of the new listing (Indorama Ventures PCL).
Trading of the top-ten securities, ranked by market capitalization, increased to 43.26% from 38.15% a month earlier. The share of trading value of the top 11-30 securities ranked by market capitalizations decreased to 25.82%, after continuous rises in the previous four consecutive months.
Number of trading accounts
After dropping for two consecutive months (November — December 2009), the number of trading accounts increased, in accordance with the rise in trading activity. Meanwhile, of the total trading accounts, in January 2010, 23.11% were active, with an average trading value per account of THB2.92 million (approx. USD0.09 million). These figures were slight improvements over December 2009, when the active rate was 21.50% of total trading accounts, with an average trading value of THB2.59 million (approx. USD0.08 million). The number of Internet trading accounts in January 2010 was 49,288 accounts, an increase of 9.18% over December 2009. Internet rading accounted for 21.32% of total trading value in January 2010, up from 19.79% in December 2009.
Overview of the derivatives market
In February, daily average trading volume increased at 7.79% over January 2010 as gold futures trading increased, due to fluctuation in global gold prices. In February, total trading volume reached 280,128 contracts, with a daily average trading volume of 14,009 contracts, increasing from 12,997 contracts in January 2010. Moreover, in February, gold futures made a new high in daily average trading volume of 3,956 contracts, compared to its record in December 2009 of 3,861 contacts. On February 5, 2010, gold futures trading reached its highest point at 8,496 contracts, when the underlying gold price on that day dropped to USD50 per Troy ounce.
Overview of funds raised [2]
In February, the funds raised by listed companies increased fourfold on a month-on-month basis, due to the listing of Indorama Ventures PCL (IVL). Meanwhile, companies regularly made seasonal equity offerings (SEOs). In February, listed companies raised a total of THB5.49 billion (approx. USD168.08 million), consisting IVL’s THB4.69 billion (approx. USD143.62 million) through an IPO and THB799 million (approx. USD24.46 million through SEO. Most of the SEO funds were raised by Power Line Engineering PCL (PLE), which raised THB266 million (approx. USD6.92 million) to use as working capital and on new projects and by Thai Film Industries PCL (TFI) of THB300 million (approx. USD9.18 million) for working capital and debt repayment.
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