Bangkok--20 Apr--SET
In Q1/2010, The Stock Exchange (SET)’s performance overview improved both in terms of the SET Index and market capitalization. Trading value was slightly down quarter-on-quarter (q-o-q), yet it was still considered to be high. As of end-Q1/2010, the SET Index was 7.28% higher than at end-2009; this index rise was the second highest in percentage terms among other regional exchange indices, due to the Thai economic recovery and funds flowing from foreign investors to Asian markets, which have stronger economic foundations than those of developed countries. Market capitalization was THB 6.37 trillion (USD 0.19 trillion), a 7.79% rise over Q4/2009, as a result of the Index rise.
Q1/2010’s daily average trading value was THB 19.59 billion (USD 606.49 million), 4.98% down from Q4/2009, but still higher than 2009’s daily average trading value of THB 18.27 billion (USD 564.36 million). Trading activity increased significantly in the second half of the quarter, with foreign investors having a net buy position from February 22 to March 31. In Q1/2010, foreigners were net buyers, with a position of THB 42.47 billion (USD 1.32 billion), higher than THB 38.01 billion (USD 1.18 billion) in 2009.
For an overview of derivatives trading in Q1/2010, the daily average trading volume was 14,599 contracts, 7.95% down from Q4/2009, due mainly to the lowered volume of SET50 Index Futures that was down for 11.21%. However, daily trading volume was still showed a 69.34% increase year-on-year (y-o-y) from Q1/2009.
In terms of funds raised in Q1/2010, listed companies raised equity of THB 10.26 billion (USD 317.66 million), a 7.58% increase from Q4/2009, consisting of THB 4.69 billion (USD 145.28 million) through the IPO of Indorama Ventures PCL (IVL) and THB 5.57 billion (USD 172.37 million) in seasonal equity offerings (SEOs).
An exchange performance overview for March 2010, shows that the SET index rose 9.23% month-on-month, the highest growth rate among regional exchanges. Foreign investors were net buyers on every trading day, with a net buy position of THB 44.57 billion (USD 1.38 billion) in March, the highest in 51 months since January 2006. Trading activity was significantly higher than in February, with a daily average trading value of THB 24.95 billion (USD 772.62 million), soaring 75.16% over the February value. The daily average trading volume for derivatives products was 16,592 contracts, up 18.44% over the previous month.
1. Performance Overview
At end-Q1/2010, the SET Index closed at 787.98, up 7.28% from end-2009, which was the second-highest rise when compared to other regional exchanges’ indices, with Indonesia as the highest. The increase was due to the Thai economic recovery and funds from foreigners going to Asian markets, which have stronger economic foundations than among developed countries. Overall economic and business indicators marked a continuous recovery, as Q4/2009 Thailand’s gross domestic product (GDP) was 5.80% higher than in Q4/2008. Both domestic and global demands increased, and listed company operating performance improved, with 2009 net profit soaring 44.08% rose over the comparable 2008 figure due to improved business efficiency. In addition, the Thai bourse benefited from high liquidity in the global market, and from investors’ interest in Asian emerging markets with stronger economic foundations and higher expected growth comparing to developed countries that have fragile economic recoveries, financial institution crises, high unemployment rates, and/or limitations in implementing stimulus plans. For these reasons, analysts, such as those of Morgan Stanley and CLSA, gave positive recommendations for investing through the Thai bourse in Q1/2010.
Having a higher SET Index resulted in SET’s Forward P/E ratio to increase to 11.9 times from 10.9 in Q1/2009. However, the mai Index closed at 212.43, 1.33% down from end-2009. As at end- Q1/2010, the SET and mai’s combined market capitalization was THB 6.37 trillion (USD 0.19 trillion), up 7.79% over end-2009, as a result of the Index increase.
In March 2010, the SET Index increased 9.23% m-o-m, moving in the same direction with all other East Asian markets, with the Thai bourse having highest growth rate. Positive factors for the Thai market was that foreigners were net buyers on every trading day, while political unrest did not affect investors’ confidences as to investing in Thai bourse buyers forecast that differences would be resolved with no violence. In addition, Morgan Stanley recommended an “overweight” position, up from a previous “equal-weight” recommendation. The adjustment was due mainly to the country’s strong economic foundations and attractive stock prices. However, the mai Index in March 2010 closed at 212.43, relatively unchanged from 212.16 at the end of the previous month.
2. Trading activity
In Q1/2010, the combined daily average trading value (for SET and mai) dramatically increased from Q1/2009, yet was slightly lower than in Q4/2009. In Q1/2010, total trading value was THB 1.21 trillion. Daily average trading value was THB 19.59 billion (USD 606.49 million), a massive 121.29% increase over Q1/2009, marking the market recovery and regaining of investor confidence. However, daily average trading value was 4.98% down from the THB 20.61 billion (USD 638.29 million) in Q4/2009. This dip was due to a slowdown in the first half of the quarter as a result of uncertainty over the global economic recovery, the traditional Chinese New Year break, the Map Ta Phut Industrial Estate case verdict, and the court-ordered seizure of a former prime minister’s assets. However, trading activity improved from mid-February through March, with continuous inflows from foreigners. For Q1/2010, trading value bottomed at THB 7.74 billion (USD 239.79 million) on February 15, and peaked at THB 42.41 billion (USD 1.31 billion) on March 22. Overall, the daily average trading value of Q1/2010 was higher than THB 18.23 billion (USD 564.36 million) in 2009, representing good trend in trading activity.
In terms of trading value by customer type in Q1/2010, foreigners were net buyers, with a position of THB 42.47 billion (USD 1.32 billion), higher than the foreign investors’ net buy position of THB 38.01 billion (USD 1.18 billion) in 2009. Foreigners increased their share of trading to 22.02% of total trading value, up from 20.87% in Q4/2009. Trading for proprietary portfolios showed a net buy position of THB 641.43 million (USD 19.86 million), equal to 14.45% of total trading value, up from 13.83% in Q4/2009. In Q1/2010, local investors and local institutions were net sellers, with positions of THB 31.35 billion (USD 970.65 million) and THB 11.77 billion (USD 364.39 million) respectively. In Q1/2010, local investors accounted for only 55.87% of total trading value, down from 58.62% in Q4/2009, while local institutions’ share of total trading (by value) increased to 7.66%, up from 6.68% in Q4/2009.
The listing of Indorama Ventures PCL (IVL) resulted in the trading value of the Petrochemicals & Chemicals sector to soar to 6.03% of total trading value in Q1/2010, up from 2.27% in Q4/2009, while the proportion of other industry groups was relatively unchanged from Q4/2009. Trading of the top-ten securities (in terms of market capitalization) decreased to 39.42% in Q1/2010 from 40.75% in Q4/2009, while the top 11-30 securities boosted their share of trading value sharply to 28.40% over 23.92% in Q4/2009.
In March 2010, daily average trading value was THB 24.95 billion (USD 772.62 million), sharply up by 75.16% m-o-m, due to the continuous fund inflows from foreign investors. In March 2010, foreign investors were net buyers on every trading day, with a net buy position of THB 44.57 billion (USD 1.38 billion), the highest in 51 months since THB 74.82 billion (USD 2.31 billion) in January 2006, and higher than THB 38.01 billion (USD 1.18 billion) foreign investor net buy position in 2009.
Proprietary traders were also net buyers in March 2010, with a net buy position of THB 3.11 billion (USD 96.19 million). Local investors and local institutions were net sellers, with net sell positions of THB 38.30 billion (USD 1.19 billion) and THB 9.37 billion (USD 290.27 million) respectively, while local institutions were net buyers, at THB 5.84 billion (USD 180.98 million) in February 2010.
Trading value by industry group in March 2010 showed the proportion of trading value of the Energy Group dropped to 29.62% from 32.91% in February, while that of the Banking Group and Property Development Sector increased to 26.62% and 8.52%, respectively, from 23.70% and 7.01%, respectively, in February.
For trading value by market capitalization, the proportion of the top-ten securities decreased to 38.32% from 43.35% in February, while proportion of top 11-30 and top 31-50 securities went up to 26.79% and 12.43% over 25.82% and 9.58%, respectively, in February.
3. Active trading accounts
In February, the number of active trading accounts decreased along with trading value that slowed due to the Chinese New Year long holiday and investors’ holding back as they waited to see clearer directions of politics at end-February. Of all trading accounts, 19.35% were active, with an average trading value of THB 2.59 million (USD 0.08 million) for February, down from 23.11% and THB 2.92 million (USD 0.09 million) in January.
For internet trading, the ration of active accounts was 42,541, down 13.69% from January, and internet trading value was 20.35% of total trading value, down from 21.32% in January.
4. Overview of the derivatives market
In Q1/2010, total derivatives trading volume reached 905,153 contracts, with a daily average trading volume of 14,599 contracts, a 7.95% drop from Q4/2009 due mainly to a 11.21% decrease in trading of SET50 Index Futures. However, compared to Q1/2009, daily average trading volume was up by 69.34%, with increases in all derivatives products. In particular, gold futures rose sharply, by five times (508.01%), and single stock futures went up seven times (778.36%) in volume.
In March 2010, total derivatives trading volume reached 365,026 contracts, the highest since TFEX began operations in April 2006, with a daily average trading volume of 16,592 contracts, up 18.44 % over February’s figures. This increase was due to trading of SET50 Index futures and single stock futures, which went up by 42.57% and 42.50 %, respectively, over February. Trading volume of gold futures plummeted by 46.81% from February, as investors shifted to equity or derivatives with equity as the underlying products, as the SET Index constantly went up and gold prices were stable.
5. Overview of funds raised
In Q1/2010, listed companies raised a total of THB 10.26 billion (USD 317.66 million), up 7.58% from Q4/2009, consisting of THB 4.69 billion (USD 145.28 million) (45.74% of total funds raised) from the IPO of Indorama Ventures PCL (IVL) and THB 5.57 billion (USD 172.37 million) in seasonal equity offerings (SEOs). Among the SEOs was THB 2.28 billion (USD 70.63 million) in rights offerings, THB 2.17 billion (USD 67.31 million) in warrants, and THB 1.11 billion (USD 34.42 million) in private placements. The total funds raised in Q1/2010 was a 14.23% drop from Q1/2009, due to smaller SEOs.
In terms of funds raised by industry group, the Industrials Group raised at THB 5.16 billion (USD 159.71 million) (or 50.28 % of total funds raised), while the Property & Construction Group raised THB 1.78 billion (USD 55.03 million) (or 17.32 % of total fund raised).
In March 2010, listed companies raised a total of THB 2.50 billion (USD 77.51 million), a sharp 62.19% drop from February and a 44.90% plunge from March 2009, all done through SEOs — a THB 757.93 million (USD 23.46 million) by Angpao Assets PCL (A-PAO) via private placement and THB 382.21 million (USD 11.83 million) by Kiatnakin Bank PCL (KK) via warrants.
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