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| STI as at 23 Jan 2014 |
Friday, 23 January 2015
The Straits Times Index has broken through the 3400 points barrier
Thursday, 15 January 2015
What is the take for the stock market for 2015?
In China, the SSE Composite Index had risen 34% in the last 2 months, and the number of new share account opening had risen 7-fold compared to the same quarter the previous year.
And now in Thailand, it would appear that the same is happening. Large number of people who do not normally invest in shares are now joining the band-wagon, hoping to make good money from the stock market after seeing their friends doing so; that is normally a precursor to a market fall.
My take for 2015 would be that it would be highly volatile, and could possibly initiate a bear run till middle of next year. Get ready your kitty to pick up the good stocks when the market falls.
Housewife’s Small-Cap Fever Masks Valuation Risk: Southeast Asia
2015-01-14 17:01:00.0 GMT
By Anuchit Nguyen
(Bloomberg) -- Truengjai Tinmathikul, a 60-year-old
housewife in Bangkok, used to spend most of her days playing
tennis. That was before Thailand’s market for small-
capitalization shares began surging.
Truengjai, who knew nothing about equities until about six
months ago, invested 300,000 baht ($9,148) after watching
friends profit from the boom. Her own trades have yet to pan
out, losing about 50 percent after she bought some of the
market’s highest-flying stocks just as they peaked.
“I just hope I can also enjoy the good fortune,” said
Truengjai, who cuts her tennis games short to track the market
from 10 a.m. each weekday morning. “The stock market has been
on a roll.”
Individuals are piling into Thailand’s small-caps stocks as
returns from alternative investments dwindle and traders
speculate the nation’s military government will revive economic
growth. While the flood of new money sent the nation’s MAI Index
to its biggest rally in a decade last year, the surge in
valuations to all-time highs is spurring concern that
inexperienced investors will get burned.
The Stock Exchange of Thailand, which runs the small-cap
Market for Alternative Investment, is taking steps to curb
speculation. It began requiring investors to pay cash upfront
for the purchase of any stock under a so-called trading alert
for unusual activity on Jan. 5, while investors have three days
to transfer funds for most other stocks.
Too Speculative
The bourse also said it will ban margin loans and suspend
trading in cases of prolonged unusual activity. It has curbed
transactions in 14 stocks this month through Jan. 13, according
to the exchange’s website. That compares with none in the same
period last year and five in the first 13 days of last month.
The small-cap gauge fell 0.1 percent yesterday to 753.76,
about 1 percent below its all-time high. The measure has risen
7.7 percent this month, recouping a 3.7 percent drop in
December. About 97 percent of investors in the MAI are
individuals, exchange data show.
“Many small stocks are too speculative as the surging
prices don’t justify their earnings,” said Montree Sornpaisarn,
chief executive officer of Maybank Kim Eng Securities (Thailand)
Pcl, the nation’s biggest stock brokerage. “The new measures
will help slow the speculative activities.”
The lack of attractive alternatives is driving individuals
into small-caps, said Veera Vutthikongsirigool, the chief
investment officer at Krung Thai Asset Management Co., which
oversees about $18 billion.
Stable Politics
Three-month deposits at four of the biggest banks in
Thailand pay an average 1.1 percent annual interest, while the
yield on 10-year government debt dropped to 2.4 percent on Jan.
13, a record low based on data compiled by Bloomberg going back
to August 2000. Spot gold, a traditional store of wealth in the
country of 67 million people, fell 1.2 percent in baht terms
last year for its second straight annual loss.
Growing demand for equities also reflects individuals’
confidence in the nation’s growth outlook after Prime Minister
Prayuth Chan-Ocha seized power in a military coup in May, ending
seven months of political turmoil. The government expects the
economic expansion to accelerate to as much as 4.5 percent this
year from about 1 percent in 2014.
“Retail investors are in need of better returns,” said
Veera. “With politics more stable, and higher equity prices,
retail investors just put their savings into the stock market,
especially in several small-cap stocks.”
Volumes Surge
The rally has boosted valuations to unprecedented levels.
The MAI Index trades at 6.1 times net assets, a record premium
over the 2.1 multiple for Thailand’s large-cap SET Index,
according to data compiled by Bloomberg.
Ua Withya, a manufacturer of electricity transmission
towers that was the MAI Index’s best performer last year, has
jumped 32 percent this month through yesterday and is valued at
25 times net assets. The stock soared more than 1,500 percent
last year even after a company filing showing its profit dropped
16 percent in the January-September period.
Stock trading on the MAI averaged 6.32 billion baht per day
from July through December, compared with 1.3 billion baht in
the first six months, according to stock exchange data. The
number of Thai brokerage accounts climbed to an all-time high of
1.08 million at the end of November.
Optimism among local investors contrasts with selling by
foreigners. Overseas money managers pulled a net $380 million
from the stock market this year through Jan. 13, after unloading
$1.1 billion of shares in 2014. Individuals have bought the
equivalent of $111 million this year, according to data compiled
by Bloomberg.
Truengjai, the housewife in Bangkok, is waiting for her
holdings to rally before cashing out.
“The stocks I hold are still much lower than the purchase
cost,” she said. “I am confident that they will rebound
eventually.”
For Related News and Information:
Thai Exchange Plans Curbs on Speculation After Small-Cap Surge
The 40% Stock Returns That Worry Aberdeen, PCCI: Southeast Asia
World equity valuations: WPE <GO>
Emerging-market news: NI EM <GO>
Emerging-market economic statistics: STAT4 <GO>
World equity index rankings: {WEIS <GO>
To contact the reporter on this story:
Anuchit Nguyen in Bangkok at +66-2-654-7308 or
anguyen@bloomberg.net
To contact the editors responsible for this story:
Michael Patterson at +852-2977-4820 or
mpatterson10@bloomberg.net
Phani Varahabhotla
And now in Thailand, it would appear that the same is happening. Large number of people who do not normally invest in shares are now joining the band-wagon, hoping to make good money from the stock market after seeing their friends doing so; that is normally a precursor to a market fall.
My take for 2015 would be that it would be highly volatile, and could possibly initiate a bear run till middle of next year. Get ready your kitty to pick up the good stocks when the market falls.
Housewife’s Small-Cap Fever Masks Valuation Risk: Southeast Asia
2015-01-14 17:01:00.0 GMT
By Anuchit Nguyen
(Bloomberg) -- Truengjai Tinmathikul, a 60-year-old
housewife in Bangkok, used to spend most of her days playing
tennis. That was before Thailand’s market for small-
capitalization shares began surging.
Truengjai, who knew nothing about equities until about six
months ago, invested 300,000 baht ($9,148) after watching
friends profit from the boom. Her own trades have yet to pan
out, losing about 50 percent after she bought some of the
market’s highest-flying stocks just as they peaked.
“I just hope I can also enjoy the good fortune,” said
Truengjai, who cuts her tennis games short to track the market
from 10 a.m. each weekday morning. “The stock market has been
on a roll.”
Individuals are piling into Thailand’s small-caps stocks as
returns from alternative investments dwindle and traders
speculate the nation’s military government will revive economic
growth. While the flood of new money sent the nation’s MAI Index
to its biggest rally in a decade last year, the surge in
valuations to all-time highs is spurring concern that
inexperienced investors will get burned.
The Stock Exchange of Thailand, which runs the small-cap
Market for Alternative Investment, is taking steps to curb
speculation. It began requiring investors to pay cash upfront
for the purchase of any stock under a so-called trading alert
for unusual activity on Jan. 5, while investors have three days
to transfer funds for most other stocks.
Too Speculative
The bourse also said it will ban margin loans and suspend
trading in cases of prolonged unusual activity. It has curbed
transactions in 14 stocks this month through Jan. 13, according
to the exchange’s website. That compares with none in the same
period last year and five in the first 13 days of last month.
The small-cap gauge fell 0.1 percent yesterday to 753.76,
about 1 percent below its all-time high. The measure has risen
7.7 percent this month, recouping a 3.7 percent drop in
December. About 97 percent of investors in the MAI are
individuals, exchange data show.
“Many small stocks are too speculative as the surging
prices don’t justify their earnings,” said Montree Sornpaisarn,
chief executive officer of Maybank Kim Eng Securities (Thailand)
Pcl, the nation’s biggest stock brokerage. “The new measures
will help slow the speculative activities.”
The lack of attractive alternatives is driving individuals
into small-caps, said Veera Vutthikongsirigool, the chief
investment officer at Krung Thai Asset Management Co., which
oversees about $18 billion.
Stable Politics
Three-month deposits at four of the biggest banks in
Thailand pay an average 1.1 percent annual interest, while the
yield on 10-year government debt dropped to 2.4 percent on Jan.
13, a record low based on data compiled by Bloomberg going back
to August 2000. Spot gold, a traditional store of wealth in the
country of 67 million people, fell 1.2 percent in baht terms
last year for its second straight annual loss.
Growing demand for equities also reflects individuals’
confidence in the nation’s growth outlook after Prime Minister
Prayuth Chan-Ocha seized power in a military coup in May, ending
seven months of political turmoil. The government expects the
economic expansion to accelerate to as much as 4.5 percent this
year from about 1 percent in 2014.
“Retail investors are in need of better returns,” said
Veera. “With politics more stable, and higher equity prices,
retail investors just put their savings into the stock market,
especially in several small-cap stocks.”
Volumes Surge
The rally has boosted valuations to unprecedented levels.
The MAI Index trades at 6.1 times net assets, a record premium
over the 2.1 multiple for Thailand’s large-cap SET Index,
according to data compiled by Bloomberg.
Ua Withya, a manufacturer of electricity transmission
towers that was the MAI Index’s best performer last year, has
jumped 32 percent this month through yesterday and is valued at
25 times net assets. The stock soared more than 1,500 percent
last year even after a company filing showing its profit dropped
16 percent in the January-September period.
Stock trading on the MAI averaged 6.32 billion baht per day
from July through December, compared with 1.3 billion baht in
the first six months, according to stock exchange data. The
number of Thai brokerage accounts climbed to an all-time high of
1.08 million at the end of November.
Optimism among local investors contrasts with selling by
foreigners. Overseas money managers pulled a net $380 million
from the stock market this year through Jan. 13, after unloading
$1.1 billion of shares in 2014. Individuals have bought the
equivalent of $111 million this year, according to data compiled
by Bloomberg.
Truengjai, the housewife in Bangkok, is waiting for her
holdings to rally before cashing out.
“The stocks I hold are still much lower than the purchase
cost,” she said. “I am confident that they will rebound
eventually.”
For Related News and Information:
Thai Exchange Plans Curbs on Speculation After Small-Cap Surge
The 40% Stock Returns That Worry Aberdeen, PCCI: Southeast Asia
World equity valuations: WPE <GO>
Emerging-market news: NI EM <GO>
Emerging-market economic statistics: STAT4 <GO>
World equity index rankings: {WEIS <GO>
To contact the reporter on this story:
Anuchit Nguyen in Bangkok at +66-2-654-7308 or
anguyen@bloomberg.net
To contact the editors responsible for this story:
Michael Patterson at +852-2977-4820 or
mpatterson10@bloomberg.net
Phani Varahabhotla
Tuesday, 6 January 2015
Dow Jones Industrial Average Index as at 5 Jan 2015
 |
| DJIA as at 5 Jan 2015 |
The Straits Times Index as at 6 Jan 2015
 |
| STI as at 6 Jan 2015 |
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