Thai share prices closed 2.63 percent higher on Tuesday, breaking the 800-point barrier to reach their highest level since the 1997 financial crisis, as bullish sentiment spread across the region, dealers said.
They said local volumes were huge on increased confidence for Thailand's political and economic outlook, sending stocks to the highest level since July 2, 1997, when the Bank of Thailand floated the baht and sparked a regional meltdown.
The Stock Exchange of Thailand (SET) composite index jumped 20.81 points to 813.52, while the blue chip SET 50 index gained 17.95 to 580.94. Gainers far led losers 244 to 123 with 112 stocks unchanged on turnover of 6.5 billion shares worth 46.9 billion baht (1.36 billion dollars).
Inflows to the market helped push the Thai baht to a 10-year high, closing at 34.31-33 baht to the dollar from Monday's 34.45-48, while other regional currencies also appreciated against the greenback. Against the euro, the Thai unit finished at 46.65-76 from 46.70-90. Analysts said foreign inflows boosted trading as listed companies prepared to announce their second quarter earnings later this month.
"At the same time, investors expect projected gross domestic product for 2007 could be revised up after sound economic figures were released," said Wiriya Lappromrattana, head of research at Kiatnakin Securities.
Thailand's commerce ministry reported Monday that inflation held steady at 1.9 percent in June, in line with its whole-year projection of 1.5 to 2.5 percent. The Bank of Thailand said last week Thailand returned to a trade surplus last month when exports jumped by 19.9 percent to 12.83 billion dollars.
Investors were also more optimistic about Thailand's political fortunes, as work wraps up this week on a new constitution that is supposed to pave the way for the first general elections since last year's coup. "On politics, investors are convinced that the election will be held by the end of the year," Wiriya said.
Charl Kengchon, a senior economist and deputy managing director of Kasikorn Research Centre, said the index and trading volume clearly showed rising confidence of foreign investors in Thailand, where stock prices were still undervalued.
Energy stocks, the largest sector of the Thai market, rose 2.0 percent Tuesday, while the banking sector gained 5.0 percent. Thailand's top energy firm PTT jumped 6.00 baht to 284.00 baht, and its unit PTT Exploration and Production rose 5.00 to 115.00.
The kingdom's top lender Bangkok Bank soared 6.00 to 126.00, and the third largest lender Kasikorn Bank added 5.50 to 82.00. Thai Airways International edged up 0.25 to 44.25. The country's largest mobile phone operator Advanced Info Serice gained 1.50 to 89.00.
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