Thai share prices closed 0.34 percent lower on Monday amid fears of a recession in the global economy caused by the subprime mortgage crisis in the United States, dealers said. They said although the Thai market moved in line with other regional markets like Japan and Hong Kong, sentiment was positive following the government's decision to lift currency controls.
The Stock Exchange of Thailand (SET) composite index fell 2.84 points to 842.92 and the blue chip SET-50 lost 3.64 points to 610.73. Losers outnumbered gainers 187 to 149, with 112 stocks unchanged on turnover of 4.52 billion shares worth 29.66 billion baht (927.12 million dollars).
The Thai baht closed at a new 10-year high of 31.60-61 against the dollar, up from Friday's 31.96-98. Against the euro, the Thai unit was quoted at 47.91-97 from 48.60-70.
"The Thai market had progressive momentum, although it fell at the close, in line with other regional markets. The market fell less compared to other markets today because of the positive psychological effect from the Thai central bank's lifting of currency controls," said Pichai Lertsupongkit, senior vice president at Thanachart Securities.
Pichai said the lifting of currency controls did not directly affect the market but it sent a positive signal that Thailand was welcoming foreign investors. The Bank of Thailand announced on Friday that it would lift the restrictions imposed in December 2006 to curb the baht's rise against the dollar, effective from Monday.
The capital controls required 30 percent of all incoming investments to be held by financial institutions for up to one year. But the controls spooked foreign investors, who saw the regulations as a steep tax on equity investments, and caused the biggest one-day drop in the Thai stock market in late 2006, involving losses worth 23 billion dollars. Many exemptions were later made to the currency rules, but the general 30-percent requirement had remained in place until now.
Thailand's biggest energy firm PTT fell 6.00 baht to 336.00 and its subsidiary PTT Exploration and Production lost 3.00 to 158.00. Thailand's largest lender Bangkok Bank added 1.00 to 131.00, while the kingdom's biggest mobile phone operator, Advanced Info Service, fell 1.00 at 104.00. Shares in Thai Airways International also fell 0.75 to 31.50.
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