Philippine to Thai Exchanges Try to Calm Investors on Stock Rout

June 6, 2013 Leave a comment

Philippine to Thai Exchanges Try to Calm Investors on Stock Rout

Stock exchanges in the Philippines and Thailand have moved to soothe investors as the prospect of the U.S. Federal Reserve scaling back bond purchases prompted selloffs by overseas investors.

The Stock Exchange of Thailand President Charamporn Jotikasthira today urged investors not to panic, saying economic and corporate earnings growth in Southeast Asia’s second-biggest economy remains strong. Philippine Stock Exchange President Hans Sicat described the selloff as an “extreme overreaction.”

The Philippines benchmark index has slumped 11 percent and the Thai gauge 8.4 percent since May 22, when Fed Chairman Ben S. Bernanke said policy makers could consider reducing the pace of monetary stimulus if the nation’s labor market improves. Overseas investors have sold a net $414.4 million of Thai stocks and $147 million of Philippine shares this month.“Foreign net selling is an extreme overreaction to Bernanke’s” outlook on possible stimulus cuts, Sicat said in a televised interview with ABS-CBN News today. “Technical corrections tend to be buying opportunities for others who are more conservative.”

The Thai exchange isn’t planning any measures to contain the slump in share prices, Charamporn said.

“Trading is still normal,” he said at a press briefing in Bangkok today. “Investors should not panic. Thailand’s economic fundamentals and corporate earnings remain strong.”

Thailand’s SET Index plunged 1.8 percent to 1,495.04 at 11:43 a.m. in Bangkok, heading for the lowest close since April 10. The gauge’s 50-day volatility measure rose to 20.4 today, the highest level since December 2011.

The Philippine Stock Exchange Index gained 0.3 percent, after tumbling 2.5 percent earlier. It’s 50-day volatility measure rose to 21.3, the highest level since July.

To contact the reporter on this story: Ian Sayson in Manila at isayson@bloomberg.net

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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