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Thai stocks edge up on profit-taking by local players

Thai stocks edge up on profit-taking by local players

Thailand's key stock market index ended slightly higher Monday on bargain hunting in blue chip banks, although most foreign investors stayed away awaiting further action by the government.
The Stock Exchange of Thailand's benchmark SET index rose 0.6 percent, or 4.01 points, to close at 684.32.
Since hitting a nine-year low of 35.09 baht last Monday, the U.S. dollar has strengthened, closing Monday at 36.43 baht, little changed from its Friday close of 36.44.
Thai shares plunged nearly 15 percent last Tuesday after the central bank announced regulations restricting foreign capital inflows in an effort to curb the baht's appreciation.
Authorities quickly lifted the controls on foreign stock investments but retained the curbs on bonds and other debt instruments, prompting the benchmark index to bounce back 11 percent Wednesday.
The market recovered most of its losses since then and has been relatively stable in recent days.
"Market sentiment remains gloomy with retail players mostly dominating the market, due mainly to concerns over the central bank's reserve requirement rules on capital inflows, which will hinder foreign investors from coming back to the Thai market in the near term," Anothai Chiengtawan, an analyst at IV Global Securities, said Monday.
Analysts said it may take a few months before foreign players regain confidence and readjust their portfolios in Thailand. "Many have taken a wait-and-see approach for now after heavy selling last week," said analyst Ratchanok Dandamrongrak at Finansa Securities.
On Friday, the central bank began to implement special accounts that will allow foreign investors to bring in unlimited new funds not subject to the earlier 30 percent withholding requirement.
Bank of Thailand Gov. Tarisa Watanagse also said Friday that for the time being there would be no more measures to stem inflows and that there was no target for the baht exchange rate.
Despite the most recent moves, analysts say the market is likely to head lower to test the next support at 670.
"Many are waiting to see when the rest of the measures will be lifted, how volatile the baht will be and what it means in terms of policy direction," said Amarit Sukgavanij, head of research at Kasikorn Securities.
Analysts see no signs of new net inflows but also don't foresee a repeat of the 1997 Asian financial crisis which began in Thailand, noting that unlike a decade ago the Thai and regional economies are in much healthier shape.