FREE FALLING
SEC stings STEC for insider trading
The SET continued its downward slide on fresh fears about the coronavirus and a possible recession.
Thailand’s stock exchange opened the week on a downbeat note as recession fears and rising local coronavirus cases outweighed the US Federal Reserve’s rate cut and quantitative easing measures.
Yesterday, the Stock Exchange of Thailand (SET) plummeted by 82.83 points or -7.3% to close at 1,046.08 points, in turnover worth 68.2 billion baht.
Shares of distressed asset manager Bangkok Commercial Asset Management (BAM) stumbled the most by 13.8%, followed by PTTEP (-12.1%), AOT (-11.5%), BDMS (-9.1%) and GULF (-8.5%).
Last week, the SET nosedived by over 235 points or -17.3% as panic selling and forced sales occurred in concert with the coronavirus pandemic and lower crude prices. The circuit breaker was triggered twice — during intraday trading sessions on Thursday morning and Friday afternoon as the SET index plummeted by more than 10%.
The SET index is expected to experience continuous volatility going forward as the pandemic persists, according to Finansia Syrus Securities (FSS).
“According to the latest data, the number of confirmed cases in Thailand is beginning to surge. This confirms our view that the pandemic is close to entering phase 3,” said FSS.
“Looking ahead, funds look set to continue to stream out of the region due to mounting concerns over the negative impacts of the coronavirus outbreak on the economy.”
Thailand reported a total tally of 147 coronavirus infections yesterday. Of the 147 cases, 108 people are hospitalised, 38 have been cured and one death has been reported.
The Federal Reserve made its second emergency rate cut in less than two weeks, lowering the benchmark borrowing rate to a range of 0-0.25%, where it was during the 2008 global financial crisis, AFP reported.
The US central bank will also launch a massive US$700 billion (around 22 trillion baht) quantitative easing programme to boost the economy.
Komsorn Prakobphol, head of strategy at Tisco Economic Strategy Unit, said investors have not responded to an aggressive monetary stimulus as deflation concerns still weigh heavily.
Fears of deflation also dented gold prices, even though the asset has an interesting long-term outlook if global economic growth starts to recover on the back of imposed fiscal and monetary stimulus measures, said Mr Komsorn.
On top of monetary policy easing, the government is urged to implement more fiscal stimulus measures to help small and medium-sized enterprises and businesses reeling from the economic slowdown, he said.
“But the most urgent issue is controlling the outbreak. China and other countries have imposed a policy to shut down their cities temporarily. For Thailand, a similar policy will have a major impact, but confidence and economic recovery could result if a shutdown can contain the pandemic,” said Mr Komsorn.
INSIDER TRADING
Yesterday, the Securities and Exchange Commission imposed a civil sanction on three individuals for insider trading of SET-listed Sino-Thai Engineering and Construction (STEC).
During January-February 2018, Woraphant Chontong, STEC’s senior executive vice-president of finance and administration, had insider knowledge from his position in the company and assessed that STEC’s 2017 financial earnings would suffer hefty losses as a result of loan loss reserves set in place for major infrastructure projects.
Mr Woraphant then sold his holding of 1.12 million STEC shares to Preeya Wongsongja, his subordinate, on Jan 16, 2018, avoiding the investment losses.
Mr Woraphant also disclosed this information to Sasipas Chontong, his daughter. Ms Sasipas then sold her holding of 91,900 STEC shares on Jan 19.
The three offenders are liable to pay a combined civil fine worth 12.77 million baht. Mr Woraphant, Ms Preeya and Ms Sasipas have also been barred from acting as directors or executives in any securities-issuing company for 26, nine and 12 months, respectively.