Thai stocks hit another 18-year peak as domestic funds buy

BANGKOK Tue Feb 19, 2013 4:47am EST

BANGKOK Feb 19 (Reuters) - Thailand's benchmark stock index hit an 18-year peak on Tuesday, outperforming most other Southeast Asian bourses, as domestic institutions bought large cap stocks, but volume was light as investors were cautious ahead of a central bank rate review.

As of 0933 GMT, Bangkok's SET index was up 0.5 percent at 1,531.14, climbing one point to 1531.39, the highest intraday level since November 1994.

Buying orders from so-called trigger funds lifted index heavyweights such as PTT Pcl and Advanced Info Service Pcl. Such fund buying would continue to support the market in the near term, traders said.

Over the past three sessions, domestic institutions have been net buyers of shares worth a combined $80.29 million, countering net selling by foreign investors of $70.26 million during the period, according to Thomson Reuters data.

The baht, pushed up by strong foreign inflows earlier in the year, held in the range of 29.83 to 29.92 per dollar on Tuesday versus an 18-month high of 29.60 on Feb. 4.

"Market activity was a bit weaker today. I think investors want to wait for the interest rate decision tomorrow," said senior strategist Teerada Charnyingyong at broker Phillip Securities.

About 10 million shares have changed hands so far in the day, just under half the daily average in the past 30 sessions. That compares with 2.8 times the average for Jakarta and 1.3 times for the Philippines.

Thai SET index has racked up a gain of 9.9 percent this year, Asia's fourth-best performance, trailing Vietnam's 19.6 percent, the Philippines' 14 percent and Tokyo's broad Topix index's 12.1 percent.

Thirteen out of 17 economists expected the monetary policy committee of the Bank of Thailand to leave the one-day repurchase rate at 2.75 percent on Feb. 20.

Thailand's better-than-expected fourth-quarter GDP growth reported on Monday undermined the government's case for lower interest rates. It wants a cut as a way of discouraging capital inflows and taking upward pressure off the baht, which could hurt exports.

Broker Maybank Kim Eng Securities expects the market to be supported in the short term by banking sector dividends and buying from domestic trigger funds. The SET index could rise to test the 1,535-1,540 level in coming months, it said. (Editing by Alan Raybould and G.Ram Mohan)