Southeast Asian stocks hit multi-week lows

Southeast Asian stock markets hit multi-week lows on Monday as the weak outlook for the global economy dented sentiment and foreigners continued to sell in Thailand ahead of its general election next month. Caution about the corporate earnings outlook grew as investors assessed the impact of a global slowdown. Trading was generally subdued, with turnover in Thailand falling to 0.6 times its 30-day average, the weakest in the region.
The twin threat from the global slowdown and domestic political uncertainty lopped 0.5 percent off the benchmark Thai index on Monday, after a 3.5 percent drop last week, when it was Southeast Asia's worst performer. Fund flows to the Thai stock market have turned highly negative in recent weeks. It has suffered $700 million in outflows so far this month, adding to the $551 million that left in May, a turnaround from the $980 million in inflows in April, according to stock exchange data.
Political risk will continue to hang over the market ahead of the July 3 poll and will probably persist for some time after, especially while the new government is being formed. "Market reaction ahead of the general election has been quite negative. The SET index could lose further, perhaps to 980, which should be a major bottom reflecting political risk," said Viwat Techapoonphol, strategist at broker Tisco Securities.
The index ended at 1,015.53 on Monday and touched a low of 1,007.04. Stocks in Indonesia and the Philippines lost more than 1 percent while Singapore, Malaysia and Vietnam posted smaller losses. Singapore fell to its lowest in 11 weeks, with Indonesia at eight-week lows and the Philippines at nine-week lows. Concern over a sputtering US economic recovery, slowing growth in China and India and festering problems in the euro zone pushed the MSCI index of Asia Pacific shares outside Japan down nearly 1 percent to a 2-1/2-month low. It regained some ground and was 0.4 percent lower by 0929 GMT.
Southeast Asian stocks fared worse than broader Asia, with the MSCI index for Southeast Asia down 1.09 percent at 0929 GMT. Regional big-caps were among the most actively traded stocks by turnover on the day. Malaysia's top lender, Maybank, lost 0.7 percent while Indonesia's main vehicle distributor and biggest listed firm, Astra International, dropped 1.8 percent.
Thailand's biggest energy firm, PTT, fell 0.9 percent and the Philippines' second-biggest lender by assets, Metropolitan Bank & Trust Co, eased 0.9 percent. In Singapore, property stocks with significant exposure to the Chinese market were hammered after China released data late on Friday showing a smaller-than-expected trade surplus in May because of soaring imports and weaker growth in global demand.
CapitaLand, Singapore's largest property developer, retreated 1.7 percent, Keppel Land dipped 4.2 percent and Yanlord Land Group was 2.3 percent lower. Sentiment for Singapore-listed property stocks has also been hit by the Singapore government's statement last week that it would release more land for private housing in the second half of this year.