Finance Minister denies using taxpayers’ money to support stock market

BANGKOK, March 18 (TNA) – Thai Finance Minister Korn Chatikavanij on Thursday dismissed doubts by the anti-government Red Shirts the government bought shares with taxpayers’ money help stock index rising throughout the week despite protests.

It’s not the government’s policy to use the state budget nor taxpayers’ money to intervene in the stock market, said Mr Korn, adding that the government’s budget spending is required by law to seek approval from the Parliament.

He said the continuous gains in the stock market were partly due to eased investor concerns as red shirted anti-government protest has been mostly peaceful. Moreover, stronger operating results of listed companies, and the improving economy as well as the government’s policy implementation in tackling the economic problems were also attributed to the gains.

Mr Korn’s clarification came after a group of red-clad demonstrators rallied at the Stock Exchange of Thailand (SET) seeking a clear-cut explanation from SET executives over the stock surges.

Meanwhile, Patareeya Benjapolchai,  SET president, issued a statement saying Thailand’s strong economic fundamentals and favourable external factors
helped push the index up over the week.

She explained that Thailand’s gross domestic product expanded 5.8 per cent in the final quarter of last year compared with the same period in 2008, while earnings of Thai listed companies soared 42 per cent in 2009. In addition, recommendations by Morgan Stanley this week to overweight Thai stocks also helped lift the market.

Moreover, the liquidity in the capital markets remains high and the US Federal Reserve signalled that interest rates would remain low for the time being to support economic recovery, so foreign investors look to invest for better returns in emerging markets, particular in Asia, which have stronger economic fundamentals than European countries, said the Thai bourse chief.

Mrs Patareeya said foreign investors were net buyers of Bt32 billion from February 22 to March 17 as they remain confident that the Red shirt rallies
will not significantly weigh down on economic recovery.

The SET index fell 6.52 points on Thursday or 0.85 per cent to close at 759.03, in trade volume of Bt27.523 billion.

Mayuree Chowvikran,  Senior Vice President Research Department KimEng Securities (Thailand)  said the index lost ground fof the first time in seven days thanks to profit taking by investors and in line with downward trend in regional markets and  markets in Europe. (TNA)