Something odd happened on Monday, 26th September @ 2.35pm, 5 minutes after the market reopened, the SET was trading down ~-9.5% for the day, with the circuit break (where if the market is -10% the Stock Exchange of Thailand will halt trading for 30 minutes) just a few sell orders away the market stopped trading….

Several calls to brokers were made to discover whether it was the circuit breaker? No, it couldn’t be the market hadn’t hit the 10% limit, and yet no one had an answer.

We had two viewpoints looking at this, if the market had hit a circuit breaker we were ready to unload many more positions as psychologically to investors here in Thailand (as we’ve seen in the past) the market could easily drop another 10-20% post-circuit breaker event.

But if the market had rallied we were considering to buy several positions, thus @ 2.42pm, the market re-opened and was within a second was only down ~8.5% and then continued a strongly rally to finish the day down ~5.6%. So what happened?

The head of the SET came out today saying (note: this is a translation) “Nothing is 100% perfect, accidents can happen, especially in IT…” http://www.manager.co.th/StockMarket/ViewNews.aspx?NewsID=9540000122917

Slightly disconcerting that the head of the SET would make such a casual comment, alas, the market was halted for 6 minutes, all brokers told their clients in the morning not to buy in the afternoon as it would hit the 10% limit, but post-halt the market bounces up and stays extremely strong the rest of the day.

Several humorous conspiracy theories/rumours have come out about it today:

1.) The government told the SET to stop the market and they told government funds to support the market

2.) Large retail investors (fyi retail investors account for ~60% of total daily volume) wanted to accumulate shares.

3.) Aliens came to invest in Thailand….

Interestingly enough PTT, the largest co on the mkt representing 10% of total market cap, opened up 2% whilst all other large caps were down/flat or up slightly.

So what happened? I don’t know to be perfectly honest but we saw the following:

1. There was substantial buying volume in the market

2. A lot of our favourite large caps were trading very cheaply, and while we love small& mid caps, we had to take advantage of the market situation.

3. Europe was positive and dow futures were trending upwards along with news that Europe would finally release their version of the US TARP.

So we entered, took our positions (as previously mentioned, IVL, LPN, PTTCH) and decreased our cash holdings slightly.

But what if aliens did come to Thailand…..