Thai Stocks Hit 7 Week High

[Jai Dee]

SE Asia stocks-Thai stocks hit 7-wk high, S'pore flat

Thailand's stocks rose on Friday to hit their highest level in about seven weeks, as brokers said foreign investors were attracted by cheap valuations and hopes of lower interest rates.

Singapore stocks traded higher in early trade, led by the banks after the city-state's central bank cut the amount of funds that lenders need to set aside to back lending, giving them more financial flexibility.

However, gains in the city-state's benchmark index were limited by a 1.2 percent fall in Singapore Telecommunications (SingTel) as its lower-than-expected quarterly profits resulted in target price cuts by brokers.

By the close of morning trade, Singapore's Straits Times Index was virtually unchanged.

United Overseas Bank rose 2 percent, DBS Group climbed 0.9 percent, and Oversea-Chinese Banking Corp gained 0.6 percent.

Indonesian stocks lost 0.88 percent, falling for the third session in a row, while Malaysian shares dropped 0.97 percent, taking a breather after eight consecutive sessions of gains.

The Philippine index rose 1.56 percent, rebounding from a 1.12 percent fall in the previous session.

By 0430 GMT, Thai shares had gained 0.18 percent, after Thursday's jump of 2.36 percent, their biggest single-day rise in about a month on hopes of a cut in key interest rate.

Thailand's top mobile phone firm Advanced Info Service rose 2.5 percent and Kasikornbank gained 1.5 percent.

"We have a sense that foreign investors are getting more positive towards Thailand," said KGI Securities analyst Rakpong Chaisuparakul in Bangkok.

He said foreign investors are attracted by cheap valuations and indications that the Bank of Thailand would cut interest rates further, after last month's cut of 18 basis points in the key one-day repurchase rate.

The Monetary Authority of Singapore, Singapore's central bank and its financial regulator, said late on Thursday that as of March 1, the Tier 1 ratio for banks would be lowered to 6 percent, from 7 percent of risk-weighted assets.

Analysts said the move would allow banks to compete better in international markets and could pave the way for them to return excess capital to shareholders as Singapore banks have historically been overcapitalised.

"The sector has a track record for both paying special dividends and pursuing overseas takeovers and investments. Both are possible going forward," said Brian Hunsaker, analyst at Fox-Pitt, Kelton in a note to investors.

He estimated that DBS could pay a special dividend of S$2.14 a share and still maintain a Tier 1 ratio of 8 percent, while UOB could pay a dividend of S$2.01 as a result.

SingTel fell as much as 2.3 percent to hit S$3.38, its lowest in two weeks, a day after it posted a disappointing 9.6 percent rise in quarterly profit.

DBS Vickers research analyst Sachin Mittal downgraded SingTel's rating to "hold" from "buy", lowered the target price to S$3.60 from S$3.80, and said earnings were hit by higher customer acquisition and retention cost.

CIMB analyst Kelvin Goh also cut his price target for SingTel, to S$3.57 from an earlier target of S$3.88, citing risks of rising costs in Singapore, and higher operational expenses and subscriber acquisition costs from the aggressive rollout of its 3G network in Australia.

Malaysia's fourth-largest bank RHB Capital fell 3.5 percent after its parent Rashid Hussain , target of an increasingly competitive bidding contest, said it was not soliciting rival bids after an exclusive agreement to negotiate with a consortium led by Kuwait Finance House .

Rashid on Thursday released an offer document received from rival suitor EON Capital , Malaysia's seventh-largest bank. Shares in Rashid Hussain rose 0.6 percent while EON Capital fell 2.2 percent.

Losses in Jakarta were led by Indonesia's largest telco, Telekom Indonesia , which fell 2.2 percent, after announcing that it had suffered losses of around 18 billion rupiah ($1.99 million) due to flooding in areas in and around Jakarta.

In Manila, dominant phone firm PLDT rose 3.2 percent after a 2.4 percent fall on Thursday and Manila Electric Co. or Meralco rose 4.9 percent.

Source: Reuters - 9 February 2007

[Gaudente]

the index is testing quote 690, which is the level it bounced back the day after the 19 Dec crack.

It is unbelievable that after all the insults the BOT governor issued to foreign investors, followed by the menaces of the government, there are still farang investing in this country.

We farang must really be without any self respect to lower ourselves in such a way

[tingtong]

stock market investing has nothing to do with self respect.

it is all about greed and fear.