Investors Warned To Invest Cautiously In Bangkok Stock Market

[george]

Investors warned to invest cautiously in Bangkok stock market

BANGKOK: -- Investment sentiment in the Stock Exchange of Thailand (SET) remains volatile although the composite index continued rallying by more than 50 points in the past few days, according to a top securities executive.

Mondtri Sornpaisarn, president and chief executive officer of Kim-Eng Securities (Thailand) Plc, said the Thai stock market had rallied on par with global stock markets in response to news reports that the US Federal Reserve and European central banks had jointly reduced policy interest rates and joined together to address the financial crisis.

However, the market sentiment remains volatile because there remains both positive and negative news, and repercussions from the global economic crisis.

Investors still kept watch on whether financial institutions would reveal additional problem debts they incurred which had not yet come to light.

At present, the debt-to-equity ratio of financial institutions is 30 times, which is considered very high.

Virathai Santipraphob, executive vice president of Siam Commercial Bank Plc, projected the Thai economy would grow 3.5-4 per cent next year.

Should the economy expand less than that, it would be of concern because commercial banks might be reluctant to lend to small- and medium-size enterprises (SMEs) and turn to extend more loans to large companies.

He viewed the government should accelerate implementing measures to stimulate the economy in the short run and seek offshore loans to support budgeting for 2009.

-- TNA 2008-11-05

[Martin]

It is, of course, time to get back to investing as opposed to speculating.

An investment is the purchase of a share of the profits, which come in over theyears.

A speculation is the hope that the purchase can soon be sold on for a higher price; and that, when allied to borrowing the money to make the purchase, is the root cause of the present mayhem in financial matters.

However, it is now difficult to foresee which companies may have good future profits. So expect that there will be a reluctance to purchase shares in those future profits.

There's a lot of 'clearing of the fog' required yet.

But, to pay the 'baby boomers' much of their pensions, shares will have to be sold for whatsoever investors are prepared to bid for them. That 'forced' selling is not going to help to keep share prices up at all.