Hold 100% Cash, Thailand’s Biggest Brokerage Says

[churchill]

Oct. 22 (Bloomberg) -- Thailand’s biggest brokerage told investors to hold “100 percent cash” as the SET Index may extend its drop, driven by concerns of widening opposition by supporters of deposed Prime Minister Thaksin Shinawatra.

The benchmark index may decline to 617, Kim Eng Securities (Thailand) Pcl wrote in a report today, without specifying the time period. That’s a 14 percent retreat from yesterday’s close of 716.35. The measure fell 1.4 percent to 706.25 at the midday break, set to fall for a third day.

“We maintained our call for 100 percent cash,” the brokerage said. “There have been emerging signs that the SET will decline further. Investors are concerned about the government’s stability.”

continued ..http://www.bloomberg.com/apps/news?pid=20601110&sid=aU_zSnfUqxkg

[samuibeachcomber]

if someone wants the SET to go down further then they've done a good job with this press release telling everyone to hold cash

[BigPanda]

Actually when it is too obvious it goes the other side in the short term. And the long term remains unpredictable. Would be too easy to make money otherwise...

[trogers]

if someone wants the SET to go down further then they've done a good job with this press release telling everyone to hold cash

What prevents such brokerage to go into a fallen market to pick up cheap shares?

[Jamalbinabdullah]

Last week, on the 16th of October, my broker, Seamico, sent around the following 'political' assessment in view of the rumors going around about HRH's poor health. Since then, the market has recovered nicely. What will the future hold? You can believe what you want when it comes to the stock market; there are always opposing views.

The SET Index has dropped more than 7% during the last two days, possibly due to investors’ concerns over HM the King’s health. Sentiment may have also been hurt by concerns over the political future of Thailand and the possible instability that may (or may not) follow. The obvious question now is: how much lower do we go from here? Below, we have outlined past political events that have had adverse effects on sentiment and their impact to the market. These events may perhaps guide us towards the correct answer to the above question.

Event: September 19, 2006 - Military coup that ousted PM Thaksin Shinawatra.

Fear/concern: Civil unrest, political turmoil, blow to tourism industry, general economic deterioration.

Impact to index: -4.7% decline from start of event to low.

Duration of selling: 2 days.

Index performance post event: 1M: +1.0%, 3M: +5.1%.

Event: November 25, 2008 – People’s Alliance for Democracy seize Suvarnabhumi and Don Muang Airports to pressure Constitutional Court to rule against Thaksin nominee parties on election fraud case.

Fear/concern: Civil unrest, political turmoil, blow to tourism industry, general economic deterioration.

Impact to index: -4.5% decline from start of event to low.

Duration of selling: 3 days.

Index performance post event: 1M: +12.3%, 3M: +9.3%

Event: April 11-14, 2009 – Songkran Riots. Military is called in to disperse violent crowds, with two dead and many more injured.

Fear/concern: Civil unrest, political turmoil, blow to tourism industry, general economic deterioration.

Impact to index: 0% decline. The index rallied right away.

Duration of selling: 0 days.

Index performance post event: 1M: +19.2%, 3M: +31.5%

Event: October 14-15, 2009 – Market concerns over HM the King’s health.

Fear/concern: Civil unrest, political turmoil, blow to tourism industry, general economic deterioration.

Impact to index: -10.1% decline from start of event to low.

Duration of selling: 2 days (so far).

[Time Traveller]

Hahaha. Since when did anyone make money following a brokers advice? Kim Eng have the worst record. At the same time as they're telling institutional clients to be 100% cash, they're telling retail clients to be 70% long thai equities.