Set Index Likely To Recover In 1-2 Weeks

Set index likely to recover in 1-2 weeks

BANGKOK: -- The Stock Exchange of Thailand’s index is expected to recover and become more stable in the next 1-2 weeks following a plunge by more than 21 points in yesterday’s trading due to mounting investor concern on many negative factors engulfing the market, according to a top securities analyst.

Kongkiat Opaswongkarn, President of the Securities Analysts’ Association, attributed the plunge in the SET index to the investor concern on rising oil prices, accounting fraud of Picnic Corporation Plc, and high speculations on some small stocks.

As well, some investors were also forced to cut loss by selling some stocks by brokerage houses and other dumped shares to hold cash to reduce risks

He viewed the continued sale of shares by foreign investors are just a short-term adjustment to their investment portfolios so that they could transfer some cash to invest in the secondary market.

He believed most foreign investors still maintained an overweight investment outlook for the Thai bourse because they remained confident of the country’s economy. However, they had begun to slow investment since they had already invested a lot.

“The investment sentiment in the stock market is expected to improve in the next 1-2 weeks when the dust settles. Now, many negative factors engulfing the market such as forced sale by some brokers and high speculations on some small stocks have begun to ease,” he said.

Dr. Kongkiat conceded brokerage houses had revised downward performances of listed companies, except those in the energy sector, in the second quarter of this year since they experienced higher costs upon rising fuel prices.

However, most companies remained in a position to pay dividend at a higher rate than interest rates offered by commercial banks, he said.

--TNA 2005-07-08