Baht, stock market to remain weak due to political concerns

BANGKOK: -- The baht and the local stock market are expected to remain weak this week due to persisting investor concern over domestic political problems, according to a Kasikorn Research Centre report.

The local currency was predicted to move within the range of 39.20-39.70 per dollar this week as traders monitored the implications of a major anti-government rally held here over the weekend, the report said.

Currency traders were also closely monitoring economic data from the United States which could lead to further US interest rate rises after the Federal Reserve last increased its rate by a quarter of a per cent to 4.50 per cent on January 31.

The baht was traded at 39.387 per dollar last Friday afternoon compared with 38.995 baht a dollar a week ago, the research house said.

The Stock Exchange of Thailand (SET) index closed at 747.09-point on Friday, down 1.86 per cent from a week ago but up 4.67 per cent from the end of 2005.

Total turnover last week tumbled 57.68 per cent from a week ago and stood at 89,520.63 million baht, it said.

Foreign investors remained net buyers of about 6.8 billion baht last week, while institutional and retail investors were net sellers of 2.3 billion and 4.5 billion baht respectively.

The Kasikorn Research Centre said local political problems would continue to depress the bourse this week and with an absence of new factors, investors were expected to take profits and the SET index was projected to move within a narrow range.

The support level was forecast at around 735-737 points and resistance level at 755 points.

--TNA 2006-02-05

I suspect the main stock market shocks will spread as a ripple from the U.S. I note that foreign investors are net buyers of Thai stock and Thais are net sellers. I suspect I know who will be proven the wiser here. As a Britain living in Thailand my admittedly selfish interests would be served by the Thai Baht depreciating against Sterling. High oil prices and a drop off in tourism would be the favourite causes for any depreciation in the Baht