SET Drops, Expected To Plummet

[Jai Dee]

SET drops, expected to plummet

The markets dropped nearly five points in the opening quarter hour of trading this morning as investors reacted to the weekend’s political developments.

The Stock Exchange of Thailand (SET) started the day at 741.80 after a Friday rally, while the Market for Alternative Investment began at 167.59 points.

“I expect to see a further drop for sure, because [the political situation] just postpones everything, like the megaproject spending and other government spending,” Siam City Securities analyst Anchal Pathela said in a phone interview.

Analysts interviewed Sunday were unsure how investors would digest news of the opposition’s threatened boycott of the April 2 poll, arguing there was not enough time to organize a proper election. An ensuing political vacuum, said analysts, could blight any national economic progress.

Anchal said the energy sector may see gains after crude futures on the international market jumped four percent over the weekend due to supply concerns. Thus far, the SET’s energy sector has not responded to price fluctuations.

Buoying the markets today are a number of dividend announcements from small- and medium-sized firms, including Charan Insurance. The company announced a 3.50 baht per share dividend before the market opened and started the day at 47 baht, shooting up one baht at the opening.

Source: ThaiDay - 27 Feb 2006

[Jai Dee]

Economists said Thailand remains an interesting investment hub.

Economists expressed confidence that, Thailand remains an ideal place for investments, adding that if political situation becomes clearer, investment inflows will continue.

Associate Professor Dr. Montri Sokatiyanurak (มนตรี โสคติยานุรักษ์), an expert on finance from NIDA, said that house dissolution is beneficial for the country’s economy. He said that for the past few weeks, the political situation was vague, causing investors to delay their investments. He said that House dissolution provided clearer political direction at some level, adding that it should help improve investment atmosphere during the next two weeks.

Dr. Montri added that foreign investors will consider political atmosphere and domestic investments, as well as future economic direction, in making decisions on transnational investments.

Source: Thai National News Bureau Public Relations Department - 27 Febuary 2006

[baht&sold]

I'm NO expert but the long term future of the SET is well, likely set. Bet the major domestic stake holders in the SET are probably anxious to see a peaceful conclusion to the political unrest SOON.

Probably weighing whether it's better the CEO remain at the helm (to continue to protect their interests) but nervous at what present day "cost" to their interests- VS quietly saying it's time to go -if things continue in a vacuum for too long (again, at what overall "cost" to their interests).

This whole poltical quagmire probably rests more on what the old families and major domestic stakeholders of the SET feel they have to lose or gain, than what any farmers in the NE, taxi drivers, or Academics in Bkk thinks. The SET of the past has been their private board game to manipulate afterall but it's a new game of late, plugged into a worldwide market, new rules.

The LAST thing they want to see is any violence- which would have a knock-on effect to their interests. It's a changed and connected world since 1992Thailand, moreso on the SET. Money runs thicker than...and for "modern day" democracy growing pains in Thailand, that's a good thing, in a perverse way.

[Jai Dee]

SET bounces on banks and oil

In heavy volume, the energy and utilities sector pushed the Stock Exchange of Thailand (SET) higher after the bourse dropped more than five points in the opening half hour of trading.

Analysts attributed the market’s 13 point rebound before the midday break to price volatility in the global oil market and a positive investment cycle in the banking sector. The SET index started the day at 741 points and finished the morning session at 748 points.

“Banks are something that we already like. They are benefitting from the investment cycle and I think it’s probably our top sector for the year and will probably to continue to do well,” Pat Pattaphongse, head of research at KGI Securities, said in a phone interview.

Yesterday, the international rating firm Standard and Poor’s upgraded their outlook on the Asia-Pacific region, which helped Thailand’s banking sector according to analysts.

In the oil markets, crude futures will begin Monday trading on the New York Mercantile Exchange at US$62 a barrel for April delivery. A week ago, crude was trading at around $59, and then shot up after Nigerian militants took oil workers hostage in the country’s southern delta region, prompting Shell to cut output. Supply fears were also caused by an attempted suicide bomb attack on a Saudi oil refinery and concerns Iran’s nuclear ambitions will destabilize the Middle East.

Analysts remained divided over the impact the country’s current political situation will have on market performance.

“I never expected the market to plummet. If you look at Friday, people were already speculating positively on the anticipation of the [Parliament] dissolution,” Pat said.

When asked how investors reacted to the political oppositions’ threat to boycott the April 2 elections, he said, “I think it’s yesterday’s news, and people were a little skittish and worried about that. I think today people are less concerned about that particular issue.”

The question on investors’ minds now is if and how much Thaksin’s Thai Rak Thai party is willing to negotiate with opposition leaders.

Amarej Singnarong, head of research at Adkinson Securities, said Thaksin is “holding all the cards” and can dictate the negotiations.

There were rumors among investors that Thaksin and his allies would drive the market higher today in an attempt to alleviate investor concerns over the political situation. Amarej, along with other analysts, argued it is possible Thaksin’s group could be attempting this, but “is dangerous to say definitively”. Due to market regulations, local analysts are restrained from commenting on investor speculation.

Source: ThaiDay - 27 Feb 2006

[The Coder]

SET drops

The SET dropping a miniscule amount for 15 minutes is a news story? Why then isn't there a news story that right after this 15 minute period the SET raced upwards into positive territory and netted a very strong performanc for the day?

…expected to plummet

The Thai stock market is controlled by a group of less than 20 wealthy individuals. They own so much of it cumulatively that the direction of the market is based on them, not normal market forces. Remember the tsunami? As the story developed and the news got worse, the SET just kept on rising day after day. Forget market forces and average investor sentiment; they are in the back seat.

[Jai Dee]

Finance Minister said the economic forecast figures for 2006 would not need to be adjusted during this period

Finance Minister Thanong Bidaya affirmed that the economic forecast for year 2006 would not need to be adjusted despite the current political uncertainty.

Although the political situation at present is causing uncertainties in all aspects, he believed no revision would be made over this period over the economic forecasts for year 2006, as the political problems were only short-term. As for whether the GDP growth figure would reach the predicted level, Mr. Thanong said he could not answer this either as everything was a matter of the political situation.

As for the matter where some brokers are objecting the liberalization of commission charging as they fear this would force small brokers out of business, the Finance Minister said his ministry will not be intervening with this issue. The decision to liberalize commission charge setting would be up to the Securities and Exchange Commission, the Stock Exchange of Thailand, and the brokers association.

Source: Thai National News Bureau Public Relations Department - 27 Febuary 2006

[sriracha john]

SET drops

The SET dropping a miniscule amount for 15 minutes is a news story? Why then isn't there a news story that right after this 15 minute period the SET raced upwards into positive territory and netted a very strong performanc for the day?

…expected to plummet

The Thai stock market is controlled by a group of less than 20 wealthy individuals. They own so much of it cumulatively that the direction of the market is based on them, not normal market forces. Remember the tsunami? As the story developed and the news got worse, the SET just kept on rising day after day. Forget market forces and average investor sentiment; they are in the back seat.

Finance Minister said the economic forecast figures for 2006 would not need to be adjusted during this period

awwww.... shucks. I was expecting the next news release was to say it had dropped way back down for the afternoon session.......

you're right, Coder.... reporting on relatively and temporary small movements (down OR up) in the SET is ridiculous. It's bouncing all over the place all the time.

[Steely Dan]

SET drops

The SET dropping a miniscule amount for 15 minutes is a news story? Why then isn't there a news story that right after this 15 minute period the SET raced upwards into positive territory and netted a very strong performanc for the day?

…expected to plummet

The Thai stock market is controlled by a group of less than 20 wealthy individuals. They own so much of it cumulatively that the direction of the market is based on them, not normal market forces. Remember the tsunami? As the story developed and the news got worse, the SET just kept on rising day after day. Forget market forces and average investor sentiment; they are in the back seat.

Finance Minister said the economic forecast figures for 2006 would not need to be adjusted

during this period

awwww.... shucks. I was expecting the next news release was to say it had dropped way back down for the afternoon session.......

you're right, Coder.... reporting on relatively and temporary small movements (down OR up) in the SET is ridiculous. It's bouncing all over the place all the time.

I don't trade the Thai stock market, I suspect it suffers from the same liquidity and volatility problems of other emerging markets. Is it rigged? Well received wisdom is that the developed world bourses are too large to manipulate, however in Thailand this is perhaps not the case.

I do agree with the general point that financial 'news' seems to be little more than padding for newspapers as it does not seem to be responsible for price movements in any reliable way. Perhaps the lack of a fall in the market signifies the powers that be calculate that there will be little political change in Thailand and the market prefers the devil it knows to an unknown quantity.

[Jai Dee]

[thedude]

au contraire.

stock market normally runs in the run-up to an election.

good way for the party to raise election funds.

i think it might go up for a bit more before profit taking.

[Thaising]

Those who worked in the financial circus knew the internal trade. Powerful politician and businessmen always make use of stock index as tools to manipulate the market. Stockbrokers always say, What’s right isn’t always popular, and what’s popular isn’t always right.