SET hit slightly by Constitutional Court's ruling on charter amendment

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SET hit slightly by Constitutional Court's ruling on charter amendment
VARIN TRINO,
CHAIRAT SRISUK
THE NATION

BANGKOK: -- YESTERDAY'S RULING by the Constitutional Court on an amendment bill had a slight impact on the Stock Exchange of Thailand, securities experts said.

The court found that the bill on senators' qualifications and Senate elections violated Article 68 of the charter, but it dismissed a petition for dissolution of the six parties in the ruling coalition.

Paiboon Nalinthrangkurn, chairman of the Federation of Thai Capital Market Organisations (Fetco), said the impact on the stock market could have been greater if the verdict had called for the parties' dissolution.

However, what both pro- and anti-government protesters do next still needs to be monitored, said Paiboon, who is also chief executive officer of Tisco Securities.

The SET Index remains volatile on concerns over domestic political developments, he said.

However, he expects the situation to resolve itself satisfactorily, while listed companies are expected to see improved earnings if the global economic recovers as hoped in 2014.

He conceded that the domestic political problem had affected movement of foreign capital, as investors wait to see what happens in Thailand. Meanwhile foreign capital has started flowing back to other emerging stock markets.

The Constitutional Court is also to consider the government's planned Bt2-trillion transport-infrastructure project, and if its implementation is delayed, that could affect construction companies, commercial banks and other financial institutions.

However, Paiboon believes that the government could find other ways to fund the mega-project if the court shoots down its borrowing bill.

"The Thai stock market has dropped sharply, more than other emerging markets in Asia. Foreign capital has not returned yet. However, if Thailand can find a solution to the political situation, we believe everything will be better after the global economy stages a clearer recovery," Paiboon said.

The SET Index yesterday fell 7.63 points to close at 1,404.81 with trading turnover of Bt41.7 billion.

Krirk Vanikkul, the Bank of Thailand's deputy governor for financial-institution stability, said: "The current political climate might give a feeling of no spending and no credit requests.

There remain several factors affecting such issues. It [the political impact] cannot be assessed now."

Since last year, credit growth has declined consistently from 15 per cent to the current 11 per cent, he said, noting a decline in growth was clearly seen.

He noted that credit growth was clearly declining. However, the central bank sees no difficulties for consumption loans, he said. Total non-performing loans amount to about Bt260 billion, while outstanding consumption loans with more than one month amount to Bt269 billion.

There is no concern if the economy continues growing and people have money for debt repayment, Krirk said.

While others saw the country’s consumption loan’s slowdown, the BOT witnessed a normalisation of such loan, which had previous acceleration, he said.

On a separate issue, the BOT's request that commercial banks switch from magnetic-stripe ATM cards to the more secure microchip type, he said the central bank was hoping for their cooperation and that mandating the change would not be necessary.

While the change would benefit the banks in the long run, it could take some time to convert the country's 30,000-40,000 automated teller machines.


-- The Nation 2013-11-21