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NUNTAWUN POLKUAMDEE
The Thai stock market is poised to rebound to 700 to 730 points this month, but could drop to as low as 580 afterward as political risk factors peak, according to Tisco Securities. The SET index yesterday rose 1.38% to 676.35 as most regional markets closed higher following sharp gains on Wall Street and lower global oil prices.
But Viwat Techapoonpol, head of the private client group and technical analysis at Tisco, said political uncertainties would likely peak in October, when the court is set to rule on whether former prime minister Thaksin Shinawatra violated the law regarding the Ratchadaphisek land sale.
Mr Thaksin's wife, Khunying Potjaman, won a central bank auction for a 33-rai plot on Ratchadaphisek Road in late 2003. The court case involves whether Mr Thaksin violated conflict-of-interest rules in participating in the sale.
The potential for political upheaval or violence between government supporters and the anti-government People's Alliance for Democracy would weigh heavily on market sentiment over the next few months, Mr Viwat said.
The SET index could fall to 580 to 600 from September to November, he said.
''Personally, I think Mr Thaksin will continue to fight any way he can for his 60 to 70 billion baht in funds frozen with local banks,'' Mr Viwat said. ''No one knows what will happen. The political risk and uncertainties are quite high.''
The Assets Scrutiny Committee, set up after the September 2006 coup to investigate the Thaksin government, ordered Mr Thaksin's bank accounts frozen over alleged irregularities regarding his sale of his holdings in Shin Corp to Temasek Holdings in early 2006.
Mr Viwat said that globally, equities markets were beginning to rebound from sharp losses in the first half as the US mortgage loan crisis has eased and oil prices have begun to fall.
But the Thai market has been slower to recover, and is off 22% since January. Foreign investors have been net sellers of 89.35 billion baht for the year to date.
''Over the past five years, average investment cost for foreign investors has been at when the index was 580 to 600 points,'' Mr Viwat said.
Tisco recommended that for the short term, investors focus on banks such as KBANK, BBL and SCB. Other recommended stocks were Thai Oil (TOP), Siam Cement (SCC), BEC World (BEC) and Land & Houses (LH).
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