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Baht/$ 33.57/60 (Bid/Ask)
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Funds on buying spree of blue-chips
NUNTAWUN POLKUAMDEE
Siripong: Prices at very attractive levels |
Thai shares gained 4.29% on the back of heavy retail buying in energy and bank blue-chips even as most Asian markets closed mixed yesterday.
The Stock Exchange of Thailand index closed at 705.35, up 29 points, in heavy turnover worth 27.15 billion baht. Energy stocks gained 7.26% on the day, while banks rose 3.94% and property 3.22%.
Foreign investors had a net sell position of 834.35 million baht, while retail investors were net sellers of 1.2 billion and local institutions net buyers of 2.05 billion.
Across the region, the Singapore exchange fell nearly 2% and Seoul almost 1%, while Hong Kong, Australia and China closed up.
Local analysts cautioned, however, that the SET rebound could be short-lived, as political risk for the Thai market remained high pending several key court judgements due over the next several months that could rock the stability of the current government.
Recent declines in global oil prices resulted in a shift in funds to equities and bonds, according to Siripong Sutharoj, the chief executive officer of Sicco Securities.''It seems that trading on the oil and commodities market have neared their end for this round, and investors are turning back to the equities and bond markets. But we don't really know how long this will be sustained,'' he said.
Oil futures on the New York Mercantile Exchange yesterday traded near $120 per barrel, compared with a record $147.27 reached on July 11.
The global sell-off in equities over the past several months has had a huge impact on emerging markets, Mr Siripong said, with the Thai market down over 200 points in just two months.
The SET index, down 21% since the beginning of the year, has still fared better than markets such as China and Vietnam.
Mr Siripong said many top Thai companies were trading at very attractive prices, some as low as 40% to 50% of their fair value.
Susheel Narula, managing director for research at Kasikorn Securities, agreed political uncertainties remained high. ''Politics is one of the greatest concerns for the market and also the most difficult to predict,'' he said.
Any moves by the government to amend the constitution could lead to violent protests from anti-government protesters who argue such moves are aimed at whitewashing alleged corruption by the former Thaksin Shinawatra government.
Mr Susheel said a dissolution of Parliament was a possibility under the current deadlock.
''It's difficult to say what the direction of the market over the next month will be. For sure, we should see something break on the political scene within the next one to two months,'' he said.
For now, Mr Susheel said that banks, telecom, media and services would be the main beneficiaries if foreign investors returned to the Thai market.
He added that the risk of a US financial crisis could rise in the fourth quarter, and would continue through 2009.
Sathit Wannasilpin, managing director for research at Siam City Securities, said inflation and investor confidence also remained ongoing problems for local policymakers.
Any change in government would only lead to further delays in investment by the private sector, he said.
Energy stocks dominated trade yesterday, with benchmark PTT Plc gaining 24 baht to 264, PTT Exploration and Production up 11 to 156 baht and Thai Oil rising four baht to 54. Kasikornbank gained three baht to 74.5 baht, while Banpu rose 10 baht to 382.
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