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Baht/$ 33.68/71
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14,900
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STOCK MARKET
DARANA CHUDASRI
Investors buoyed by last week's late rally should remain cautious, as economic and political factors are expected to continue to press on sentiment until the fourth quarter, according to analysts.
The Stock Exchange of Thailand index ended Friday up 1.17%, a slight respite after four weeks of steady declines.
Since its high in May, the index has fallen more than 150 points and is down by nearly 16% for the year to date.
Nattharin Talthong, an executive director at Kasikorn Securities, warned that Friday's bounce was hardly a sign of a long-term rally.
''We shouldn't see a genuine rebound until the fourth quarter. But we are likely near the bottom, and prices should be moving sideways for now,'' she said.
Mrs Nattharin said a fourth-quarter rally was forecast based on expectations that overseas markets would reach their bottom in the third quarter.
Domestic politics remain a near-term concern, with a major cabinet reshuffle expected soon.
Mrs Nattharin said third-quarter earnings were projected to be worse than in the second quarter, owing to pressure on profit margins from rising costs.
Local bankers agree that a second-half slowdown is likely.
Deja Tulananda, a senior executive vice-president at Bangkok Bank, said politics was having a clear impact on consumption and the economy.
Hotel occupancy in Bangkok is under 30%, compared with more than 40% in normal low-season conditions, he said, an indication that tourists were staying away. Investment is also slowing as companies took a wait-and-see approach.
Mr Deja said the government should push forward with megaprojects to sustain job creation, improve market liquidity and spur the construction sector.
Kasikornbank president Prasarn Trairatvorakul said credit quality remained stable, but banks needed to remain cautious to avoid a buildup in bad loans.
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