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Baht/$ 34.24/29 (Bid/Ask)
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14050
-400
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DARANA CHUDASRI AND NUNTAWUN POLKUAMDEE
Thai shares rebounded 5.39% yesterday in line with a strong global recovery on renewed government efforts to protect the global financial system.
The Stock Exchange of Thailand index closed at 476.33, up 24.37, in trade worth 16.8 billion baht. Energy stocks gained 6.29%, banks 8.41% and technology stocks 8.62% as the index clawed back a portion of the 23% losses posted last week.
Retail investors were net sellers of 908.9 million baht and foreign investors had a net sell position of 468 million, while local institutions were net buyers of 1.37 billion.
Hong Kong gained 10.2% yesterday, while Sydney gained 5.6% and Singapore rose over 6%. Taipei however fell over 2% and New Zealand lost 0.82%, while Tokyo was closed for a public holiday.
Analysts said sentiment improved following pledges over the weekend by European leaders to prop up their banking systems with deposit guarantees and infusions of fresh capital.
But the gains could be short-lived, as considerable uncertainty remained in the global market.
"The market was poised for a rebound after dropping over 150 points over the past week," said Jitra Amornthum, head of research at Syrus Securities.
The SET index was driven largely by gains in large-cap stocks, with PTT Plc up 12 baht to 182, PTT Exploration and Production gaining 7.5 to 104 and Kasikornbank up 3.5 to 53.5.
But Mrs Jitra said while global central banks were injecting hundreds of billions of dollars into the money markets to break the credit crunch, liquidity remained tight, with interbank rates still high relative to treasury notes.
"The high interbank rate shows that a lack of confidence remains in the global financial system and banking system. Investors may be looking to take profits soon," she said.
Poramet Tongbua, head of research at Tisco Securities, agreed, saying based on past data, a rebound would likely last just two or three days.
"It's hard to say where the bottom is. But even after last week, I don't think we're at the bottom point yet," he said.
In the bond markets, yields fell by two to five basis points as policymakers at the Finance Ministry signalled that policy rates could be cut to boost economic activity.
One-month government yields fell 0.29 points to 3.50138%, while three-year yields were off 1.62 points to 3.72984%.
Ariya Tiranaprakit, an executive vice-president of the Thai Bond Market Association, said domestic politics was taking a back seat to the headlines abroad. Trading volume was normal yesterday at 20 to 30 billion baht.
The baht meanwhile closed at 34.24/29 to the dollar yesterday, up from 34.36/41 on Friday. Dealers said the currency was expected to be rangebound between 34 to 34.5 to the dollar.
Meanwhile, units of the Centara Hotels & Resorts Leasehold Property Fund fell 50 satang below their initial public offering price on its debut on the Stock Exchange of Thailand yesterday.
The property fund opened at 9.95 baht and fell to 9.50 in thin trade worth 1.58 million baht. The 3.2-billion-baht fund, 25% held by Central Plaza Hotel Plc, holds a 30-year lease in the five-star Centara Grand Beach Resort Samui and offers guaranteed returns of 9% per year for the first four years. Kasikorn Asset Management is the manager of the fund.
Suthikiati Chirathivat, the executive chairman of Central Plaza Hotel Plc (Centel), said the company cut its shareholdings in the fund to 25% from an initial target of 33% due to higher-than-expected investor demand.
In any case, Centel planned to eventually raise its holdings in the property fund to a one-third stake, Mr Suthikiati said, adding that the company would raise the fund's size to 10 billion baht within the next two to three years.
Ronnachit Mahattanapreut, the Centel senior vice-president for finance, said the company planned to invest three billion baht next year in its hotel and food businesses. The company plans to open five new hotels next year in Pattaya, Khon Kaen, Samui and the Maldives.
"Occupancy rates in July and August exceeded rates last year, although we saw zero growth in September due to the crisis," he said.
Mr Ronnachit added that Centel was ready to repurchase holdings in its Kata and Karon beach hotels in Phuket from the bankrupt investment bank Lehman Brothers if the opportunity arose. Lehman invested 240 million baht in the two hotels, with Centel holding a 50% stake.
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