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| • EXCH RATES |
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Baht/$ 33.64/67
Bid/Ask
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GOLD |
15,200
+ 300
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NUNTAWUN POLKUAMDEE
Thai stocks fell 1.81% yesterday as investors dumped shares due to uncertainties about domestic political risk and the health of the US financial system.
The Stock Exchange of Thailand index closed at 717.06 points, down 13.23, on thin trade worth 10.73 billion baht.
Foreign investors were net sellers of two billion baht, local institutions were net buyers of 1.03 billion and retail investors net buyers of 976.06 million.
Reports that the US government and Federal Reserve were launching a support plan to prop up liquidity for two giant US financial institutions did little to ease market jitters. Fannie Mae and Freddie Mac are both mortgage lenders with a portfolio of around $5 trillion.
Finance Minister Surapong Suebwonglee said the problems with Fannie Mae indicated that the collapse of the sub-prime mortgage market and liquidity squeeze in the credit markets were far from over. This retreat to cash would put pressure on countries like Thailand.
''We need to rely more on our domestic economy and reduce dependence on foreign investment,'' Dr Surapong said.
Political risk remains high as anti-government protesters had turned to the courts to the handle the disputed Preah Vihear temple case, said analysts.
A number of other corruption cases are also expected to force Prime Minister Samak Sundaravej to reshuffle the cabinet or even call for early elections.
Warut Siwasariyanont, an executive director at Globlex Securities, said oil prices were another major downside risk for the market, as crude prices hit $145 per barrel over the weekend.
High energy costs would likely lead some listed companies to miss their financial targets this year, he said.
Mr Warut said reports that the government would move forward to amend the constitution also helped spur selling, as investors viewed the move would increase conflicts within the country.
Apisak Limthamrongkul, head of research at Siam City Securities, said it was all but certain that the central bank's Monetary Policy Committee would raise short-term rates when it meets tomorrow.
''There is just no good news for investment right now. Investors are moving to hold cash,'' he said.
Energy stocks dominated the market yesterday, with PTT Plc closing down 12 to 286 baht, PTT Exploration and Production up one to 166 and Thai Oil losing two baht to 51.5.
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