STOCK MARKET
NUNTAWUN POLKUAMDEE AND DARANA CHUDASRI
Thai shares fell 3.11% to a four-year low yesterday over continued investor jitters about the stability of the global financial system.
The Stock Exchange of Thailand index closed at 605.14 points, down 19.42, in trade worth 15.11 billion baht. Energy stocks led the market, falling 4.91% for the day.
Asian stocks closed mixed yesterday following an early rally after the US Federal Reserve announced it was offering a loan of US$85 billion to bail out the American Insurance Group, the world's largest insurer.
But fears that other financial institutions could post losses on deals tied to bankrupt Wall Street investment bank Lehman Brothers pushed other markets downwards. Hong Kong closed down 3.6%, Shanghai was off 2.9% and Singapore dropped 1.71%, while Tokyo gained 1.21%, South Korea rose 2.7% and Jakarta was up 2%.
SET president Patareeya Benjapolchai said global factors dominated sentiment on the exchange yesterday.
But domestic politics remained on the minds of many investors, as parliament yesterday named Somchai Wongsawat, a brother-in-law of exiled former prime minister Thaksin Shinawatra, as the country's next leader.
"The questions from investors are mostly about the direction Thailand is heading, the state of the financial system and how the country will adjust to the global economy," Mrs Patareeya said.
Montree Sornpaisarn, the chief executive officer at Kim Eng Securities, said uncertainties about the state of other financial institutions was leading market sentiment downwards.
"Investors should just wait and see what happens. We could see other bankruptcies. Right now, we don't know the position of other US financial institutions," he said.
For long-term investors, falling oil prices and inflation and low share prices made the Thai market a relative bargain for the strong-hearted.
But for now, Mr Montree said the global market crisis would raise costs for local companies as foreign investors freeze new investment.
There was unlikely to be any significant change in the political situation with the selection of Mr Somchai, who succeeds Samak Sundaravej.
"[Mr Somchai's] character is softer when compared with Mr Samak. But the private sector wants to see public transparency and good governance, and politicians in particular need to avoid conflicts of interest," said Mr Montree, who is also a leading member of the Thai Businessmen for Democracy Club.James Moss, senior investment analyst at CLSA Securities (Thailand), said global economic factors and domestic political uncertainties were risk factors outweighing Thailand's clean balance sheets and relatively strong fundamentals.
But the good health of Thai listed companies would eventually help draw back foreign investors, he said.
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