STOCK MARKET
SET gives ground on profit taking following bullish run
- By: NUNTAWUN POLKUAMDEE
- Published: 7/01/2009 at 12:00 AM
- Newspaper section: Business
Thai stocks fell 1.16% yesterday as an early rally faded on domestic political concerns and profit-taking following Monday's strong gains.
The Stock Exchange of Thailand index closed at 473.15 points, down 5.54, in trade worth 21.34 billion baht. The index rose as high as 488.12 in early trade before fading in the afternoon session.
Energy stocks led trade, falling 2.25% on the day, while banks rose 1.02% and property dropped 1.38%. Foreign investors, who were net buyers of 1.3 billion baht in Monday's 6.39% rally, continued to buy, with a net buy position of 1.33 billion as local institutions were net sellers of 392 million and local investors net sellers of 939.4 million.
Kasem Prunratanamala, head of research at CIMB-GK Securities, said global market sentiment remained mostly positive. But the index could see sharp profit-taking at the 480-point level, while volatility is expected to remain high in line with domestic political trends.
"Anti-government forces and the [opposition] Puea Thai Party will continue to badger the new government, which also faces challenges in reviving the economy," Mr Kasem said.
A major challenge for new Prime Minister Abhisit Vejjajiva will be in pushing forward with economic stimulus measures as quickly as possible.
"The government has only just started working, and we are still in a honeymoon period. There hasn't been any conflict yet among the coalition parties, but after two or three months, one will have to watch the situation closely," he said.
If the Democrat-led coalition is successful in pushing forward with public spending programmes and rebuilding market confidence, it would bode well for its own stability in government.
On the other hand, delayed spending and a sharper-than-expected decline in the economy could open the door for Puea Thai to attract defectors and force a change in government.
"Thailand has two risk factors, one political and the second economic. I think the market rebound will end shortly, and as for the global economy, we may not see a recovery in the second half but more likely sometime in 2010," Mr Kasem said, adding the index would likely peak at 480 to 500 points but could then bottom to 400 within the first quarter.
Charoen Impatanatham, a deputy managing director at KTB Securities, said the SET index gained in the morning session with higher global crude oil prices.
But profit-taking later curbed gains and pushed the index into negative territory in the afternoon.
"Investors are waiting to see what other new measures will come to stimulate the economy, as well as 2008 earnings reports," Mr Charoen said.
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