Stocks stage welcome 3% rally

SET REBOUNDS: Stocks stage welcome 3% rally
Published on December 07, 2005

Improved economic figures, easing of political tensions send punters rushing back to trading floors. The stock market rallied almost 3 per cent yesterday, as investors were optimistic about greater political stability following the prime minister’s decision to drop charges against a media tycoon. Better-than-expected third-quarter economic growth also buoyed market optimism, analysts said.

The SET composite index started the day with a sharp jump to 662.04 points, compared with 659.91 last Friday, and headed further north to end at the day’s peak of 679.16. Turnover was moderate at Bt18.86 billion.

Blue-chip stocks yesterday were at the centre of the rally and higher oil prices boosted energy shares. Thai Oil Plc was up 5.89 per cent at Bt63, PTT Plc 4.72 per cent at Bt222, PTT Exploration and Production Plc 4.55 per cent at Bt460, and Bangkok Bank 2.54 per cent at Bt101.

US crude oil was at US$59.69 (Bt2,469) a barrel, having briefly hit $60.80 in New York on Monday, its highest level since November 4.

Thai shares had plummeted 7 per cent since early November before the Administrative Court froze Egat Plc’s initial public offering and political tensions mounted between Prime Minister Thaksin Shinawatra and Manager Daily media mogul Sondhi Limthongkul.

The market remained sluggish as many expected a political showdown, with Sondhi urging 500,000 Thai people to gather at Lumpini Park this Friday to challenge Thaksin.

However, fears were eased following His Majesty the King’s speech on the eve of his birthday, when he urged all parties to harmonise for the benefit of the entire nation.

“The prime minister has dropped his lawsuit against Sondhi. This means Sondhi’s next forum on December 9 will pose no serious effect. We think that negative factors related to politics are over,” said UOB Kay Hian Securities (Thailand)’s head of research, Kosin Sripaiboon.

Thaksin’s lawyer Thana Benjathikul yesterday dropped all suits filed against Sondhi, ostensibly following the advice of HM the King’s address, which opposed using lawsuits to silence critics.

Kosin said he was optimistic that stock market sentiment would improve as concerns over political instability wane.

“Foreign investors will start to return to the Thai bourse after political pressure is eliminated, and because the SET has fallen significantly,” he said.

The National Economic and Social Development Board’s announcement that economic growth in the third quarter was strong at 5.3 per cent was another factor driving the exchange, said Kiatnakin Securities assistant vice president Wiriya Lappromrattana.

Third-quarter growth in gross domestic product reported by the think-tank was well above economists’ projections, which were below 5 per cent. The stronger economic growth was boosted by robust exports and increased agricultural production.

However, Asia Plus Securities chief executive officer and Securities Analysts’ Association president Kongkiat Opaswongkarn warned that foreign investors’ interest in the stock market would be reduced next year due to negative factors lying ahead.

He said that these included expected lower corporate earnings growth, the absence of new large-sized market cap stocks and the high ratio of retail investors.

Corporate earnings will grow only by 5 per cent this year and below 5 per cent next year – the lowest level among Asia’s bourses with the exception of Hong Kong, he predicted.

Oranan Paweewun

The Nation

Create Date : 07 ธันวาคม 2548 Last Update : 7 ธันวาคม 2548 9:45:32 น. Counter : 849 Pageviews.		0 comments
Share Tweet