Stock closes day down 3.1% amid rumours
Shin Corp Plc shares yesterday tumbled to new lows before rebounding to close at Bt47.25 as investors sold on rumours that Temasek Holdings' purchase of a 49.6-per-cent stake in the firm may be reversed as a result of ongoing political demonstrations.
Shin's stock plunged 4 per cent to the day's trough of Bt46, a price last seen on January 19, before rebounding slightly to close the day at Bt47.25, or a drop of 3.1 per cent. Stocks related to Shin also came under selling pressure. Subsidiary Advanced Info Service fell 1.5 per cent to Bt95.50; Shin Satellite dropped 1.6 per cent to Bt12.30; iTV dropped 2.78 per cent to Bt10.50, CS Loxinfo slid 1.7 per cent to Bt3.54 per cent; and SC Asset Corp fell 2.4 per cent to Bt16.30. Temasek's tender offer for remaining Shins shares expires on March 9. Amid political tensions, Fitch Ratings warned that the turmoil could hurt Thailand's growth. A broad decline in Asian stock markets also sent most Thai stocks lower. The SET index started the day with a decline. Stocks took a further beating after protesters led by the People's Alliance for Democracy staged a rally in front of the Singaporean Embassy. The protesters called for Temasek to pull out of the deal. The SET Index fell 1.66 per cent to end at 738.36 on a relatively light volume of Bt12.05 billion. Wiwat Techapoonpol, Tisco Securities' head investment strategist, speculated that if Thaksin did not to resign, the market could dive as much as 705 points. If Thaksin were to quit, Wiwat speculated that the index could react with euphoria and drive past 770 points. But for the moment, he said political uncertainty was depressing share prices. "The opposition's boycott and anti-Thaksin protests will cloud sentiment," he said. He recommended that investors pile up on stocks that were not tied to politics. Dynasty Ceramic, Delta Electronics, iTV, Kasikornbank, Nava Nakorn and Vanachai were among the recommendations by Tisco Securities. But Montree Sornpaisarn, chief executive of Kim Eng Securities (Thailand), said the political turbulence would have a short-term psychological impact on stocks. "I believe most investors weigh their decisions on corporate earnings as stock prices were seen as cheap with the average price to equity ratio at just of 9 times," he said. Padermpob Songkroh at Bualuang Securities said uncertainty could further affect the bourse. "By falling below previous resistance levels of 750, the index is giving off a negative signal that may apply further pressure on stocks," he said. Siriporn ChanjindamaneeThe Nation
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