"According to our survey, 720 is the lowest estimate for this year and 800, the highest," said Sombat Narawutthichai, secretary-general of the Securities Analysts Association. The last time the trade group took a survey, the high was 808 points.

The association sent questionnaires to 37 brokers and 19 responded. Shares have tumbled more than 10 per cent since May 11 largely due mainly to a selling spree by foreign investors.

They have been worried that the US Federal Reserve's will not stop its trend of hiking interest rate hikes, he said.

"The political situation, the worst of which is believed to be over, will be positive and clearer from now on," Sombat said. "We expect foreign investors to come back to the stock market and interest rates have already peaked," he said.

In the association's view, the country's worsening economic indicators will continue threatening the stock market in the short run.

The stock market will begin to recover in the third or fourth quarter in anticipation of political clarity, capital inflows and corporate adjustments to cope with high fuel prices and interest rate hikes, said Sombat.

Investors can now pile up stocks with good fundamentals because Thai shares are quite inexpensive considering their average price-to-equity ratio of 8.4 times, which is close to last year's trough at 8.37 times. Energy, communications and electronic parts stocks remain attractive, he said.

Analysts' consensus lowered the earnings per share (EPS) growth of listed companies from to 2.8 per cent 4.8. The tepid economy and higher manufacturing costs from rising oil price prompted the EPS growth cut, said Sombat.

They also reduced their 2006 economic-growth to 4.3 per cent from 4.9 per cent.

Caretaker Finance Minister Thanong Bidaya told Reuters that the gross domestic production (GDP) would grow 6 per cent in the first quarter of this year but would be marginally above 4.5 per cent for the whole of 2006. His prediction mirrors the central bank's forecast of 4.25-5.25 per cent. "From our estimates, GDP growth at 4.7 per cent is the highest and at 4 per cent, the lowest. [Average] EPS is expected to grow 7 per cent and negative 6.5 per cent at the maximum and minimum range of estimates, respectively," Sombat said.

Respondents also raised the ceiling estimate of the 14-day repurchase rate from 4.8 per cent to 5.3 per cent on average.

Visit Tantisunthorn, the Government Pension Fund's secretary-general, said the sharp fall in the stock market provided an opportunity to scoop up cheap shares with strong fundamentals.

Siriporn Chanjindamanee

The Nation