Market dives after CDRM graft announcement
The decision by the ruling Council for Democratic Reform under Constitutional Monarchy (CDRM) to investigate 14 graft cases against ousted Cabinet members eroded investor confidence and sent shares into a 1.57-per-cent tailspin yesterday.
Rumours spreading through the stock market and profit-taking after the strong rebound on Thursday were two other factors dampening market sentiment, one analyst said. The Stock exchange of Thailand Index opened yesterday with a mild gain and slumped to the day's trough at 673.85 before rallying to close at 681.71. Turnover was brisk at Bt24.49 billion. Heavy dumping was seen in stocks linked to deposed Prime Minister Thaksin Shinawatra, especially in the banking and construction sectors. Sino-Thai Engineering Plc lost 21.83 per cent to Bt4.26, Italian-Thai Development Plc was off 12.5 per cent at Bt5.25, Ch Karnchang dropped 3.15 per cent to Bt7.30, and Wyncoast Industrial Park Plc slid 26.57 per cent to Bt1.05. M-Link Asia Corp Plc dived 21.54 per cent to Bt1.53 and SC Asset Corp Plc fell 9.25 per cent to Bt7.85. "Investors are spooked by the probes, because they think they'll put several companies under pressure. They prefer disposing of Thai shares, to mitigate risk. I expect that foreign investors will lead the selling spree," said the analyst. The CDRM has given the Auditor-General's Office under Jaruvan Maintaka sole authority to launch probes into the cases. Its findings into the CTX-scanner scandal will be forwarded to the CDRM next week. Some of the other allegations involve the airport rail link, Thai Airways International's flight kitchen at Suvarnabhumi Airport, the Baan Ua Athorn housing projects and donations for fishing communities affected by the tsunami. The analyst said investors who snapped up shares while the stock market sank almost 30 points in the first trading session unloaded them to lock in profit after the market recovered to close only 1.42 per cent lower. "Due to the foreign brokers' research, they have a better insight into Thailand's political issues," said the analyst. The analyst said the stock market could bounce back a little, propelled by the new Cabinet's composition, because all of the candidates to be the next prime minister, as reported by newspapers, were acceptable. "After accumulating some fundamentally strong stocks that are not politically sensitive, many foreign players held off to watch political developments over the weekend," said a Kasikorn Securities analyst.
Oranan Paweewun The Nation
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