Institutional investors have been piling up stocks on the two Thai bourses, looking forward to receiving satisfactory capital gains over at least the next two years.

Asia Plus Securities CEO Kongkiat Opaswongkarn said investors were putting money into Thai stocks and ignoring whether or not the economy would get back on track this year, as long as a general election does take place in December.

Kongkiat, also chairman of the Federation of Thai Capital Market Organisations, said institutional investors right now were aiming at high-dividend-yielding securities and collecting good fundamental stocks. They mean to obtain strong growth from these stocks when the Thai bourse recovers sometime in the next few years. Stock Exchange of Thailand (SET) data show that from April 17 to May 2, institutional investors posted a net buy of Bt660.92 million on both the SET and the Market for Alternative Investment (MAI), compared with a net sell of Bt183.07 million in the first half of last month.

Forty per cent of the companies listed on the SET are involved in businesses in which the price of raw materials depends closely on global prices in such sectors as minerals, metals and commodities, and Kongkiat explained that these companies were affected only slightly by domestic economic and political uncertainties.

He encouraged listed companies to exploit more opportunities by expanding their businesses abroad.

"The private sector must stand on its own," he said. "Prospects for after the general election in December may be hopeless, but it's important to make the election happen, in order to restore foreign investors' confidence in our image as a democratic country. Meanwhile, the private sector should be more competitive and be able to survive no matter what happens domestically."

Prior to the SET Composite Index breaking the 700-point barrier yesterday, the Securities Analysts' Association had surveyed 22 securities houses. The poll predicted that the index would range between 700 and 770 at the end of the year.

Kongkiat urged the government to focus urgently on accelerating budget disbursement. Mega-project and the independent-power-producer bidding must begin as soon as possible. Regulations, laws and measures related to investment must be clear, and the Bank of Thailand (BOT) should quickly reduce the interest rate as low as possible. He believes the BOT should cut the rate another 100 basis points.

Phatra Securities Research Group managing director Supavud Saicheua said pushing the private sector to invest is key to driving the economy through its current doldrums.

Supavud said investors might reap short-term profits in the stock market following the positive news that the government had given the green light to pushing private-sector investment and building a strong economic base for grass-roots people through a stimulus package announced yesterday.

But he said domestic political uncertainty and the global

economy were the two major

factors investors should be concerned about for long-term investment.

PTT president Prasert Bunsumpun said the government should resolve political conflicts, in order to restore investment confidence. However, he raised the point that the baht's appreciation against the US dollar did have a bright side.

"The baht has become stronger, that's a known fact. So instead of thinking about the negative effects of the appreciation, investors, the BOT and other parties involved should look for opportunities offered by this strengthening of the baht," he said.

"We can invest abroad more cheaply. The petrol we're using today receives a Bt2-per-litre benefit from the lower cost of imports. The surplus reserve should be used in the country's best interest rather than parked idly."

Siriporn Chanjindamanee,

Piyarat Setthasiriphaiboon

The Nation