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Published on November 22, 2007

The trading value on the Stock Exchange of Thailand yesterday was Bt19.71 billion, with foreign investors making a net sell of Bt3.93 billion and retail and institutional investors recording net buys of Bt2.66 billion and Bt1.27 billion respectively.

Brokers said foreign net selling occurred in all Asian markets due mainly to the US sub-prime lending crisis, with the rising cost of oil an added concern. The SET Index might fall below 800, they said.

The Federal Reserve on Tuesday slashed its outlook for 2008 US economic growth and suggested its members were unsure about future interest rate cuts in a report that left financial markets perplexed.

The central bank, in its first quarterly update under a new policy implemented by Fed chairman Ben Bernanke, projected growth next year in a range of 1.8 to 2.5 per cent, down from 2.5 to 2.75 per cent.

The growth forecast cut came on the same day that US lender Freddie Mac announced that its losses in the third quarter nearly tripled to US$2 billion (Bt68 billion), which follows losses at other American banks.

Freddie Mac, a government-chartered company and the second-largest US lender, said the credit crisis and accompanying housing slump led to a "significant deterioration" that would likely continue until the end of the year.

The company has already written off $4.6 billion over the year due to the unprecedented number of defaults on sub-prime mortgages.

"Without doubt, 2007 has been an extremely difficult year for the country's housing and credit markets and ... we have been impacted by the deterioration in these markets," Freddie Mac chief executive Richard F Syron said in a statement.

The Nation and Agencies