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Published on December 18, 2007

MCOT shares were at the centre of a selling spree in the Thai stock market yesterday, losing 2.25 per cent on mounting anxiety it would be the next target of a privatisation suit to be taken to court, following PTT.

The stock's price plunged to a level unseen in the past 11 months. MCOT shares started the day with a tumble and headed further south to the day's trough at Bt22.50 before rebounding slightly to close the market at Bt22.70 - a level close to MCOT's initial public offering price of Bt22 per share.

The share price of Airports of Thailand - another state enterprise that sought listing in 2004 - declined at a far lower pace of 0.9 per cent to Bt55. Suspension of PTT share trading will be lifted today.

The selling spree in MCOT and other blue-chip stocks came as investors took a clue from the sharp slump on Wall Street and regional stock markets amid unclear details about the return of PTT's natural-gas pipeline to the government. These factors sent the Stock Exchange of Thailand (SET) Index into a tailspin, closing at the day's low of 817.62 points.

Kasikorn Securities said in a note that the nervous feeling about MCOT would affect the stock in a short-lived way. However, the broker recommends that investors shed piled-up MCOT stock.

Reportedly, National Legislative Assembly member Chirmsak Pinthong asked the government to transfer some assets of MCOT, Channel 9's operator, back to the government, as in the PTT case.

The Supreme Administrative Court last Friday refused to revoke PTT's status as a listed company on the SET as petitioned by the Consumers Foundation but ruled that Thailand's largest oil and gas conglomerate must return natural-gas pipelines to the government.

Asia Plus Securities vice president for research Therdsak Thaveeteeratham said the court's verdict in the PTT case eroded investor confidence and that they sold big-cap stocks to reduce their risks.

"Last Friday, foreign investors sold Thai shares with a net position of Bt2.6 billion, although PTT's stock remains suspended. This signals that they will lower their investment exposure in the Thai stock market. If foreign investors' net sales continue, they will not return to the Thai stock market until early next year," he said.

Despite the gloomy stock-market sentiment, Kim Eng Securities (Thailand) was optimistic the SET Index would reach the 1,000-point mark early next year and 1,200 by the end of 2008. Communications, commerce, retail and domestic consumption-related stocks are expected to be the gainers.

Siriporn Chanjindamanee,

 Oranan Paweewun

 The Nation