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Published on December 21, 2007

Since early November, net foreign selling has come in as high as Bt54.76 billion, of which Bt2.51 billion was recorded yesterday alone.

Analysts said stocks had been affected by the PTT case and expectations ahead of the country's general election, while foreign investors continue to sell Asian stocks due mainly to the US sub-prime factor.  Since November 30, the date when the Supreme Administrative Court agreed to consider the PTT case, PTT has lost Bt140 million in market capitalisation and the overall stock market has lost Bt400 million.

The SET Index yesterday closed down 1.65 per cent at 791.71, with trading value of Bt13.36 billion.

An analyst from Merchant Partner Securities said foreign investors were still unloading energy stocks, particularly PTT, in order to bring their portfolios into line with the fundamental factors of the stock. PTT's revenues will be affected by retroactive leasing fees that it has to pay to the Finance Ministry.

In addition, he said most investors were reducing their investment portfolio as they await the outcome of the election, which will indicate the country's economic and political direction. The investment climate is therefore sluggish.

An analyst from Syrus Securities said the plunge in the SET Index was due to heavy selling from foreign investors, as they are still concerned about the sub-prime mortgage crisis in the United States, though the US central bank has recently cut its key policy rate.

However, he foresees a recovery after the general election.

"I believe once we know who the next government will be, the index will quickly rebound. After that, it will depend on how the government's policies stimulate the economy in both the private and public sectors. It also depends on how stable the government will be," he said.

Paiboon Nalinthrangkurn, managing director of Tisco Securities, believes the stock market will still be volatile in the first half of next year due to several negative factors, both domestic and overseas. He expects the SET next year to be more stable.

Siriporn Chanjindamanee

 The Nation